In response to COVID-19, yesterday the Australian Government has introduced legislation to temporarily amends the Fair Work Act 2009 (Act) to assist employers and employees to work through the economic impact of COVID-19.  

The Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020: Amendments to the Fair Work Act 2009 introduces temporary and critical changes to the Act to enable the $1500 per fortnight JobKeeper payment to flow to eligible employers and employees, and achieve a number of other ‘job-saving’ flexibilities during this extraordinary time.

One key objective of the amendments is to help ensure employees remain productively employed and continue to contribute to the business of their employer where it is safe and possible for the business to continue operating.

As part of the amendments qualifying employers are permitted to make ‘JobKeeper enabling’ directions to stand down employees or make temporary alterations to usual duties, days and location of work. The Fair Work Commission will have the authority to review and resolve any disputes about JobKeeper enabling directions made by an employer.

What does this mean for businesses?

The amendments to the Act will mean that for the next six months, employers that qualify for the JobKeeper scheme can:

  • give a ‘JobKeeper enabling stand down direction’ to an employee, including reducing their agreed/contracted days or hours of work;
  • give a direction to an employee about the duties to be performed by the employee or the location of work;
  • request an employee to vary their agreed/contracted days or hours of work, and in turn, the employee must consider the request and not unreasonably refuse it;
  • request an employee to take annual leave (so long as the employee maintains a balance of at least two weeks) and in turn, the employee must consider the request and not unreasonably refuse it; and
  • authorise and employer and employee to make an agreement in relation to the employee taking annual leave at half pay.

Consultation obligations and requirement of reasonableness

The amendments also provide that:

  • an employer must consult an employee (or a representative of the employee) before giving a direction to vary agreed days/hours/duties/location of work;
  • a written record of the consultation must be kept by the employer; and
  • written notice of at least three days must be given for a direction to apply (unless the employee has agreed to a lesser notice period).

A JobKeeper enabling direction will not apply if it is unreasonable in the circumstances. Further, a direction is given in relation to the duties to be performed by the employer, or the location of the employee’s work, will not apply to the employee unless the employer reasonably believes the direction is necessary to continue the employment of one or more employees of the employer.

The Bill does not force a consultation requirement before a request to the agreed days/hours/duties/location of work or take annual leave. Having said that, employers are advised to confirm the request in writing and provide an employee with a reasonable opportunity to consider the request.

The amendments also provide for other safeguards relating to directions and the JobKeeper scheme, including but not limited to, minimum payment guarantees for the amount of JobKeeper and minimum amounts payable in relation to the performance of work, the hourly rate of pay guarantees, rules around the accrual of leave entitlements and protection of workplace rights.

enableHR has prepared a Fact Sheet and FAQ which details the amendments to the Fair Work Act and what this means for employers and employees eligible for the JobKeeper scheme.

Role of the Fair Work Commission

The Fair Work Commission (FWC) will have the power to deal with disputes about the operation of Part 6-4C (Coronavirus Economic Response), including by conciliation and arbitration.

The FWC may make an order that it considers desirable to give effect to a JobKeeper enabling direction, an order setting aside a JobKeeper enabling direction, substitute a different JobKeeper enabling direction, or any other order the FWC considers appropriate in the circumstances.

We also anticipate that Parliament will shortly make new laws to give effect to the JobKeeper wage subsidy scheme. Stay alert for an update from us on this important economic initiative.