Managing Through COVID-19 Crisis: JobKeeper Changes & Paid Pandemic Leave

Published August 30, 2020 Views: 13

28/08/20

On today’s live stream, Ed provided updates on JobKeeper changes, paid pandemic leave, IR amendments, redundancy and more.

Transcript

  • Managing Through COVID-19 Crisis: JobKeeper Changes & Paid Pandemic Leave

    Ed: Hi, everyone, Ed here for our usual Friday’s session. I hope that everyone is well. It’s been a relatively calm week in the context of the crisis. But there’s still things to talk about and I’m gonna go through them over the course of today. Just to give you a bit of structure for the day, there are really five things that I wanna talk about.

     

    The first of which is JobKeeper 2.0. Which a number of you will be concerned about trying to understand exactly what’s going on, what’s the mixed messaging in the media about that, and I’ll go through what’s going on there. The second is what I’m gonna call JobKeeper 1.5. I think that was a really poorly publicized extension of JobKeeper that a number of people have missed out on. I’ll talk a bit about how we’ve worked it here and what it means for us just to give you a sense of that. The third is a narrow one, which is the advent of Paid Pandemic Leave, Disaster Payments in Tasmania. It’s narrow, but it might be relevant to other states as well, it seems that the federal government’s doing agreements with different states on that basis. The fifth one I’m gonna talk about is some IR amendments. And then finally, I’m just gonna do a sort of whistlestop tour through the concept of redundancy for you to try and give you a sense as to how you might go through a redundancy process, if you’re starting to need to think about that in the context of preparing for the worst and maybe you’re not gonna qualify for JobKeeper 2.0. I don’t think we will do here, for example, and you’ll, therefore, need to start thinking about your planning. And also some practical reasons to do that, which I’ll come back to in a moment. I think that there are some tactics you need to start thinking about as employers at this stage of the crisis, which I’ll talk to.

     

    So, just quick shout out to Dynamic Business and those watching it through there today. Good to have you on board again. I’m really pleased that we’re sharing some of this content with new viewers, and I hope you find it useful.

     

    JobKeeper 2.0. So, I don’t know about you guys, but I was driving along in my car the other day and listening to the radio and up came an advert on the radio, announcing JobKeeper 2.0. This is what’s happening, it’s extended till March, new payment levels, all of these things. And not a word of it was said with any caveat, there was no suggestion that this has not actually yet passed through legislation, instead, it was said with absolute certainty that this is what we can all expect and we can get. I find it remarkable, I have to say, that, you know, that level of frankly, misleading advertising in the context of JobKeeper that the government can get away with. I don’t know whether they do it just to put political pressure on the opposition or something like that. And so we’ve already told everyone now so we’ve got to pass it through. But the reality is JobKeeper 2.0 still has not been passed through legislation. They…what has happened this week is that everyone was turned up in Canberra for a couple of weeks of sitting. And they’ve been negotiating, doing a back corridor deals about JobKeeper and seeing which bits might need to change pending actually being passed through the legislative process. But we don’t have any certainty around it at the moment.

     

    Somewhat amazingly on Friday, apparently the Senate doesn’t sit, there’ll be some archaic reason for that, but amazing in the context of this crisis, everyone’s doing everything we can to keep our businesses going and the economy afloat. And these guys are having a long lunch on Friday, presumably. So, but the consequence of that is we’re unlikely to hear any outcome today, we’re gonna have to wait until next week now. Now, bear in mind that next week, we’re into September, JobKeeper 1.0 finishes at the end of September. Three to four weeks in the context of business is nothing. And really what we’re suffering I think at the moment is a lack of certainty about what’s going on. So, unfortunately, I can’t help with that. I can’t create certainty where there isn’t any. At the moment, JobKeeper 2.0 has not passed into legislation so you should not be banking on it hitting your account at the beginning of October. You should be preparing for the worst, but planning for the best. So, it may be that you have suffered the level of consequences that is rumored will qualify you for JobKeeper 2.0, which is a 30% downturn in your turnover for the September quarter, compared to this period last year, but there might not be as simple as that, there might be changes.

     

    What we’re seeing in terms of what’s coming out in the media, it seems to be the hot topics of debate are these things. That there seems to be a bit of trading going on between this concept of the Industrial Relations extensions, you remember that JobKeeper 1.0 created these extra rights for employers under the Fair Work Act. And they were significant rights, really very significant rights, in that what it enabled you to do was to vary the hours that your people worked for you, you were even able to stand them down completely on a unilateral basis. There were some notice requirements, but basically, you didn’t have to seek their agreement to do those variations. So, it gave employers quite a lot of power to act in certain ways towards their staff. And the debate has been this is that, as I understand it, on the liberal side, they are saying that those powers should extend for all employers that were qualified for JobKeeper 1.0 but won’t qualify for JobKeeper 2.0. And the response by labor is “No, we think that those are powers, too extensive and can be potentially abused by employers who are now not in that bad position and shouldn’t have abnormal levels of rights over their employees.”

