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JobKeeper Payment FAQs

Published April 30, 2020 (last updated July 27, 2020) Author: Employsure

JobKeeper Payment FAQs

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Here are Frequently Asked Questions on the JobKeeper Payment.

Download our JobKeeper FAQ here.

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The below information applies to employers and employees covered by the Fair Work Act 2009 only.  

JobKeeper FAQs

Need help navigating the JobKeeper system? Unsure about eligibility or payment rules?

JobKeeper Resources For Employers

Memo to your employees confirming you will not be participating in the JobKeeper scheme. Download here.

Memo to your employees with the ATO’s JobKeeper Employee Nomination Notice form attached, explaining the employee must complete and return the form within the specified timeframe. Download here.

Memo to those employees who are not eligible for JobKeeper payments. Download here.

Memo to your employees confirming that the ATO has notified you that the business does not qualify for the scheme. Download here.

Memo to your employees confirming that JobKeeper payments will be made. Download here

Memo to your employees confirming that JobKeeper payments will not be made. Download here.

Memo to your employees within 7 days of applying online, confirming their details have been submitted to ATO (this is a legal requirement). Download here.

Before making any JobKeeper payments in April, you should consider what is best for your business based on your circumstances and determine the best approach. Download here.

JobKeeper Next Steps

Make sure you are on top of the process for implementing JobKeeper in your business, download our guide to JobKeeper next steps.

The following JobKeeper Payment FAQs includes:

  • JobKeeper and Eligibility
  • Communication with Employees
  • JobKeeper Payment and Superannuation
  • JobKeeper and Stand Down
  • JobKeeper and Termination
  • JobKeeper Leave, Entitlements and Service
  • JobKeeper Redundancy
  • Amendments to Fair Work Act – JobKeeper Enabling Directions

Jobkeeper Payment FAQs

  • What is the JobKeeper program?

    The Federal Government has introduced a subsidy that assists employers impacted by COVID-19 to continue to pay eligible employees. Employers who qualify for the scheme can claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.

  • When does it start?

    The subsidy applied from 30 March 2020. The first payment will be received by registered employers from the ATO in the first week of May 2020.

  • How can an employer apply for the payments?

    To apply, follow the steps in our Next Steps document here.

    For more information on the application process, see the ATO website at https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Enrol-and-apply-for-the-JobKeeper-payment/.

  • Do employers have to apply for JobKeeper payments?

    No, there is no legal requirement or repercussions for not participating in the JobKeeper scheme. This is an individual decision for each business owner.  However, if you choose not to participate in the scheme, you will not be able to access the subsidy.

    If the decision is made not to access the JobKeeper payment, you can direct your employees (or ex-employees) to speak with Services Australia about any financial support that may be available to them.

  • Do employers have to apply for all eligible employees?

    Yes, the Treasurer has confirmed that if you elect to participate in the JobKeeper Scheme, you must notify all eligible employees that you are participating and give them the opportunity to agree to be nominated for the JobKeeper payment. This means that you cannot nominate some eligible employees to receive the payment, and not others. In practice, this will likely be difficult for the ATO to regulate.

  • How and when will the JobKeeper payment be made?

    To be paid the JobKeeper payment, the ATO must be satisfied that you meet certain conditions, including:

    • You qualify for the scheme (see Eligibility section below)
    • The employee is an eligible employee (see Eligibility section below)
    • You have paid each eligible employee $1,500 or more (inclusive of salary, wages, commission, bonus, allowances, amounts withheld for tax and salary sacrificed superannuation payments) for each fortnight in which you participate in the scheme
    • You have notified the ATO that you elect to participate in the scheme and
    • You have provided the ATO information about employee entitlement for each fortnight in which you intend to participate in the scheme.

    The ATO will make the JobKeeper paymet to you monthly in arrears beginning in May 2020 into the bank account you have nominated for your business’s most recent income tax return.

    Exception for first two fortnightly periods

    The first fortnightly period covered by the scheme is from 30 March 2020 to 12 April 2020. The second fortnightly period is from 13 April 2020 to 26 April 2020. For these two fortnightly periods only, the ATO has indicated that they will accept the minimum $1,500 payment for each fortnight has been paid even if it is paid late, provided it is paid by 8 May 2020.

  • What should I consider before enrolling for the JobKeeper scheme?

    Before enrolling for the JobKeeper scheme, you should consider what is best for your business based on your circumstances. Keep in mind that if you decide to enrol in the JobKeeper scheme, you will need to nominate all eligible employees in your business and ensure each is paid at least $1,500 per fortnight for the duration of the scheme. The below may assist you to determine the best approach for your business.

