Since March 2020 employers have faced mounting challenges as a result of the COVID-19 pandemic.
As JobKeeper 2.0 has now come to an end (28 March 2021) we thought it timely to address some questions that may arise for employers.
The initial JobKeeper scheme certainly helped with the immediate impact of COVID-19 shutdowns and resulting downturn in business. Once the initial JobKeeper scheme ended, JobKeeper 2.0 was rolled out. There were some significant differences in this scheme compared to the initial program and not all businesses which had qualified for the initial scheme were entitled to receive JobKeeper 2.0 benefits.
What is JobKeeper 2.0?
In response to the ongoing COVID-19 pandemic and impact on business, the Australian government passed legislation to extend the JobKeeper scheme and some of the JobKeeper provisions in the Fair Work Act.
The JobKeeper 2.0 scheme extended over two periods (‘extension periods’), being:
- 28 September 2020 to 3 January 2021, and
- 4 January 2021 to 28 March 2021.
The amount of JobKeeper was reduced from $1,500 per eligible employee per fortnight which is the amount of the initial JobKeeper scheme, to:
- For the period 28 September 2020 to 3 January 2021 – $1,200 per fortnight per eligible employee employed to work 20 hours or more per week. Eligible employees employed to work less than 20 hours per week, the amount was $750 per fortnight.
- For the period 4 January 2021 to 28 March 2021 – $1,000 per fortnight per eligible employee employed to work for 20 hours or more per week. Eligible employees employed to work less than 20 hours per week the amount is $650 per fortnight.
Below we answer some questions that are likely to arise with the end of JobKeeper 2.0.
- Can I keep my employees working the reduced hours now JobKeeper has ended?
The JobKeeper enabling stand down provisions were introduced to allow employers to keep employees working during the pandemic, on reduced hours of work. The Fair Work Act provides that the JobKeeper enabling stand down provisions/directions cease to have effect after 28 March 2021.
Therefore, after 28 March 2021, reducing the hours of work of an employee will be by agreement or some other arrangement such as a restructure (this may trigger redundancy pay which we will address in part 2 of this series of articles).
An employer cannot unilaterally reduce the contract hours of a permanent employee. The hours of work are a term of the employment contract which may only be reduced if both parties to the contract agree.
Where there is no agreement between the employer and employee for the employee to continue to work reduced hours and where the employer cannot return an employee to their pre-pandemic working hours due to a downturn in work, the role is likely redundant.
- What happens to my employees who were issued a JobKeeper enabling stand down direction to work nil hours?
With the end of the JobKeeper stand down provisions, employees should return to their pre-pandemic roles, including working hours from 29 March 2021.
If you are not able to return an employee to their pre-pandemic hours due to a downturn in work, the role is likely to be redundant. If a position is redundant employers must ensure they comply with any consultation provisions in any applicable Award or Enterprise Agreement.
We will address other concerns that may arise with the end of JobKeeper 2.0 in a subsequent article.
If you have any questions about this or any other employment or workplace matter, please contact us on (02) 9058 4930.
Nicole Dunn Mary Saliba
Legal Practitioner Director Legal Practitioner and RMA