     

    And the debate seems to be raging on that ground and basically Labor are saying, “Well, if you guys are gonna force that through then we’re gonna be much more reticent in our support for the financial elements of JobKeeper 2.0.” So, that’s sort of horse-trading is going on at the moment where they seem to have got to but where they will land is anyone’s guess. But where they seem to have got to is that there’s now this sort of concession that only businesses with 10% downturn in their turnover for the September quarter, will be able to get some level of JobKeeper and Fair Work rights and so they will be able to unilaterally act against their employees. Whereas, those businesses that are doing better than 10% down on the September to the September quarter won’t. We don’t know that for certain yet. So, don’t go rushing out making decisions based on it. But that’s the nature of the debate.

     

    One element of it, though, is that it really gets confusing if that wasn’t confusing enough. By the way, it really gets confusing when you get to this stage is that Labor is also saying that if they’re gonna concede to this idea of having industrial relations rights for any businesses that are not on JobKeeper 2.0. What they want is a flow in the amount of wages that you will have to pay your staff. So, it’s been ruminated that you will, under JobKeeper 2.0, be able to reduce the hours of your staff up to 60%. Not all the way down to zero as you have previously been able to do, but you’ll be able to do up to 60% down. And if you look at that on a minimum wage basis, so the minimum wage for a 38 hour week would be 750 odd dollars. If you reduce those hours by 60%, you’d basically get to $300 and what Labor is saying is you should have to pay those people, not $300, you should have to pay them $600, which is what they would be getting if your business was qualified for JobKeeper. So, utterly perplexing, to be honest, because that gap of $300 isn’t funded by the government. What Labor seem to be proposing, therefore, is that you and I, as business owners, would be funding that directly ourselves, which in turn undermines the very purpose of being able to reduce the hours.

     

    So, some really complex stuff in there. And this is why it bears not much sense for anyone other than someone that’s an industrial relations keen on like myself who wants to understand what’s going on, as they horse trade towards an agreement. There’s not really much benefit in you guys worrying about it. And I hope that doesn’t sound patronizing. I don’t mean it in that way. But remember, we say on here that worrying is not thinking, you sitting there clicking refresh on those live feed things on the newspapers to find out what the latest potential horse trade is. Remember most of these are just rumors given off to journalists so they can write some piece about it. There’s no point in worrying about that until we actually know what the outcome is. What we know so far is all of those ins and outs that are going on, the tos and fros on the negotiation are frankly just far too complex for business owners to understand and implement sensibly. What we’re craving is a simple system that isn’t filled with loopholes and tripwires. I think what we know by this stage of the crisis is that fundamentally people are very conservative when it comes to adherence of rules. It might not be true to absolutely everyone, but generally, in the business community, that if, for example, you said that people only get these industrial relations benefits if you’re 10% or more down on last year. It’s gonna cause a lot of confusion as to what 10% down means, how you implement that, what if I was 9.5% in one, you know, and all the things that we’ve heard before, are gonna create these problems.

     

    And we just really want a nice simple system. If you then…if you were able to reduce certain hours, but then had to top them up with your own money and so on, is just mess. Mess equals lack of confidence. Lack of confidence is bad for the economy. And it’s as simple as that. So, my hope and plea to the government is, get this done quickly. Get it done simply. I appreciate that you’re trying to build the airplane after you’ve jumped off the cliff on your way down but we need to get this done quickly for the sake of businesses that in four weeks’ time need to be working out very clearly what they’re doing with their staff.

     

    So, that’s JobKeeper 2.0. I’m gonna rewind a bit though and talk about JobKeeper 1.5. Because I think that for some of you, as it has been for Employsure, you may be leaving money on the table that you need to go and have a look at whether you can recover. So, I’ll give you a sense of this, in working in preparation for this live stream over the last couple of weeks, I picked up that there had been a change and I noticed a couple of you have picked it up in the questions you’ve asked as well. In the qualification date for staff that are eligible for JobKeeper 1.0, which is why I’m calling it 1.5. It moved from that first of March date which would all got quite used to the first of July. Now, maybe I was looking the wrong way or, I don’t know, just didn’t click on the newspaper that day or something but I thought that was incredibly under-publicized. It’s quite a big shift, so what’s that? Three or four-month shift in the number of people…in the people that you could claim JobKeeper 1.0 for.

     

    Remember, back in at the beginning of April, when we were going through JobKeeper 1.0, there were loads of questions about what happens if someone signed their contract at the end of February, but they didn’t start with me until the third of March. I think actually, the third of March was a Monday even so you had a lot of people starting on the third of March who didn’t qualify because the date was the first of March. And all of those sorts of problems that meant that for those people, you couldn’t get the $1,500 per fortnight. And that’s valuable money to businesses when those people were people that were working. So you were gonna get a true JobKeeper subsidy that you were otherwise paying the $1,500 to them in salary yourself but weren’t able to claim it back from the government, rather than people that were stood down and you’re essentially passing on a social subsidy.