    Situation Recommendation Risk
    Your employees are completely stood down, or on unpaid leave
    • Be careful to ensure you are eligible to participate before enrolling in the JobKeeper scheme.
    • You risk losing $1,500 per fortnight per employee if the ATO later determines you are not eligible for JobKeeper, as well as any fines/penalties that may be imposed.
    Your employees are earning less than $1,500 per fortnight
    • If most employees earn significantly below $1,500 per fortnight, be careful to ensure you are eligible to participate before enrolling in the JobKeeper scheme.
    • If most employees earn close to $1,500 per fortnight, make a commercial decision on whether it is worth enrolling in the JobKeeper scheme, even if you are not certain if you are eligible.
    • You risk losing any ‘top up’ payments made to employees if the ATO later determines you are not eligible for JobKeeper.
    • The amount you risk losing will be equal to the overall value of the ‘top up’ payments, as well as any fines/penalties that may be imposed.
    • On the other hand, if you do not enrol for the JobKeeper scheme but are eligible, your wages costs will not be subsidised by the JobKeeper payment.
    • This means you could lose up to $1,500 per eligible employee per JobKeeper fortnight.
    Your employees are entitled to be paid $1,500 or more per fortnight for the hours of work they are performing (including any leave taken)
    • Continue to pay employees the wages they are entitled to.
    • Enrol for the JobKeeper scheme if you satisfy the eligibility criteria.
    • For employees who are entitled to be paid $1,500 or more per fortnight for the hours of work they are performing, you need to pay these wages regardless of whether you are eligible for JobKeeper.
    • You will not be out of pocket if the ATO later determines you are not eligible for JobKeeper, except for any fines/penalties that may be imposed.
  • Do I have to backpay employees from 30 March 2020?

    To receive reimbursement for the first two fortnightly periods (ie from 30 March 2020 to 26 April 2020), you must ensure you have paid each eligible employee the minimum of $1,500 per fortnight. If this means you need to back pay staff to ‘top up’ to the JobKeeper amount, you will need to do this by 8 May 2020 to be able to receive the JobKeeper payments for those periods.

  • Do I qualify for JobKeeper?

    The JobKeeper rules set out the criteria for determining which employers qualify for the JobKeeper scheme. Whilst we can confirm what the eligibility criteria is, we cannot give you specific advice on whether you meet the criteria as this is ultimately a decision for the ATO.

    We suggest you seek advice from your accountant on whether you meet the turnover test as detailed below.

  • Which employers are eligible for JobKeeper payments?

    Employers (including not-for-profits) will qualify for the JobKeeper payment if:

    • On 1 March 2020, the employer carried on a business in Australia or was a not-for-profit body that pursued objectives principally in Australia and
    • On 1 March 2020, the employer engaged at least one eligible employee (see employee eligibility criteria below) and
    • The employer has satisfied the decline in turnover test, being
      • (for businesses with an aggregated turnover of less than $1 billion) the business estimates their GST turnover has fallen or will likely fall by 30 per cent or more relative to a comparable period a year ago (of at least a month), or
      • (for businesses with an aggregated turnover of $1 billion or more) the business estimates their GST turnover has fallen or will likely fall by 50 per cent or more relative to a comparable period a year ago (of at least a month), or
      • (for charities registered with the Australian Charities and Not-For-Profit Commission) the business estimates their GST turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period and
    • the business does not fall into the list of ineligible employers, outlined here.

    Self-employed individuals also qualify if they meet the criteria above.

  • Do I need to re-qualify as a business every month to receive JobKeeper payments?

    • No. Once you qualify, you do not need to continue to qualify for the remainder of the JobKeeper scheme. As a business, you are required to report to the ATO on a monthly basis your current and projected GST turnover. However, this is not for the purposes of re-testing your eligibility, but to provide the ATO with statistics on how the business is progressing under the JobKeeper scheme.

  • What if the turnover test is not suitable for my business?

    For businesses where the basic turnover test outlined above is not appropriate, there may be scope for an alternative test to be applied to determine eligibility to participate in the JobKeeper scheme.

    Typically, an alternative test can be applied where the business:

    • commenced operating after the relevant comparison period
    • acquired or disposed of part of the business after the relevant comparison period
    • undertook a restructure after the relevant comparison period
    • had turnover substantially increase in the 12, 6 or 3 months immediately before the applicable turnover test period, by percentages of 50%, 25% or 12.5% respectively
    • was affected by drought or natural disaster in the during the relevant comparison period
    • has large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period (unless this is a cyclical or regular seasonal variance)
    • is a sole trader or small partnership where sickness, injury or leave have impacted the ability of an individual to work, which has affected turnover

    For each of the above, the ATO has outlined a specific test that should be applied to determine eligibility for JobKeeper. For more information, click here.

  • Who are eligible employees?

    Eligible employees are employees who:

    • are current employees of a qualifying employer, including employees who have been stood down or re-hired
    • were employed at 1 March 2020
    • as at 1 March 2020, were either:
      • employed on a full time or part time basis, or
      • employed on a regular and systematic casual basis for at least 12 months prior to 1 March 2020, and not a permanent employee of any other employer
    • were at least 16 years of age at 1 March 2020, unless they are a full time student who is not financially independent in which case they must have been at least 18 years of age at 1 March 2020
    • have completed the ATO’s JobKeeper Employee Nomination Notice form, agreeing to receive JobKeeper payments from you and confirming they are not receiving a JobKeeper payment from another employer
    • were a resident for Australian tax purposes on 1 March 2020, and
    • are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.

