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JobKeeper Explained: How You Can Use JobKeeper to Avoid Redundancies

Published September 04, 2020 (last updated February 18, 2021) -
family business saved by jobkeeper helping them to avoid redundancies

In recent times, Australia’s business landscape has changed. The COVID-19 crisis has forced employers to review every aspect of their business, from safety to staffing. As we adapt to this new operating environment, many small businesses will review their staffing levels against their revenue, cash flow and operating requirements. For many employers, the term redundancy may be a part of this review.

While redundancy may be a legitimate option for employers, it is a complicated process. There are many employers who find the situation extremely difficult to manage as there are not only a variety of different employment relations considerations regarding redundancy, but also an extremely personal concerns that have the potential to significantly impact a business.  In some cases, redundancy can be very expensive. In others not so much. And, if you don’t follow appropriate processes, an employer can potentially be exposed to a variety of claims.

A redundancy occurs when an employee’s job is no longer required to be performed by anyone.

Scenarios where a redundancy may occur include:

  • The business is restructuring
  • New technology fulfils the job obligations
  • The business is relocating or closing down

For employees who are covered by an Award or Enterprise Agreement strict consultation provisions apply. For Award Free employees, it is recommended to follow a similar process of notification and consultation as required under the Fair Work Act 2009.

Redundancy doesn’t have to be your first or only option. In this article, we will discuss how the JobKeeper legislation has provided eligible employers with powers that they can use to avoid making redundancies. However, keep in mind that JobKeeper enabling directions can only be used by eligible employers who satisfy the criteria to use the directions. If you do not satisfy the criteria, the direction cannot be used, and penalties may apply.

The following article discusses the JobKeeper in a general manner. For more advice on the topics raised below, including  how to implement these directions. get in touch with Employsure.

For information on what to pay employees contact your registered tax professional.

Stand Down Enabling Directions

JobKeeper allows employers extra rights to reduce their employees working hours to zero, effectively standing them down. JobKeeper Enabling Stand Down Directions are something employers could consider as an alternative to making redundancies if they satisfy the criteria to issue this direction.

JobKeeper Stand Down Enabling Directions are different to stand down options as provided by the Fair Work Act.

To find out more about this topic, read our article JobKeeper Explained: Stand Downs.

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Request Employees Change Their Days or Times of Work

You may request that employee to perform duties on different days or at different times to usual, provided this is safe and reasonably within the scope of your operations. However, their number of hours remain the same.

For instance, you have a part-time employee who works Monday and Tuesday 6am to 12pm. However, due to COVID-19 you no longer open the store at 6am, but instead open at 10am. Also, due to business slowing down you realise that you only need one staff member to cover Monday and Tuesday shift and have decided to take that burden on yourself to save costs.

Therefore, you can use JobKeeper to come to an agreement with the employee to change their working days to Wednesday and Thursday from 10am to 4pm. If an employer asks their employee to make these changes, the employee has to consider the request and can’t unreasonably refuse it.

Change the Locations of An Employee’s Workplace

JobKeeper Enabling Directions allow employers to also move their employees around workplaces more easily. Employers can direct employees to perform duties at another workplace that is different from their normal workplace. This Direction can include requesting employees to work from home.

Employers have to make sure that:

  • the location is suitable for the employee’s duties
  • the employee is not required to travel an unreasonable distance in all the circumstances
  • it is safe for the employee to perform their duties at the new location
  • the employee performing their duties at the new location is reasonably within the scope of the employer’s business operations.

An employer needs to make sure that the direction is reasonable, taking into account all of the employee’s circumstances, including any caring responsibilities.

Change an Employee’s Duties

Using this Enabling Direction, an employer can direct the employee to perform any duties that are within the employee’s skill and competency. This Enabling Direction allows employers to re-deploy staff to another role or department with ease as long as the duties are safe, the employee has any required licences or qualifications to perform the duties and the duties are reasonably within the scope of the employer’s business operations.

Redundancy: The Last Resort

Redundancy often requires an employer to satisfy a number of obligations and may still incur a heavy financial cost to your business. In order to properly carry out a redundancy, here are some of the steps you must take as an employer:

  • Ensure it is a genuine redundancy
  • Go through a minimum three step consultation process with your affected employees
  • Provide adequate notice of redundancy
  • Make the redundancy payment

Redundancies are one of the trickiest aspects of workplace relations. They can require a lot of patience to execute, and may cost the business a lot of money. If you need assistance with understanding your obligations with regards to redundancies, or would like more information about your options under JobKeeper as an employer, get in touch with Employsure now.

This provision has been repealed and stops applying from 28 September 2020. From this date, any agreement that was made under these provisions stops applying.

From 28 September 2020, employers and employees need to follow the usual rules for taking and requesting annual leave, including those set by an award or agreement.  Therefore I recommend we remove this para completely given the focus of the article is what ER’s can now do to avoid redundancies.

About Employsure

Employsure is one of Australia’s largest workplace relations advisers to small- and medium-businesses, with over 25,000 clients.

We take the complexity out of workplace laws to help small business employers protect their business and their people.

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