     

    So, what happened is that the goalposts have been shifted for the August fortnight’s going forward. And so, you basically get, I think, four fortnights that you’re gonna be able to claim for people that started at any time up to the first of July, and for regular and systematic casuals, that becoming the 12-month marker. And that’s a really significant amount of monies that, let’s say it’s just one employee, that’s six grand that you’re gonna get against the employee that falls into that period between the first of March and first of July as a starter. Six grand per employee. To give you a sense of it here, we had about 70 or 80 people start for us during that period. When you get your calculator out, that’s $500,000 that’s coming to our business that there was no notification through the existing scheme. So, the person internally that does payroll for us received absolutely nothing from the government to say that this has shifted. And there was no notification actually through the Bookkeepers and Payroll Association that provides information to professionals like that. They had no update to them at all.

     

    And consequently, as a business, but for the fact that this is what we do for a living and understand that we’re constantly looking at JobKeeper rules and so forth to see what’s happening. But for that, we would have missed out on that $500,000. And fortunately, we have a team here that stays constantly looking at those changes and keeping on top of them, which in turn was able to notify, not just us, but also our clients. But you need to be really careful guys, really careful about this because you could be missing out on money. Six grand, essentially per person, a couple of people might have started for you at that time, that’s 12 grand, 12 grand goes a long, long way at the moment. And you need to be going and looking at whether there’s maybe some extra jobKeeper 1.0 that you can claim under 1.5.

     

    That was the second thing I wanted to go through. The third one I mentioned Paid Pandemic Leave or Disaster Leave over in Tasmania. It’s quite curious this one because you wonder why. So, first of all, they set it up in Victoria. And basically, the principle was that if you are required to self-isolate in Victoria, you could through the federal government claim back $1,500 for every time in which that occurred. But it was subject to the fact that you basically weren’t getting money from anywhere else. You weren’t getting any other benefits, there was no access to sick leave, and so on. So, it was meant to really get down to helping particularly casual workers, for example, to try and stop people doing what’s known as presenteeism, turning up to work when they’re feeling sick just because they don’t wanna miss out on the wages. And so, that was done in Victoria. It’s now being done in Tasmania. Why they have gone Tasmania, I’m not entirely clear, it seems to be to do with the fact that in Tasmania, there’s been some agreement done between state and federal governments where presumably they will be chipping in as they are in Victoria for non-citizens, I think. So, people that are over on visas and so forth. So, but I don’t know the nature of the deal, all I know is that that’s come up in Tasmania, and it may come up in New South Wales. Queensland already has their version of it paid through the state but you might see it in other states coming up as well. So let’s see, let’s watch this space. Maybe the government tries to use it as some sort of bargaining tool to try and encourage borders opening because that obviously has been a bugbear over the last few weeks for the federal government.

     

    Next thing, IR Amendments. So maybe this is just for those of just spend their time like me looking up things that are going on in the Employment Relations, Workplace Relations, Industrial Relations, whatever you wanna call it world. But you might recall that there are these committees sitting somewhere, talking about how they’re gonna change industrial relations on the back of the pandemic. The tenor of those conversations don’t seem to be going that well fairly predictably, we’re not hearing any suggestion that we’re gonna see any grand changes. I could, I think I did actually say on here that I would have betted on that. If I didn’t, I’m gonna quickly bet on it now to say we will see nothing significant come out of those conversations. They’ve got the wrong people in the room. They don’t have people speaking up with the voice of the majority of employers in Australia, which is you guys, small business owners. We haven’t been asked to give you a sense of it. We have 27,000 small business owners as clients of ours, and no one has just paused to say, “What is it that you guys find most frustrating about the Australian Workplace Relations system?” I would have told them that almost 50% of our calls are around the award system. So, we’re receiving over 1,000 calls a day, on average, about modern awards and how frustrated businesses are with trying to work out their obligations and duties under those modern awards to their staff.

     

    But that, to me, is unlikely to ever even be near the table because they’re not, like I say, speaking to the right people, instead, they’re faffing around talking about enterprise agreements. Enterprise agreements only cover-up, I think, 10% or 12% of businesses in the whole of Australia. The vast majority of those enterprise agreements are with big organizations, big companies, well, in excess of 200 staff, you wouldn’t typically have an enterprise agreement if you are a small or medium-sized business. So, we’re spending day upon day banging on about enterprise agreements and people with the resources to actually work out how to deal with awards, instead of focusing on the real challenge at the small business level, particularly the micro level, people need some support for that.

     

    That was a bit of a rant as much as an update so. Right, last thing before we move on to Stu’s Q&A. [inaudible 00:19:03] Q&A, I’ve noticed someone calling him again this week. So, the last thing was the redundancy process. And I’m just putting this in as a sort of marker in these sessions. It’s not for me to…you know, I’m not running around banging our redundancy drum saying, “Go sack your people.” That’s not my interest. And we, as a business, have openly said to our staff here that we will only make redundancies as a very last resort, even in the context of preserving cash, we are looking at reducing staff cost as our very last resort. So, culturally, as a business, it’s not what we’re rushing to. But it can become inevitable. It may become inevitable for us depending on how the crisis unfolds, and we have to prepare as though it might. And equally, you guys should be preparing on the basis that it might get to the stage that you need to go through redundancy processes if you don’t qualify for JobKeeper 2.0, maybe that’s pretty imminent. Even if you do, I’d encourage you not to become just an envoy for subsidies, passing on money to employees, rather looking at this critically and saying, “How do I best manage my business through the crisis.” That’s your fiduciary duty to your business, your fiduciary duty is actually, in law, trumps your duties to your staff, you’ve got to make sure that you are acting in the best interest of the business, not simply making sure you keep on your staff at any cost.