    In addition to the above requirements, there are fortnightly eligibility criteria that an employee must meet. These require that the employee must not have received any of the following during the fortnight:

    • Government funded Parental Leave Pay or Dad and Partner Pay, or
    • a payment under workers compensation law in respect to total incapacity that lasted the full duration of the fortnight.
  • I hired an employee after 1 March 2020. Can I receive the JobKeeper payment for them?

    • No. The employee must have been engaged at 1 March 2020.

  • Am I entitled to JobKeeper for an employee who has a second job?

    An eligible employee is only entitled to receive the JobKeeper payment from one employer.

    Prior to nominating an employee for the JobKeeper scheme, you should issue them with the JobKeeper Employee Nomination Notice form. In this form, an employee must agree to be nominated by your business for the JobKeeper payment.

    If the employee does not complete this form or does not agree to be nominated by your business, you should not nominate them for the JobKeeper payment.

  • I purchased a business just under 12 months ago and retained some casual employees who worked for the previous owner. Are these casual employees eligible?

    • The JobKeeper Rules confirm that when determining if an individual is a long-term casual employee for the purposes of being eligible for JobKeeper payments, employment in a business or non-profit body can be counted even if the business or non-profit body changed hands during the 12 month period. Therefore, service with any previous owners should be considered for the purposes of JobKeeper eligibility.

  • I am a company director that recieves director fees. Am I an eligible employee?

    A director receiving a salary or wage who satisfies the other eligibility criteria will be eligible to receive JobKeeper payments. A qualifying business operated through a company that pays director fees to non-executive directors may nominate only one such individual to receive JobKeeper payments. Also, one partner of a partnership, one beneficiary of a trust, and one shareholder of a company can be nominated to receive a JobKeeper payment.

  • Do I have to tell my employees that we are participating in the JobKeeper scheme?

    Yes.

    Before you enrol for the JobKeeper scheme, you must inform your eligible employees that you intend to participate in the scheme. Do this by providing the eligible employee with the ATO’s “JobKeeper Employee Nomination Notice” form. This form can be downloaded here. We recommend you issue the employee with a letter as well, which you can access here.

    Each fortnight, once you have submitted information to the ATO about the employee’s entitlement for the JobKeeper payment in that fortnight, you must notify the employee in writing within 7 days that you have done so. You can use the template here to do this.

    You are not required to notify employees who are not eligible, but can do so if you wish by way of memo, which you can access here.

  • Do my employees need to agree to receiving the JobKeeper payment? What if they don’t agree?

    Yes, eligible employees must agree to receive the JobKeeper payment prior to you nominating them for the JobKeeper scheme. Their agreement will typically be recorded in a completed ATO form called the “JobKeeper Employee Nomination Notice”. In this form, eligible employees are also asked to confirm they meet the eligibility requirements for JobKeeper payments. This form can be downloaded here. We recommend you issue the employee with a letter as well, which you can access here.

    The completed form does not need to be provided to the ATO, but must be kept by you as an employee record that confirms they have agreed to be nominated.

    If an employee does not agree to participate, you cannot nominate them as an eligible employee.

  • How do I tell my employees that we are not participating in the JobKeeper scheme? Do I need to tell ex-employees who were employed by me as at 1 March 2020?

    It is a business decision whether or not you participate in the scheme. It is not mandatory.

    If you choose not to participate, we recommend that you notify your current employees by way of memo, which you can access here.

    You are under no obligation to inform ex-employees that you will not be participating in the scheme.

  • My employees are not happy that we are not participating in the scheme and are alleging they are being bullied. What can I do?

    You are under no legal obligation to participate in the scheme. Follow your normal grievance procedures if you receive any complaints from employees.

  • What if an eligible employee earns LESS than $1,500 per fortnight?

    If you receive a JobKeeper payment for an eligible employee, you must pay that employee a minimum of $1,500 per fortnight, before tax. This means that if an employee typically earns less than $1,500 per fortnight, you must still pay the employee $1,500 per fortnight, before tax. See below some examples, to illustrate how this works in practice.

    Employee still working

    If an employee performs work to a value of $1,000 per fortnight, you need to pay their normal wage of $1,000 and the relevant superannuation on that amount, plus an additional ‘top up’ amount of $500 as a result of the JobKeeper payment. You are not legally required to pay superannuation on the ‘top up’ amount of $500, but can choose to pay this if you wish.

    Employee not working

    If an employee has been stood down and is not performing any work, but usually earns $1,000 per fortnight, you need to pay them $1,500 as a result of the JobKeeper payment. You are not legally required to pay superannuation on the $1,500, but can choose to pay this if you wish.

  • What if an eligible employee earns MORE than $1,500 per fortnight?

    For an employee who usually earns more than $1,500 per fortnight, the amount you need to pay will depend on whether the employee works their usual hours. See below some examples, to illustrate how this works in practice.

    Employee still working

    If an employee is still performing work for which they are entitled to be paid in excess of $1,500 per fortnight, you must ensure they are paid the full amount they are entitled to. For example, if the employee is entitled to earn $2,000 per fortnight for the hours of work performed, you must continue to pay the employee wages of $2,000 and applicable superannuation (even though you will only receive $1500 as a JobKeeper payment).

