On 26 August, the Federal Government introduced new legislation giving effect to the extension of the JobKeeper payments and temporary workplace flexibilities until 28 March 2021.
The Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 provides employers with ongoing access to some of the temporary provisions in the Fair Work Act (FW Act) if they can show their turnover has declined by 10 percent or more in the September quarter compared to last year.
The changes are designed to support businesses that may have seen some recovery in revenues which would have made them ineligible for the extended JobKeeper scheme. While businesses that meet the secondary turnover test will not receive the JobKeeper payments, they can still make some of the JobKeeper-enabling directions under the FW Act provisions.
The new Bill allows employers to make JobKeeper-enabling directions as long as they do not reduce an employee’s hours of work below 60 percent of their ordinary hours of work as at 1 March 2020 and cannot require an employee to work less than two hours on a day they work.
Under the extended scheme, employers are required to provide seven days’ notice in writing before issuing a JobKeeper-enabling direction.
To qualify for JobKeeper payments under the extension, a business with an annual turnover of less than $1 billion must demonstrate a turnover reduction of more than 30 percent in the September quarter compared to same period in 2019.
Where a business has demonstrated a sufficient recovery for the relevant period, they will not qualify for JobKeeper payments and cannot access the temporary measures in the FW Act.
The operation of the provisions in the FW Act will be reviewed separately by the Attorney-General and Minister for Industrial Relations.
Labor amendments fail in the Senate
Yesterday (31 August) Labor gave notice in the Senate of an amendment to remove access to the temporary FW Act flexibilities for employers who do not qualify for the JobKeeper program.
Labor called on the Morrison Government to remove “extreme elements” of the Bill such as the extension of “emergency IR powers” to employers who no longer qualify.
Labor Senator Don Farrell says members of the Opposition are concerned that “employees can face cuts to hours of up to 40 percent if their employer still has a revenue drop of 10 percent.”
Labor gave notice of another amendment that would ensure employers pay employees the amount of the applicable JobKeeper payments if they are stood down under a JobKeeper-enabling direction. Both amendments failed to secure support from the crossbench.
The Greens also proposed an amendment giving the FWC broader powers to hear disputes about JobKeeper eligibility which is currently the responsibility of the ATO. The vote was tied and therefore negatived with Senators Patrick, Griff and Lambie voting in support of the Greens.
The Bill is expected to pass the Senate by the end of the week as the last sitting period before the original JobKeeper scheme expires at the end of September.
Summary of the JobKeeper extension
Payments
There will be a two-tier payment system under the extended JobKeeper program based on “hours worked” to accurately prescribe the level of support needed for casual and part-time workers.
From 28 September 2020, the new JobKeeper rate will be $1200 per employee, per fortnight, provided that employee works 20 hours or greater in that fortnight.
The reduced rate for employees who work less than 20 hours will be $750 per employee, per fortnight.
The rates will be further reduced from 4 January 2021 down to $1000 per employee, per fortnight and $650 for those who work less than 20 hours.
Eligibility
Businesses with pre-COVID annual revenues of up to $1 billion must have reported a 30 percent loss in turnover and businesses with annual revenues of more than $1 billion must have reported a 50 percent loss in turnover.
Businesses only need to show that they suffered a decline in turnover for the September quarter to be eligible for the first extension of the scheme (from 28 September 2020 to 2 January 2021).
This change also applies to the second extension which begins on 3 January 2021. Businesses only need to have experienced a decline in turnover for the December quarter to qualify for the January extension of JobKeeper (from 3 January 2021 to 28 March 2021).
The extended JobKeeper program expands the employee eligibility criteria to include workers who may not have been eligible under the initial JobKeeper scheme. From 3 August the relevant date of employment for assessing employees’ eligibility for JobKeeper is 1 July 2020.
The change also includes casuals who were ineligible on 1 March 2020 but have since been engaged for a 12-month period as of 1 July 2020.
Employers had until Friday 21 August to provide ‘newly eligible’ employees with a nomination notice form and make necessary ‘top up’ payments by 31 August 2020 to avoid penalties.
More information about the extended JobKeeper scheme can be found on the ATO website.
Contact AREEA’s workplace consulting team for advice and support on JobKeeper.