     

    And there is another practical reason I’m predicting is something that you should be thinking about at this stage is that we’re at the front end to some degree of the pandemic at the moment. I perhaps prematurely thought that we were on the way out of the woods in many respects and we’ve gone backwards clearly over the last few weeks. But we’re at the front end of what the pandemic means for the business in the medium and long-term. We don’t understand yet how people’s views are gonna change, how the economy is going to change, and so on. What I would…I gamely predict though is this, is that people’s tolerance for workplace outcomes that negatively affect them is higher today than it will be in the weeks and months to come. So, when JobKeeper 2.0 comes to an end in March, I think what you’ll find is that people are much more prone to fight a redundancy at that stage and they might be at this stage if it’s done properly and fairly openly and honestly. So, what you don’t wanna do is keep putting off that decision just because you might be getting some JobKeeper subsidy. And then finally, you actually end up in a load of Employment Relations disputes when you get to them next March, just because people are much more hostile to the concept of redundancy. And remember, of course, if that goes hand in hand, with a significant decline in the economy, we’ve obviously seen some declines so far. But let’s say that just keeps getting worse and worse, people are gonna be much more desperate to recover any sums that they think they might be due through a redundancy or failed redundancy process.

     

    So, the whistle-stop tour that I wanna give, you know, there’s no way that in a short session, I could give you the full ins and outs of redundancy. It’s a very complex process that you need to be wary of. First thing to say is this, is that small businesses might not have to pay redundancy pay, it doesn’t mean that they don’t have to dismiss people fairly. So, I would present to you that regardless of whether you’re obliged to make redundancy payments to your staff, if you make them redundant, you’ve got to look at doing it fairly. And I’d encourage you to go through this process come what may. And the first element of any redundancy process is warning your staff of what might come. Telling them collectively, or at least those that might be impacted by the potential redundancies, that you are considering making changes to the business which might result in their roles becoming redundant.

     

    The second element that flows from that is that you then after the warning need to consult with your staff. So, you need to sit down and speak to them individually, typically, to ask them for their views on ways in which redundancy might be avoided. Now, in New Zealand, this gets…it’s a really tortured process interestingly, that in New Zealand, the staff have a right to ask for some really quite detailed information about company financials and things like that. That makes a real mess of the consultation process. It’s not such onerous obligations in Australia, but you should still be fair and transparent about what you are proposing to do. And I stress proposing because you cannot make the decision by this stage. That might seem totally artificial to a business owner to say, “Really? I’m not allowed to make decisions about the costs that I want to cut in my business without checking with my staff.” And that’s the reality of redundancy processes. A fair process means that you ask your staff and ask for their view, you’ve already formed your decision that they are going, and you’re doing it as window dressing, you’ve got an unfair dismissal. So, you need to be very careful about that. Consult with your staff.

     

    You might then need to go through a third stage, which is selecting them. So, if you have more than one staff member doing the same role, let’s say you had two people doing the same job, and you only need to reduce one headcount, you would then have to work out a way of selecting which of those two people will gonna go. Now, in small businesses, that quite often that selection process in the business owner’s mind is, “I’m gonna get rid of the person I least like working with.” The problem with that is that that might…that feeling of why you like working with someone might have all sorts of banana skins littered around it that you could be slipping on and finding yourself liable for unfair dismissal or potentially even discrimination. A classic one might be, I’m gonna keep that person because they’re my relative and the other one isn’t. It’s a classic small business situation. Or I’m gonna keep that other one because they don’t take as many sickies, they don’t have children, therefore, they’re not gonna take time off to care for their children in the same way. All of those are wrong reasons to do selection, you’ve got to go through a fair and objective, non-discriminatory selection process to make sure that you don’t pick on them in a way that’s unlawful. But you then try as a fourth stage to redeploy them, are there any other jobs in your business that you could put them into? And they’ve got an obligation if they are fair and reasonable alternative jobs to accept those roles before finally, you might move to terminating their employment. So there’s quite a few hurdles to go through. And I stress that now because hurdles equal time, time equals money.

     

    If you’re not thinking about this now, you’re gonna end up delayed, let’s say you’re not gonna get JobKeeper 2.0. And you don’t do anything about this until right at the end of JobKeeper 2.0, say you’ve got some staff members that stood down, you’re gonna have to bring them back to work at the end of JobKeeper 2.0. You have to pay for them to work during the period that you go through that redundancy process. So, you’re gonna burn cash because you haven’t got your stuff sorted out now and you’re not being organized enough to get on with it. So, I can’t urge you strongly enough guys, get your head down to the JobKeeper’s sand. Don’t wait until the end of JobKeeper 1.0 or even to the end of the 2.0 to make decisions that you need to make around your business. You’ve got…it’s time to cut out the sentiment and time to really think carefully about, what I called, your fiduciary duties here. But it’s your primary obligation. You might remember on these sessions before, we’ve said that you’ve got three hats. Here, you have your hat to your business, you have your hat to your staff, and you’ve probably got a third hat which will be your hat to your family. Now, you will emotionally have different feelings of which one of those takes primacy. But the reality is in your business, in your day-to-day job, your business hat must over your employee hat. They should hopefully align, but if they don’t, then you need to make sure the business hat comes first.