    Employee not working

    If an employee has been stood down and is not performing any work, but usually earns $2,000 per fortnight, you only need to pay them $1,500 per fortnight as a result of the JobKeeper payment. You are not legally required to pay them an additional $500 to top their pay up to its usual level, nor are you legally required to pay superannuation on top of this, but you may choose to pay either or both of these amounts if you wish.

  • Can I pay my employee less than the minimum wage?

    No. You cannot pay an employee less than the minimum wage outlined in the applicable industrial instrument (e.g. award, agreement or employment contract).

  • Do we have to pay the full $1,500 per fortnight to employees, or can we just pay what we can afford?

    If you receive the JobKeeper payment for an employee, you must ensure that employee receives a minimum of $1,500 per fortnight, before tax. If you cannot afford to make the payments, we advise against applying for the JobKeeper payment.

    If you have already commenced making JobKeeper payments, but cannot afford to continue with these, we recommend you discuss this with your accountant to identify what options you may have.

    If you fail to pay the eligible employee the full $1,500 JobKeeper payment in each fortnight you claim this, you will be in breach of the Fair Work Act and may face penalties of up to $12,600 as an individual and $126,000 as a corporation, for each contravention. This is in addition to any penalties that may be applied under the Commonwealth Criminal Code.

  • Do I have to pay superannuation on the JobKeeper payment?

    For any hours worked by employees, you must continue to pay superannuation in accordance with the applicable Superannuation legislation and rules. If an employee is not working but you pay them the JobKeeper payment, you do not need to pay superannuation on this. If an employee is working, but you pay them a ‘top up’ JobKeeper amount, you do not need to pay superannuation on the JobKeeper component.

    Prior to making any superannuation contributions, you should check your obligations with your accountant.

  • I engage an independent contractor. Will I receive JobKeeper for them?

    No. The eligibility criteria confirm that the employee must be full time, part time or a long-term casual employee. If you engage an independent contractor, they may be able to claim JobKeeper themselves as a sole trader.

  • What if an eligible employee has been stood down? Will they receive the $1,500 payment?

    If you participate in JobKeeper, you will be paid the JobKeeper payment of $1,500 per fortnight for each eligible employee in your business. This includes any employees who have been stood down, as long as they meet the eligibility criteria. Eligible employees who remain on stand down are entitled to the full $1,500 JobKeeper payment per fortnight that they are eligible.

  • What if an eligible employee has been stood down and their normal wages are in excess of $1500 per fortnight?

    If you receive the JobKeeper payment for an employee, you must ensure that employee receives a minimum of $1,500 per fortnight, before tax. It is your choice as to whether you top up their pay out of your own pocket to what they would typically earn.

  • What if an eligible employee has been stood down and their normal wages are less than $1,500 per fortnight?

    If you receive the JobKeeper payment for an employee, you must ensure that employee receives a minimum of $1,500 per fortnight, before tax. This means that even if an employee typically earns less than $1,500 per fortnight, you must still pay the employee the full $1,500 JobKeeper payment.

  • I have stood down my employees and they have sought employment elsewhere for the stand down period. Do I receive JobKeeper payments for them?

    If you have enrolled for the JobKeeper payment and the employee is eligible, yes, as long as the employee has confirmed in the JobKeeper Employee Nomination Notice that they are only receiving JobKeeper from you and not the other employer as well.

  • To avoid stand down, my employees have mutually agreed to take annual leave and leave without pay. Do I still get JobKeeper for those employees? Can I direct them to come back to work?

    Yes, employees who have mutually agreed with you to take annual leave or leave without pay will be eligible for JobKeeper, as long as they meet the other eligibility criteria.

    Being able to direct employees to come back to work will depend on the agreement you have with them. For example, if you agreed that they took leave until you notified them to return, then you can direct them to return. If they refuse to return to work, this will become a disciplinary issue so please contact our Advice Team for further advice.

    However, if you agreed with the employee that they would take the leave until a certain date and that date has not expired, you would need to negotiate with them if you would like them to come back sooner. You would not be able to discipline the employee for failing to follow your direction to return earlier.

  • I terminated the employment of an employee after 1 March 2020. If I re-hire them, can I claim the JobKeeper payment for them?

    Yes. If you re-hire an employee who was employed at 1 March 2020, you can receive the JobKeeper payment for them, provided the employee meets the eligibility criteria.

    You cannot receive the JobKeeper payment for an employee who was terminated by you pre-1 March 2020 and then re-engaged post 1 March 2020. The employee must have been in your employment as at 1 March 2020.

  • What if an employee has been terminated and they ask if they can be re-hired to receive JobKeeper, but I don’t want to?

    You are not under any legal obligation to re-hire employees. You can explain to the ex-employee that unfortunately you are not in a position to re-hire them. The employee may wish to contact Services Australia about any financial support that may be available to them.

  • If an employee was terminated after 1 March 2020, and I re-hire them, do we need to issue a new employment contract?

    • We recommend issuing a new Employsure contract. As the employee’s previous employment has ended, this is a new offer and acceptance and all terms and conditions of the new offer should be included.

