08 Oct LEGACY EMPLOYERS AND THE JOBKEEPER PROVISIONS
As most of you would be aware, the JobKeeper provisions of the Fair Work Act 2009 (Cth) (“FW Act”) were extended (with some changes) until 28 March 2021.
We have previously published a number of articles regarding the main changes to the provisions which you can access on our website if you are interested in reading further about this.
One of the other changes which many employers are not as aware of and which has been less publicised, is of the changes which effect legacy employers, i.e. who no longer receive JobKeeper payments but may still be able to use some of the JobKeeper provisions.
We have set out below a summary regarding legacy employers, what they can do and how they can meet the relevant turnover test.
We encourage you to seek specific advice about your business’ circumstances from HR Law if this is a topic which is relevant to your business.
Who is a “legacy” employer?
From 28 September 2020, certain employers can use some of the JobKeeper provisions of the FW Act (with some changes) for previously eligible employees if they:
1. previously participated in the JobKeeper scheme, but no longer qualify (or choose not to participate) from 28 September 2020;
2. can demonstrate at least a 10% decline in turnover for a relevant quarter and get a certificate from an eligible financial service provider or make a statutory declaration if they are a small business employer.
What can a legacy employer do?
Legacy employers can do the following under the extended JobKeeper provisions:
1. issue JobKeeper enabling stand down directions (with some changes) – for example, a direction for employees to work less hours, for instance not to work on one (1) or more days than they usually work;
2. issue JobKeeper enabling directions in relation to employees’ duties and locations of work; and
3. make agreements with employees to work on different days or at different times including less hours than they would usually work (with some changes).
It is important to remember that legacy employers need to comply with notice (which is now seven (7) days (previously three (3) days)) and consultation requirements and other protections under the extended JobKeeper provisions.
What about existing JobKeeper enabling directions and agreements?
JobKeeper enabling directions and agreements that legacy employers already had in place under the initial scheme ended on 27 September 2020.
This means that if a legacy employer wants to use JobKeeper enabling directions or agreements after 27 September 2020, they need to reissue or make new directions and agreements with their employees.
These new directions or agreements need to start on or after 28 September 2020 (but notice and consultation can have started before 28 September 2020).
How do legacy employers meet the turnover test?
As stated above, a legacy employer needs to demonstrate at least a 10% decline in actual GST turnover for the quarter in 2020, when compared to the same quarter in 2019 to meet the turnover test.
Accordingly, if a legacy employer wishes to issue or make a JobKeeper direction or agreement for a period when the extended JobKeeper provisions apply, they need to hold a certificate (or statutory declaration) for the quarter corresponding to that period. If they do not get a certificate or make a statutory declaration, then they cannot issue or make any JobKeeper directions or agreements that apply to that corresponding period.
For example, if the period for the JobKeeper direction or agreement is 28 September to 27 October 2020 (inclusive), the quarter to meet the 10% decline in turnover test would be June 2020 and the comparison quarter would be June 2019.
Keep in mind that any JobKeeper enabling directions or agreements that are already in place under the extended JobKeeper provisions will automatically end on:
1. 28 October 2020, if the above conditions are not met for the September 2020 quarter; and
2. 28 February 2021, if the above conditions are not met for the December 2020 quarter.
It is important that legacy employers keep records of their certificates or statutory declarations as evidence of their decline in turnover.
As the rules in this area are constantly changing and being updated and the rules are very circumstance dependent, we strongly encourage you to seek advice if you believe that you may want to utilise the JobKeeper provisions as a legacy employer. If you do not comply with your obligations under the provisions then you can risk an employee filing a dispute against you, so it is important to make sure you act in compliance.