     

    So, those are the things that I wanted to cover, Stu, how are we going on questions?

     

    [00:27:45]

    Stu: Good, Ed. And just to kick it off, a friendly reminder from one of our colleagues that because we’re getting quite a few financial questions through today, that this Q&A is basically opinions and suggestions only, not qualified financial advice.

     

    [00:27:58]

    Ed: I will happily provide that friendly reminder from, I presume that’s our head of risk who’s sending a friendly reminder. That these…when I talk about the JobKeeper 1.5, I’m simply telling you what we have done as a business, and how worried I was as a business owner about the failure in my mind of the government to properly publicize that change. Whether you are eligible for it, I don’t know. You need to go and speak to your accountant about it. We are Workplace Relations specialists. That’s what we do. So, any associations out there you got any concerns about that, you know, we can assure you that we’re doing nothing but find Employment Relations advice here.

     

    [00:28:38]

    Stu: And to pick off the Q&A proper just a couple of comments apropos about what you were saying before, from Jason, he’s feeling pretty stiffed, “I’ve added three more employees and paid them JobKeeper and now it hasn’t even passed Parliament law, will be crap if they change it and people have paid JobKeeper without being paid back.”

     

    [00:28:55]

    Ed: So, Jason, don’t worry about it if you’re getting JobKeeper 1.0, then that carries on until the end of September. So, any employees that you’ve added as long as they qualify by the first of July date, you’ll get paid for the August and September fortnights. So, you wouldn’t have paid yet unless you’re paying people in advance for work in October, you wouldn’t have paid yet anything that would fall under the auspices of JobKeeper 2.0.

     

    [00:29:25]

    Stu: And again, just a secondary comment from Susie, “The Pollys are not interested in what small business has to say, that has always been the case. They give lip service to small business, but we’re never in the room, as you say.”

     

    [00:29:37]

    Ed: You know, I think one of the most insightful things for me during this as a small business owner, has been that I’ve always assumed that the politicians are sort of battered up by and spend their whole time acting in big business interests and ignore small businesses as a collective. I think probably the thing that I’ve seen during this crisis is big businesses are screwed by this as well and the politicians don’t actually support them. So, if you’d look at Qantas, for example, you know, for all of the times that any of us get frustrated with the, let’s say, contradictions in some of the concepts of lockdown that we see and how it impacts our business. If you were a business in Queensland, for example, you might be screaming from the top of your lungs about the frustrations that you’re seeing where COVID cases are so low, so, so low, your borders are shut, people have got this consequential confidence knock from Victoria and elsewhere. And you’d feel like you haven’t been led through the crisis properly. Imagine that if you’re Alan Joyce, frankly, appreciate that it’s not his business in the same way that it is a small business owner’s. But imagine your whole business being shattered by the political gamesmanship that’s going on about borders at the moment.

     

    [00:30:56]

    Stu: This from Felicity, “I thought you needed to be in for a minimum of 12 months before qualifying for JobKeeper?”

     

    [00:31:04]

    Ed: Only for regular and systematic casuals, Felicity, and regular and systematic casuals…I don’t know what the case will be with 2.0, by the way, we’ll have to wait and see. But for 1.0, the difficulty here, the industrial relations upon relations banana skin I’d watch out for here is that you remember that a few months ago, this concept of permanent casuals was said to entitle people to benefits like leave, paid leave. So, my problem with JobKeeper 1.0 was that you were asked to identify who in your business was a regular and systematic casual which to an employment relations specialist sounds like, who in your business are you admitting you might owe annual leave to? So, don’t feel like you’ve got to go and do people favors by nominating them as regular and systematic casuals. Be very careful because in benefiting them with JobKeeper, you may actually have exposed yourself behind to someone tapping you on the shoulder and saying, “By the way, you owe them some leave there.”

     

    [00:32:08]

    Stu: And Ed, this one from Monaco with quite a few followers, “If an employee is on JobKeeper and needs to go through redundancy, is there any loss of entitlements that is normal leave entitlements. Is it still paid out as normal through redundancy?”

     

    [00:32:22]

    Ed: So, if an employee…yeah, redundancy pay would be paid out on top as a termination payment rather than his wages. So, yes, it would, what might be subsumed by JobKeeper would be the amount and wages that you would pay out by way of notice. So, if someone who was on a stand down, for example, you wouldn’t have to pay them out their full wages, you’d pay them the JobKeeper for the period of their notice. And, remembering that if it’s…if they only work for part of a fortnight, you pay them for the full $1,500 in any event.

     

    [00:32:59]

    Stu: This one from Naomi, “If a company is sold, can current JobKeeper-eligible employees remain on JobKeeper? I’m assuming that the ABN needs to remain the same.”

     

    [00:33:10]

    Ed: Good question, Naomi. There are specific rules about this that I can’t recall off the top of my head, to be honest, we’ll see if we can answer that and may well be one that’s better for your accountant anyway.