  • Do any terms in the old contract still stand if a whole new employment contract is issued?

    • No, the employee has accepted the terms and conditions set out in the new contract which supersedes any previous contractual terms. However, depending on your industrial instrument and the state or territory in which you are based, the prior period of employment may count towards an employee’s continuous service for some purposes (for example, for long service leave).

  • What happens if my employee who is receiving JobKeeper resigns?

    You should accept the resignation in writing and pay the employee any outstanding wages and accrued entitlements as normal. In addition, you must notify the ATO of the resignation.

  • My business has suffered a significant downturn. I can only afford to keep employees who are receiving the JobKeeper payments. Can I terminate the employment of the employees that are not receiving the JobKeeper payments, for example, visa workers that don’t meet the criteria?

    You must proceed with caution on this to avoid potential discrimination claims. An employee could potentially claim that they have been discriminated against on the basis of their race or nationality. We recommend that you call the Advice Team to discuss your particular circumstances.

  • Can I dismiss an employee on JobKeeper for performance or disciplinary reasons?

    If you wish to terminate an employee’s employment who is receiving the JobKeeper payment, you can continue to do so, as long as you follow the normal processes in accordance with the Fair Work Act and other relevant legislation and industrial instruments, and your company policies and procedures. Please ensure you seek advice from the Advice Team before you terminate the employment of an employee so we can provide specific advice.

  • What happens to employees on parental leave?

    You are not eligible to receive a JobKeeper payment for any fortnight in which an employee receives Government funded Parental Leave Pay or Dad and Partner Pay.

    If an eligible employee is on parental leave but is not in receipt of Government funded Parental Leave Pay or Dad and Partner Pay during the fortnight, you are eligible to receive the JobKeeper payment for that employee. Note that you will be required to ensure the employee receives the minimum $1,500 JobKeeper payment per fortnight.

  • I have an employee on unpaid leave. Can I receive the JobKeeper payment for them?

    Yes, as long as that employee meets the eligibility criteria and you ensure they are paid the minimum $1,500 JobKeeper payment per fortnight.

  • I have an employee on personal/carer’s leave. Do I receive the JobKeeper payment for them?

    Yes, as long as the employee meets the eligibility criteria.

  • What happens if an employee takes a period of annual leave whilst receiving the JobKeeper payment?

    If an employee takes annual leave when they are receiving the JobKeeper payment, it would be deducted from their annual leave entitlement as normal. You will continue to receive the JobKeeper payments for that employee during the period of annual leave.

    The standard rules will apply in relation to the JobKeeper payment in that the employee must be paid at least the $1,500 JobKeeper payment, or the actual wages they are entitled to for that fortnight, whichever is greater.

    Annual leave payment exceeds $1,500

    If the payment that the employee is entitled to receive for annual leave exceeds the $1,500 JobKeeper payment, you will need to pay the employee the full amount that they are entitled to for that period of annual leave. For example, if the employee takes 10 days of annual leave and is entitled to be paid $2,000 for that period of leave, you will need to pay the employee $2,000, which will include the $1,500 JobKeeper payment.

    Annual leave payment is less than $1,500

    If the payment that the employee is entitled to receive for annual leave is less than the $1,500 JobKeeper payment, you will need to pay the employee the full $1,500 JobKeeper payment. For example, the employee takes 2 days of annual leave and is entitled to be paid $400 for that period of leave. If the employee is stood down for the remainder of the fortnight, you will need to pay the employee $1,500, which will include the $400 annual leave payment plus a ‘top up’ of $1,100.

    If the employee performs work for the remainder of the fortnight, you will need to pay the annual leave payment, plus the wages for those hours worked, plus any ‘top up’ payment (if required) to ensure the employee receives a minimum of $1,500 for that fortnight.

  • What if an employee was employed full-time for a number of years then moved to casual employment 6 months ago? Do they still get JobKeeper?

    • The key consideration for a casual employee is whether the employee had been engaged on a regular and systematic basis in the 12 months prior to 1 March 2020. Any service as a permanent employee within the past 12 months will be taken into consideration. If they have continued to be engaged on a regular and systematic basis since converting to casual employment, they will be entitled to the payment. If they have not been engaged on a regular and systematic basis since converting to casual employment, they will not meet the eligibility criteria for the JobKeeper payment.

  • What if an employee is receiving workers compensation payments?

    If an employee is receiving workers compensation payments and they are totally incapacitated for work during the entire JobKeeper fortnight, they are not eligible for the JobKeeper payment.

    If an employee is on workers compensation but performs any duties during the JobKeeper fortnight (even if these are light duties or for reduced hours), they are eligible for JobKeeper payments provided they meet the eligibility criteria.

  • If I re-hire a permanent employee, what happens to their entitlements and service?

    When you terminated the employment of the employee, you were required to provide notice of termination and pay out certain accrued entitlements (for example, accrued annual leave and long service leave). You may have also paid redundancy pay.

    If you then re-hire the employee, their entitlements and service will usually start from scratch as you will engage them on a new contract of employment which will not recognise the prior service. However, depending on your industrial instrument and the state or territory in which you are based, the prior period of employment may count towards an employee’s continuous service for some purposes (for example, for long service leave).

