Both Houses of the Australian Parliament sat late into the night yesterday to debate the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020, resulting in the passage into law of the single most significant economic expenditure measure in Australia’s history.

The Bill paves the way for commencement of the Government’s previously announced JobKeeper wage subsidy scheme, in which over 6 million workers are expected to be paid in excess of $130 billion over a 6 month period.

Underpinning the wage subsidy scheme, the Bill also introduces a number of amendments to the Fair Work Act 2009 (Cth) to enable work arrangements to be altered during the period of operation of these emergency measures.

JobKeeper payment

The essence of the scheme is that an employer who qualifies will be entitled to receive a JobKeeper payment ($1,500 per fortnight, before tax) in respect of each eligible employee.

Notably, while full time and part time employees are covered, the Government resisted pressure from the Opposition party and the ACTU to extend the scheme to also apply to all casual workers, with the effect that only those who meet the existing definition of a ‘long term casual’ under the Fair Work Act 2009 (Cth) can be covered. Specifically, that definition requires that in order to be a ‘long term casual’, an employee must have been employed on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months.

What is yet to be fully defined is the concept of what it means for an employer to ‘qualify for the JobKeeper scheme’. So far the amendments brought about by the Bill introduce new provisions into the Fair Work Act which will operate in relation to each employer who qualifies for the JobKeeper scheme. However, the definition of what that means is so far simply expressed as having ‘the same meaning as in rules made under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020’. This is earlier emergency legislation passed in response to the COVID-19 pandemic. Notably, the Treasurer has power to issue such rules under that earlier emergency legislation.

This effectively means that while we know from Treasury documents released last week that the scheme is it intended to apply to national system employers who have suffered a 30% downturn in revenue compared to the same time last year (or 50% where their annual turnover is in excess of $1 billion), the Bill does not itself provide any further information as to how those thresholds will be applied, or what it might otherwise mean for an employer to ‘qualify’ for the JobKeeper scheme. It is expected that a set of rules dealing with these issues will be released by Treasury in the coming days.

JobKeeper payments to qualifying employers who have registered for the scheme are due to commence from 1 May 2020, with back pay applied to 30 March 2020.

Fair Work Act amendments

In order to facilitate the introduction of the JobKeeper wage subsidy scheme, the Bill also brings about a number of amendments to the Fair Work Act itself, which apply to an employer and the employee(s) who become covered by the scheme, and while JobKeeper payments are received.

These amendments give rise to rights and obligations which override any terms to the contrary in an employee’s contract of employment or an applicable modern award, enterprise agreement or other industrial instrument. They include:

1. Availability of specific stand down directions

The Bill authorises an employer to issue a ‘JobKeeper enabling stand down direction’ to any eligible employee who cannot be usefully employed for their normal days or hours of work due to changes in the business attributable to the COVID-19 pandemic or government initiatives to slow the transmission of the virus.

The direction might include a requirement that the employee:

• Not work on a day (or days) on which he or she usually would,
• Work for a lesser period that the employee ordinarily would, or
• Work a reduced number of hours (which may be reduced to nil).

However, the ‘JobKeeper enabling stand down direction’ is only authorised for a period in which the employer receives a JobKeeper payment from the government in respect of the particular employee. In addition, the process of implementing the direction must be safe, having regard to the nature and spread of COVID-19.

2. Variation of duties and location of work

While entitled to receive the JobKeeper payment, a qualifying employer also has the ability to direct an eligible employee to perform any duties that are within the employee’s skill and competency, provided:

• Those duties are safe, including in light of COVID-19,
• The duties are reasonably within the scope of the employer’s business operations, and
• The employee has any necessary licence or qualification required to carry out those duties.

Similarly, an employer may direct an employee to perform duties at a location other than the employee’s normal place of work, including the employee’s home, as long as:

• The place is suitable for such work to be undertaken,
• If not the employee’s home, the specified location does not require the employee to undertake unreasonable travel, and
• It is safe, and reasonably within the scope of the employer’s business, for the work to be performed at that location.

3. Variation of days of work, by agreement

A qualifying employer may also request that an eligible employee agree to perform work on different days or at different times compared to the employee’s ordinary hours of work, provided it is safe to do so and the work remains within the scope of the employer’s business operations.

If such a request is made, the employee is under an obligation to consider it and must not unreasonably refuse.

4. Taking paid annual leave

An employer covered by the scheme also has the option to request an eligible employee take a period of paid annual leave, provided the worker would retain a balance of at least two weeks’ accrued annual leave after doing so. Again, the employee must consider any such request and must not unreasonably refuse.

In addition, an employer and employee may agree, in writing, to the employee taking twice as much paid annual leave at half the employee’s usual rate of pay.

However, importantly, even where an employer has a right to direct an employee to do such things, as a result of amendments to the Fair Work Act brought about by the Bill, this must be exercised reasonably otherwise the direction will be of no effect. Similarly, the direction will not apply unless the employer first consults with the affected employee and provides written notice at least three days before it takes effect (unless the employee genuinely agrees to a lesser period), although there may be circumstances in which an earlier period of consultation can be taken to have satisfied this requirement.

Further, a direction requiring an employee to change their duties or location of work will have no effect unless the employer reasonably believes (based on available information) this is necessary for the continuation of employment of one or more employees.

The Bill also contains provisions dealing with recognising continuous service for eligible employees, the rate of accrual of leave entitlements and the calculation of notice of termination and redundancy pay, each of which are essentially unaffected by a change to the employee’s working arrangements under the new JobKeeper laws.

Finally, the Bill brings about amendments to the Fair Work Act enabling the Fair Work Commission to deal with disputes about the operation of these new laws, including by arbitration if necessary, and extends the operation of existing general protections provisions to prohibit adverse action being taken against an employee because of a workplace right connected with the JobKeeper scheme.

Each of these measures will cease to have effect on 28 September 2020 (unless this date is extended by further legislative amendment).

The above content is commentary rather than legal advice and was prepared on the basis of applicable legislation, government programs and initiatives that were in place as of the date of publication. Given the ongoing evolution of both the COVID-19 pandemic and frequent consequential changes to the various laws and programs within all Australian states and territories, readers should seek legal advice on the current situation as applicable to their specific circumstances before taking any action in relation to the above.