     

    [00:33:22]

    Stu: From Laura, she’s a client, “An employee has retired and they are receiving JobKeeper with the top-up. On the last payment, do I pay the top up or will the annual/ long service leave cover it?”

     

    [00:33:35]

    Ed: So, JobKeeper relates to wages. So, anything that they are owed in terms of their annual leave on termination or any long service leave would be paid on top of it separate to whatever the hours they’re doing or working or not working for you. So, I think what you’re asking is this is that actually they get paid less than the $1,500 at the moment and you’re paying them up to $1,500. But you can’t use that, the top-up to offset against other sums that they are either contractually or by legislation entitled to.

     

    [00:34:17]

    Stu: This one from Karen, “If your staff are only being paid for JobKeeper hours only, that is 10 hours instead of their normal 40 hours, should they be accruing holiday leave on the 10 hours or 40 hours?”

     

    [00:34: 29]

    Ed: So, if you stood them down they accrued on the 10.

     

    [00:34:35]

    Stu: Andrew says, “Hi, Ed. Read JobKeeper 1.5, what are the time limits for when we can apply/ nominate/ accept nominations from any of these newly eligible staff? I cannot find any dates when things actually must be done.”

     

    [00:34:49]

    Ed: It’s…who is that from?

     

    [00:34:51]

    Stu: Andrew.

     

    [00:34:52]

    Ed: Andrew, I think you’re asking about JobKeeper 2.0, Andrew, and if so, then there aren’t any dates at the moment. Watch this space over the next week, I anticipate next Friday will be a pretty big session. We’ll need to talk about what actually gets legislated. I don’t know if you remember though, last time, we thought that and we thought the session just after the legislation would be a big one, but then nothing really actually comes out from the legislation. And then need to draft a series of rules, which they then publish, and that took another week or so. So it may well be that we’re well in September before we know how anyone’s gonna apply or be eligible for JobKeeper 2.0. If you’re asking about JobKeeper 1.5, you need to just get nominations forms done by any employees that might be eligible. Check your accountant if you’re concerned about eligibility questions. And then you don’t actually need to apply separately if you’re already getting it, you just need to add them to the ongoing process.

     

    [00:35:53]

    Stu: Okay. From Maria, “If an employer is receiving JobKeeper, can they withhold that and ask the employee to take their RDOs first?”

     

    [00: 36:07]

    Ed: No, you can’t withhold JobKeeper. So, if you’ve got someone that’s on an RDO, you just need to…you can instruct them to do their RDO subject what your award or Enterprise Agreement might say. But then you would pass on the $1,500 as part of whatever payment that you make to them. If they get more than $1,500 then you would need to pay them more I believe if you stood them down, no.

     

    [00:36:37]

    Stu: From Mark, he’s a client, “So, when do you suggest that we pay…”

     

    [00:36:41]

    Ed: So sorry, just pause on that. I was just thinking there’s an interesting case today in the newspaper about Qantas getting…it’s sort of similar in a way that they pay their employees, I think, a fortnight in arrears. So, you work in a fortnight then you do and you might do say some overtime in that and then there’s another period before they then get paid for that. Qantas haven’t been paying for the overtime if they’ve been stood down in that second fortnight even though that money relates to the first fortnight which sounds a bit like that question. That sort of the rule of thumb generally is this is that it’s the classical old adage there if it looks like a duck and quacks like a duck, it’s probably a duck. So just don’t…if someone…if you’re instructing someone to taking out an RDO, you know, it seems unlikely to me that you could then turn around say, “They’re not working, therefore, I only have to pay them the $1,500.” You can instruct them to take the RDOs but they would need to be paid in the proper way for them.

     

    [00:37:45]

    Stu: Okay. This one from Mark, he’s a client, “So, when do you suggest that we pay the top-up for newly eligible employees for the two fortnights in August?”

     

    [00:37:56]

    Ed: Good question. I’m not sure on that, Mark. You will…so you’ll be nominating them retrospectively. I don’t believe there’s any guidance out yet, but we’ll have a check and see because we’ll need to know the same thing for ourselves as well, we’ll have a check.

     

    [00:38:15]

    Stu: Okay. This one from Kathy, “At what date can we claim for full-time employees that started between the 1st of March and the 30th of June 2020, from the August 2020 declaration period, question? I do not believe claims can be backdated anywhere.”

     

    [00:38:31]

    Ed: Yeah, it seems a bit odd given that we’re at the end of August and you might be going through the processes we are here of getting the nomination forms completed. So you can’t claim until you’ve got the nomination forms completed. But I think it’ll be pretty much like the first couple of JobKeeper fortnights. And I don’t know if you remember, but the goalposts kind of shifted with that when the government realized that actually, it was really quite hard to get all of your paperwork in order. I suspect that we’ll be able to, and there’ll be some clarification if there isn’t already some. Have a look at the ATO website, that’s the best place to get the clarification from, we’ll be doing the same. And I think you’ll find that in your next pay runs if you’ve got your paperwork sorted out, you can start a claim but there’ll probably be an end date on that as well.