  • If I terminated an employee’s employment on grounds of redundancy after 1 March 2020, can I re-hire them, stand them down and then receive JobKeeper?

    Employees who were engaged at 1 March 2020 and were made redundant can be re-hired and stood down, provided the requirements for either the usual stand down provisions in the Fair Work Act or a JobKeeper enabling stand down direction are met. As a business, you could then receive JobKeeper payments to pass on to that employee, provided that the usual employer and employee eligibility requirements are met.

  • If I re-hire an employee I recently made redundant, can I get back any redundancy pay paid?

    At the point you terminated the employee on grounds of redundancy, they became entitled to the redundancy pay.

    For this reason, you have no legal entitlement to recover this payment, even if you later re-hire the employee.

    The rehire will be on a new employment contract.

  • If I re-hire an employee after making them redundant, can they claim unfair dismissal?

    When an employee’s employment is terminated on grounds of redundancy, they are entitled to challenge their termination in the Fair Work Commission through an unfair dismissal claim. Usually, this needs to be lodged within 21 days of their termination taking effect.

    If an employee lodges an unfair dismissal claim, you may need to demonstrate that the redundancy was genuine. This means demonstrating that you no longer required the employee’s job to be performed by anyone, that you complied with any consultation obligations that applied to the employment, and there were no reasonable redeployment opportunities in the business or that of an associated entity.

    If you can demonstrate you met the above requirements, and re-engage the employee simply to provide the JobKeeper payment, it is likely you will be standing the employee down immediately upon re-hiring them in accordance with the usual stand down provisions of the Fair Work Act, or the JobKeeper enabling stand down provisions. In these circumstances, it is unlikely an unfair dismissal claim would be successful. However, it will not prevent employees from bringing a claim.

  • I am half-way through a redundancy process. What are my options?

    If you are still in consultation with your employee about a potential redundancy, and you are receiving (or are eligible to receive) the JobKeeper payment for that employee, the new JobKeeper enabling directions under the Fair Work Act can potentially be used to help you to avoid a redundancy.

    In particular, if you comply with all of the conditions regarding JobKeeper enabling stand down directions, you are able to reduce an employee’s hours, including to zero. Utilising this provision may allow you to keep the employee in employment in the short term, before making a final decision in the future on whether a redundancy is required once business conditions are more stable.

    You should note that any time on a stand down is taken into account when determining how much notice and redundancy pay is required. Therefore, delaying a redundancy through a stand down may result in higher costs if you do decide to proceed with a redundancy in the future.

    For further information on JobKeeper enabling directions, see the Amendments to Fair Work Act – JobKeeper enabling directions section below.

  • What is a “JobKeeper enabling direction”?

    The Fair Work Act has been temporarily amended as a result of the JobKeeper scheme.

    As part of this, employers who are covered by the Fair Work Act and entitled to JobKeeper payments can give eligible employees a JobKeeper enabling direction to vary certain terms of the employee’s employment.

    Broadly speaking, the amendments to the Fair Work Act allow eligible employers to issue a JobKeeper enabling direction in relation to:

    • the duties to be performed by the employee, and/or
    • the location of the employee’s work, and/or
    • the total number of hours to be performed by an employee.

    Provided the specific requirements for issuing any of the above JobKeeper enabling directions are met, the provisions under the Fair Work Act relating to the issuing of JobKeeper enabling directions will prevail over any inconsistent terms in a Fair Work instrument or contract of employment. For example, if a modern award requires you to give advance notice of a change in hours of work, the JobKeeper enabling direction would prevail.

  • Am I eligible to give a JobKeeper enabling direction?

    To issue a JobKeeper enabling direction under the Fair Work Act, certain conditions must be met, including:

    • at the time of making the direction, the employer qualified for the JobKeeper scheme and
    • the direction is reasonable in all of the circumstances and
    • the employer provides the employee at least three days’ notice in writing of the intention to give the direction (or a shorter period as genuinely agreed to by the employee) and
    • the employer consults with the employee or their representative prior to giving the direction, and keeps a written record of this, and
    • the direction itself is given in writing and
    • the employer is entitled to receive the JobKeeper payment for the employee in the period to which the direction applies and
    • the employer pays the employee the greater of the amounts payable to the employee for the performance of work, or the minimum $1,500 JobKeeper payment, for each fortnight to which the direction applies.
  • What are the rules in relation to JobKeeper enabling stand down directions?

    If you meet the rules below, you can direct an employee not to work on a day or days they usually work, or work for a lesser period than they would ordinarily work on a particular day or days, or work a reduced number of hours compared to their normal hours. This can include standing down the employee to no hours at all.

