The JobKeeper scheme offers employers the ability to keep valuable staff in employment and substantially offset their wage costs. Employers covered by the scheme will be reimbursed $1,500 per fortnight per eligible employee over part or the whole of the 26 week period from 1 March 2020. The catch is that at least this amount must be paid upfront to employees and there is an initial delay in receiving government payments with the first payments being made in May. Whilst the government is encouraging employers to talk to their banks to take up the slack, this may be a bridge too far for many businesses.
Employers with an annual turnover less than $1 billion must show a 30% reduction in turnover in any month from March to September 2020 or the April/September 2020 quarter compared with the same period in 2019. In essence, any permanent or long term casual employee (12 months of regular or systematic employment) will be eligible as well as the self employed. Employers should promptly express interest or register with the ATO for the scheme as there are relevant time limits and required steps for each fortnightly payment.
Employers participating in the JobKeeper scheme can direct employees to:
a. work fewer days or hours or be stood down completely if they cannot be usefully employed because of the business effects of Covid 19;
b. perform any duties within their skill and competency or work at a different place including home, subject to a reasonableness requirement.
By agreement, employees can also work ordinary hours on different days and times and take twice as much annual leave at half pay. These directions and agreements are subject to several conditions including consultation and a broad dispute resolution power for the Fair Work Commission (FWC). Consultation, cooperation and a paper trail for all directions and agreements are key. Further government fine tuning of these arrangements is also possible.
It is not compulsory for employers to participate in the JobKeeper scheme but it may be more difficult to justify standing employees down without pay or reducing their pay. Employers should also check their applicable award for other possible short term flexibility options. Redundancy is still a last option but is not a short term solution and remains subject to normal legal requirements, processes and remedies. An application needs to be made to the FWC to reduce or discharge the obligation to pay redundancy pay on grounds of financial hardship.
WARNING: There is some devil in the detail of the JobKeeper scheme which is beyond the scope of this short bulletin. Reference should be made to the ATO website for further detail of eligibility and conditions or professional advice obtained. Please contact us if you would like any further information or help.