     

    [00:39:19]

    Stu: And Ed, we’ve had this question a number of times over the months but worth revisiting from Mandy, “Hello Ed. We have a valued staff member on JobKeeper, she is casual and would now like to change to permanent part-time. What are the issues I need to consider?”

     

    [00:39:34]

    Ed: Good question. So, she’s on JobKeeper, casual has been regular and systematic, now wants to convert to permanent part-time. So first of all, Mandy, go and check your award. Did Mandy say she’s a client?

     

    [00:39:48]

    Stu: Mandy didn’t say, no.

     

    [00:39:50]

    Ed: Well, if you were a client of ours, call us and get us to do all this for you. But if you are, please do. If you’re not, please do, we’ll help you out as well over there. In the meantime, look at it like this. So, the JobKeeper thing’s a bit of a red herring, you’ve got someone that wants to convert from casual to permanent part-time. So, typically, absent any award or enterprise agreement that has some structure or methodology to this will be a case of varying the terms of the employment agreement. Probably putting in place an employment contract that you might well not have with a casual worker. But be aware of this that there’s this risk with this current permanent casual case because she’s this employee’s on JobKeeper, you’ve already said that they’re regular and systematic. Sounds like you’re gonna drop their pay probably under whichever award it is to reflect permanent part-time, right? It may be that that employee has some problem with that when you get to it. So, you might need to help them understand that that is changing and why it’s changing and communicating with them, and then getting it all in writing so that you don’t have any backwash from that period as casual.

     

    [00:41:05]

    Stu: Okay, another follow-up question from Laura. She’s a client, “My employee had surgery and the hospital requested a COVID test prior to going in, there is no sick leave or annual leave available. Is she entitled to the Paid Pandemic Leave?”

     

    [00:41:18]

    Ed: Hi, Laura, thanks for your business. It depends where the person is, which industry they are, so you’ve got your federal Paid Pandemic Leave essentially, Disaster Payment, whatever it’s called down in Victoria, now Tasmania. So, if you’re in either of those two states, they may well have access to that, by the sound of it, if they’ve exhausted sick leave and so on. I’ve said it on here before that, actually, if someone is self-isolating, they’re not technically sick and aren’t actually entitled sick leave anyway. So there’s a bit of a problem with this government payment in that regard. If they are in Queensland, if you’re in Queensland, Laura, then there is a state support that the employee may be able to get access to. And remember, it’s them getting access, not you as their employer. They need to bring up and ask for access to that, that’s not your obligation to go and get the money for them and pay it to them or anything like that. But if they’re here in New South Wales, the only way that they might, that might be the case if you’re in the aged care industry at all. But otherwise, there’s no Paid Pandemic Leave here.

     

    [00:42:30]

    Stu: This is from Mike, “Should we reconfirm employment contracts at the end of September to reflect current status?”

     

    [00:42:37]

    Ed: I think…great question, Mike. I think that, and it’s actually given me a thought, what you should be doing is doing a sort of if you’re coming off JobKeeper at that stage, it would make sense to do a wash-up communication essentially saying, this is what happened over this period. This is why you were paid this. The JobKeeper has now come to an end. And once we know what this rule about the JobKeeper enabled directions is for people that are no longer on JobKeeper. You can then state as to what’s going to be happening going forward. I wouldn’t do it yet, because we just don’t know what the going forward rules are and maybe you can still keep people’s hours down below a certain level. And if you can, you might want to do that, might need to do that as a business.

     

    [00:43:22]

    Stu: Ed, this interesting one from Andrew, it’s a follow-up question on redundancy, “Everything I have read is that the role becomes redundant. If you have multiple people performing the same role from what I read, understood, we cannot make someone the person, not the role redundant. Am I mistaken or confused or a bit of both?”

     

    [00:43:39]

    Ed: It’s Andrew, I think it was.

     

    [00:43:40]

    Stu: Andrew.

     

    [00:43:41]

    Ed: Yeah. Your understandably confused, Andrew. I think that’s not an unreasonable position to be in. The language in Australia is very complex on this, as you said, it talks about the role of being redundant, not the person. And so, you can read that and think, “Well, right, if I’ve got five people doing the same role then I need one less then the role’s still there, isn’t it?” And the answer is, yes, it is. But that legislation is interpreted in a way that means you can actually reduce it by 20% and get rid of one of the people and keep the other four. The banana skin in that situation is how you select that one. So, the stuff that I was talking about, at the end of the beginning bit of the session, about not picking people because they’re related to you, or they don’t have kids or other things that could cause you unfair dismissal and discrimination problems. You need a fair selection process to go through that to determine which of the five people you’re gonna make redundant following consultation, of course.

     

    [00:44:41]

    Stu: Yeah. A nice 101 from Dan, “Is there a minimum number of hours staff should work to claim the $1,500 of JobKeeper?”

     

    [00:44:51]

    Ed: You know, you said…I’m really worried as soon as you said it’s a 101, it’s a lot of pressure to get this right. So, right now, no, even if you’re stood down to zero hours, you could be JobKeeper-eligible and receive it. What happens under JobKeeper 2.0, Labor’s saying that it should be restricted to reduction of down to 60% of your hours under the JobKeeper enabled directions, is that just for businesses that are not fully under 2.0? No one knows at the moment. Let’s not worry about it until we’ve got a clearer idea.