    To make a direction in this way, the rules are:

    1. Your business must qualify for the JobKeeper scheme at the time the direction is given
    2. It must be the case that the employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to the COVID-19 pandemic or government initiatives to slow the transmission of COVID-19 (eg government shutdowns of businesses)
    3. The implementation of the direction must be safe
    4. The direction must be reasonable in all the circumstances
    5. Your business must be entitled to receive the JobKeeper payment for the employee in the period to which the direction applies
    6. The employee must be paid the greater of the $1,500 JobKeeper payment per fortnight or the amount payable for work performed
    7. The employee’s hourly rate of pay cannot be reduced
    8. Before giving the direction, your business must consult the employee (or their representative) about the direction
    9. The employee must be given 3 days’ written notice of your business’ intention to give the direction (or earlier, if genuinely agreed with the employee)
    10. The direction must be in writing

    If the above rules are complied with, the employee must comply with the direction. If the employee does not comply, you can make an application to the Fair Work Commission to deal with the dispute.

  • What are the rules in relation to directing an employee to perform different duties?

    If you meet the rules below, you can direct an employee to perform any duties that are within the employee’s skill and competency.

    To make a direction in this way, the rules are:

    1. Your business must qualify for the JobKeeper scheme at the time the direction is given
    2. The duties must be safe
    3. The employee must have any required licence or qualification to perform the duties
    4. The duties must be reasonably within the scope of your business operations
    5. The direction must be reasonable in all the circumstances
    6. You have information that leads you to reasonably believe that the direction is necessary to continue employment of one or more employees
    7. Your business must be entitled to receive the JobKeeper payment for the employee in the period to which the direction applies
    8. The employee must be paid the greater of the $1,500 JobKeeper payment per fortnight or the amount payable for work performed
    9. The employee’s hourly rate of pay must be the higher of the base rate of pay that would have applied if the direction was not given, or the base rate of pay that is applicable to the duties the employees is performing
    10. Before giving the direction, your business must consult the employee (or their representative) about the direction
    11. The employee must be given 3 days’ written notice of your business’ intention to give the direction (or earlier, if genuinely agreed with the employee)
    12. The direction must be in writing

    If the above rules are complied with, the employee must comply with the direction. If the employee does not comply, you can make an application to the Fair Work Commission to deal with the dispute.

  • What are the rules in relation to directing an employee to perform duties at a different location?

    If you meet the rules below, you can direct an employee to perform duties at a place that is different from their normal place of work, including their home.

    To make a direction in this way, the rules are:

    1. Your business must qualify for the JobKeeper scheme at the time the direction is given
    2. The place must be suitable for the employee’s duties
    3. The employee must not have to travel an unreasonable distance to get to the place
    4. The performance of the duties at the place must be safe and reasonably within the scope of your business operations
    5. You have information that leads you to reasonably believe that the direction is necessary to continue employment of one or more employees
    6. The direction must be reasonable in all the circumstances
    7. Your business must be entitled to receive the JobKeeper payment for the employee in the period to which the direction applies
    8. The employee must be paid the greater of the $1,500 JobKeeper payment per fortnight or the amount payable for work performed
    9. Before giving the direction, your business must consult the employee (or their representative) about the direction
    10. The employee must be given 3 days’ written notice of your business’ intention to give the direction (or earlier, if genuinely agreed with the employee)
    11. The direction must be in writing

    If the above rules are complied with, the employee must comply with the direction. If the employee does not comply, you can make an application to the Fair Work Commission to deal with the dispute.

  • How long does a JobKeeper enabling direction apply for?

    Once a JobKeeper enabling direction is issued, it will remain in force until:

    • it is withdrawn or revoked by the employer or
    • it is replaced by a new JobKeeper enabling direction given by the employer to the employee under that section.

    If neither of the above occur, JobKeeper enabling directions will automatically cease to have effect from 28 September 2020.

  • What if my employee refuses to follow the JobKeeper enabling direction I have given them?

    • An eligible employee who is given a JobKeeper enabling direction in accordance with the Fair Work Act must comply with the direction, unless the direction is not reasonable in the circumstances. If the employee fails to comply, you have the ability to make an application to the Fair Work Commission to deal with the dispute. The Fair Work Commission has the power to approve the direction, set it aside or provide an alternative JobKeeper enabling direction. Failure to comply gives rise to a breach of the Fair Work Act.

  • What other options do I have under these changes?

    In addition to the ability to give JobKeeper enabling directions, under these amendments to the Fair Work Act, employers who meet certain criteria can reach agreement with their employees in relation to:

    • altering the days or times when an employee performs work and/or
    • requesting employees to take annual leave, including at half pay.

    Certain rules apply which are detailed below.

  • What are the rules in relation to requesting employees to take annual leave?

    If your business qualifies for the JobKeeper scheme, and is entitled to one or more JobKeeper payments in respect to a particular employee, you may request that employee to take a period of annual leave, provided that complying with the request will not result in the employee’s annual leave balance falling below two weeks. We recommend that you discuss any such request with your employee verbally, before confirming the request in writing.

    Once you have made this request, the employee cannot unreasonably refuse this.

    If the employee agrees to take the period of annual leave, this agreement should be confirmed in writing.

    If the employee does not agree to take the period of annual leave, you should ask them to outline their reasons for refusing the request. If the refusal is not reasonable, you may be able to lodge a dispute with the Fair Work Commission.

  • What are the rules in relation to taking annual leave at half pay?

    If your business qualifies for the JobKeeper scheme and is entitled to one or more JobKeeper payments in respect of a particular employee for a period in which they are taking annual leave, an agreement can be reached between you and the employee for the annual leave to be taken at half pay.

