COVID-19: Fair Work Act changes and JobKeeper scheme

In brief 1 min read

Businesses that are eligible for the JobKeeper scheme will have more flexibility under the Fair Work Act to make changes to manage the workplace impacts of the COVID-19 pandemic, such as standing down employees or reducing their hours.

What is the JobKeeper scheme? 

Eligible businesses can access a wage subsidy of $1,500 per fortnight for each eligible employee from 30 March 2020.

Who is eligible for the JobKeeper scheme?

Businesses with an annual turnover which is, or is likely to be, $1 billion or less are eligible if they estimate their GST turnover for a month or quarter represents a reduction in turnover of 30% or more when compared to the equivalent period in 2019.

Businesses with an annual turnover which is, or is likely to be, more than $1 billion are eligible if they estimate their GST turnover for a month or quarter represents a reduction in turnover of 50% or more when compared to the equivalent period in 2019.

Where businesses engage their employees through a special purpose entity, the combined GST turnovers of related entities who utilise the services of these employees will be used to calculate turnover reduction.

Eligible employees are those:

• currently employed (including those stood down or re-hired);
• full-time, part-time or regular and systematic casuals with at least 12 months' service with the employer; and
• not receiving a JobKeeper Payment from another business.

If a business is eligible to participate in the JobKeeper scheme they should nominate all of their eligible employees. That is, a business should not apply for the subsidy in respect of some eligible employees but not others.

What additional flexibilities are available to eligible employers?

Eligible employers under the JobKeeper scheme will be able to:

• stand down an eligible employee who cannot be usefully employed as a result of COVID-19 or government initiatives to slow its transmission;
• unilaterally reduce an eligible employee's hours;
• unilaterally change an eligible employee's duties and work location if it is safe, within the employee's skill and competency, and reasonably within the scope of the business; and
• agree with an eligible employee to change their work days or take annual leave (provided the employee keeps two weeks of annual leave).

These flexibilities supplement existing rights under the Act, awards and enterprise agreements. They will only apply until 27 September 2020.

Limits on eligible employers using these flexibilities

An eligible employer can only use these flexibilities under the JobKeeper scheme if they:

• reasonably believe it is necessary to save the eligible employee's job; and
• give prior notice (generally three days) and consult with employees and their unions.