     

    [00:45:26]

    Stu: Ed, this from Clara, “I have a casual that has been employed with me since the 25th of August last year that is 2019 on a regular roster, can I start paying her JobKeeper as of the 28th of August 2020, or will I need to wait until JobKeeper 2.0?”

     

    [00:45:40]

    Ed: 2.0 but it sounds better to see the eligibility day even on an extended basis on the 1st of July. And you do also need to check the regular and systematic interpretation of that relationship being careful because as I say, don’t just think you’re doing the employee a favor by getting the JobKeeper, it might be helping you. But you’ve also got this risk that exposes you to a suggestion that you actually owe that employee some other benefits as a permanent employee if they’re regular and systematic.

     

    [00:46:10]

    Stu: Interesting one from Felicity, “You mentioned redundancy, but where do small businesses stand with terminating based on performance during COVID? There are many on minimum wages who would prefer to be just paid to sit at home?”

     

    [00:46:23]

    Ed: Yeah, good question Felicity. We’re seeing this a lot where people are saying, “Well, I don’t want people that are just deciding they don’t wanna work anymore and they’re happier sitting at home.” I think there’s a massive simmering problem with this and probably less so for the businesses that can’t work from home, but more so with office-based businesses where people are working from home. And I think that this is where I think you’re gonna see blow-ups in the workplace that right now that the questions that are being asked, to me seem very employee-centric where people are saying, “Would you like to come back to work?” And the answer is quite often “No.” When actually, the proper question is, “I need you to come back to work.” And it’s not a question, it’s a statement and requires you to do so. And we believe that we created a safe working environment. And people started saying no to that and that becomes a performance issue there, Felicity, as you point out, someone that is not coming back despite reasonable management instructions. And you want to go down a performance path with that because that is certainly a way of moving towards a dismissal if the person doesn’t change their view on that. But also, you don’t have the obligation to pay redundancy pay, if that’s what you might be obliged to do, depending on the size of your business and so forth. So, do look at performance issues. You’re still allowed to do performance-based dismissal when someone’s on JobKeeper and it may well be the more cost-effective thing to do than going through a redundancy process. So if you need the person to do the job but they’re just refusing to do it, it’s probably not a redundancy.

     

    [00:48:05]

    Stu: This from Isabella somewhat related, “We have employees in Victoria who has stood down on JobKeeper, our business is deemed an essential service and is able to deliver some services. However, employees have refused to work. What do you recommend?”

     

    [00:48:20]

    Ed: So, similar answer, to be honest. So, as long as you’re complying with your obligation to provide a safe working environment, and those people are refusing notwithstanding that, then you’d be within your rights to challenge them on it and have to go through a disciplinary process. The only complexity really comes into the casual one. So, you’ve got people that might be on JobKeeper as regular and systematic casuals and they might be turning around now and saying, “Well, I don’t want the shifts thanks. I’ll sit here on JobKeeper.” In truth, if they’re saying that, and you believe they can get away with it, then they’re probably not regular and systematic casuals and you shouldn’t be claiming JobKeeper for them and you should be notifying the ATO to say, “Actually, I’ve got this wrong, this person is not regular and systematic.” So, look, there are two pathways there, the disciplinary one is certainly one you can consider.

     

    [00:49:18]

    Stu: One more?

     

    [00:49:19]

    Ed: Sure.

     

    [00:49:20]

    Stu: From Laura, I’m not sure if it’s the same Laura as before, but, “When it comes to redundancy…”

     

    [00:49:24]

    Ed: A bit greedy if it is, very greedy if it’s [inaudible 000:49:27].

     

    [00:49:28]

    Stu: That’s three from Laura. Laura says, “When it comes to redundancy…”

     

    [00:49:31]

    Ed: Maybe we only got one viewer.

     

    [00:49:34]

    Stu: With quite a few zeros after that one.

     

    [00:49:37]

    Ed: Okay. Okay.

     

    [00:49:38]

    Stu: Laura says, “When it comes to redundancy, I have some employees on awards and some award-free employees, do I need to treat them differently?”

     

    [00:49: 46]

    Ed: It depends, Laura, on what the award says. The first question would be looking at the size of your business as well and then looking at the award in order to determine whether they are eligible for redundancy. It would be unusual to be making, let’s say, you have two employees doing the same role and they would logically both be award-covered. So, it’d be unusual that they should be treated differently in the same role. But check the award. Obviously, have a look at the size of business. And I do have to say and probably worth saying that if you’re trying to do a redundancy process without professional guidance, it’s pretty tough. They’re very tricky things. So, I’d recommend you get some support on that.

     

    [00:50:31]

    Stu: And Ed, just to wrap it up, apropos of your chat before about relationships. This from Peter, he says, “Ed, my business employee is my mother in law, any advice on how I can make her redundant first or redeploy her overseas somewhere far away? Surely there are some special provisions for this situation? Thoughts.”

     

    [00:50:50]

    Ed: It’s a very good question. I don’t employ my mother in law. But I’ve wondered the same question myself. And let’s hope she’s not watching. Good. Right. Thank you, everyone. I shall see you next Friday. Thank you.

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