    If you reach an agreement of this nature, you must record this in writing and have it acknowledged by the employee.

  • What are the rules in relation to requesting employees to change their days or times of work?

    If your business qualifies for the JobKeeper scheme, and is entitled to one or more JobKeeper payments in respect to a particular employee for a period to which the request applies, 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 and the request does not have the effect of reducing the employee’s number of hours of work.

    We recommend that you discuss any such request with your employee verbally, before confirming the request in writing.

    Once you have made this request, the employee can not unreasonably refuse this.

    If the employee agrees to change the days or times they work, this agreement must be confirmed in writing.

    If the employee does not agree to change the days or times they work, you should ask them to outline their reasons for refusing the request. If the refusal is not reasonable, you may be able to lodge a dispute with the Fair Work Commission.

  • Does the employee accrue entitlements when they are on a JobKeeper enabling direction or agreement?

    Where you have given an employee a JobKeeper enabling stand down direction or reach an agreement with an employee to take annual leave at full or half pay, the employee will accrue leave entitlements as if the direction had not been given.

    The period in which the JobKeeper enabling stand down direction or annual leave agreement applied will also be counted for the purposes of calculating redundancy pay and payment in lieu of termination.

    For all other types of JobKeeper enabling directions and agreements, the normal rules relating to the accrual of entitlements will apply.

  • Under the JobKeeper amendments to the Fair Work Act, can I reduce my employee’s pay?

    You need to continue to pay employees for any work they perform. If the work they perform entitles the employee to be paid more than $1,500 per fortnight, you must continue to pay them the amount they are entitled to.

    If you need to drop an employee’s pay and they are an eligible employee who you are receiving JobKeeper for, one way to do so is by reducing the employee’s hours of work. Under the Fair Work Act, you are now able make a JobKeeper enabling direction where you can direct eligible employees to work fewer days or hours where they cannot usefully be employed for their normal hours because of business changes attributable to COVID-19 or a government initiative to slow the transmission (eg government shut-downs). To do so, you need to meet the conditions relating to JobKeeper enabling directions set out above.

    However, the employee’s rate of pay cannot be reduced when they are under a JobKeeper enabling direction.

    If an employee is not under a JobKeeper enabling direction and the employee earns above the minimum rate of pay required by their industrial instrument (eg their award or employment contract), you may attempt to negotiate with the employee to reduce their rate of pay. Note that there is no requirement for the employee to agree to this, and you cannot reduce their pay below the minimum required by their industrial instrument.

    If you agree with the employee to reduce their rate of pay, this should be reflected in a written agreement that is signed by both you and the employee to avoid any future disputes on what was agreed.

  • Can I give a direction to an employee to increase their hours?

    The amendments to the Fair Work Act do not explicitly give employers a right to unilaterally increase an employee’s hours of work. They only allow a direction to be issued to reduce an employee’s hours, where certain requirements are met. A permanent employee’s hours of work could therefore only be increased in accordance with the provisions of an applicable industrial instrument, or by mutual agreement. A casual employee’s hours of work could only be increased from their usual hours where the increase is reasonable.

The information contained in this document is strictly confidential and may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of Employsure Pty Limited. The information is for background purposes only, does not purport to be full or complete and does not constitute advice. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in this document and no liability is accepted for the accuracy or completeness of any such information or opinions. To obtain advice on your specific situation, please call the Advice Team on 1300 651 415.

Coronavirus Resources For Employers

To help your business navigate the COVID-19 crisis, we’ve put together a Coronavirus Resource Hub where you will be able to find useful guides and downloadables.

FREE Coronavirus Guide

With the outbreak of Coronavirus, understand basic employer obligations to employees, including sick leave, quarantine and remote working.

Employsure Client? Maximise Your Mutual

If you are a client of Employsure, you are most likely a member of Employsure Mutual. Here are some tips to make the most of your Protection during the Coronavirus crisis.

Tips to Protect your Business when Managing Covid-19 Workplace Re-Organisation*

  • Contact Employsure for advice on any issues relating to your employees or work health and safety concerns
  • If you need to re-organise your workplace and, in particular, if this is likely to result in reductions to pay or changes to employment contracts, contact Employsure to obtain advice and guidance on how to address these issues (what to do and day and what not to do and say) and follow the advice as to recommended processes and documentation
  • Provide Employsure with accurate and detailed information
  • Before making a decision to dismiss an employee or change their employment conditions, contact Employsure for advice


Remember
: It is a condition of Employsure Protect that Employsure’s advice is sought and followed in relation to matters that have the potential to result in a claim.  Claims arising where advice has not been sought and followed are excluded under Clauses 4 and 6 of Section 2 of the Employsure Protect Product Disclosure Statement.

*You are required to seek and follow advice from Employsure when you become aware of circumstances which may give rise to an Employment Claim or Health and Safety Claim in order to have the benefit of Protection through Employsure Protect (please refer to the Product Disclosure Statement for full terms and conditions).

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Access Employsure’s Workplace Ready Resource Pack here to get your business ready.

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