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Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020

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2019-2020

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the

Treasurer, the Hon. Josh Frydenberg MP)

 

 



Table of contents

Glossary............................................................................................................. 1

General outline and financial impact........................................................... 3

Chapter 1 ........... Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020.................................. 7

Chapter 2 ........... JobKeeper-related provisions of the Fair Work Act 2009    13

Chapter 3 ........... Statement of Compatibility with Human Rights.......... 47

 

 



The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

Act

Coronavirus Economic Response Package (Payments and Benefits) Act 2020

Bill

Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020

Coronavirus

Coronavirus known as COVID-19

Coronavirus Omnibus Act

Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020

Fair Work Act

Fair Work Act 2009

FWC

Fair Work Commission

JobKeeper payment

The payment provided under the JobKeeper scheme

JobKeeper Amendment Rules No. 8

Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020

JobKeeper Payment Rules

Coronavirus Economic Response Package (Payments and Benefits) Rules 2020

JobKeeper scheme

The Government-funded wage subsidy scheme administered by the Australian Taxation Commissioner under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and Coronavirus Economic Response Package (Payments and Benefits) Rules 2020

NES

National Employment Standards

ITAA 1997

Income Tax Assessment Act 1997

TAA

Taxation Administration Act 1953

 

 



Schedule 1 - Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits)

Act 2020

This Schedule was prepared by the Treasury.

Schedule 1 to the Bill extends the current time limit on payment rules authorised by the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 . This amendment facilitates the JobKeeper scheme being extended to 28 March 2021.

Schedule 1 also amends the tax secrecy provisions in the TAA to allow protected information relating to the JobKeeper scheme to be disclosed to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus.

Date of effect The amendments in Schedule 1 to the Bill commence from the day of Royal Assent.

Proposal announced The extension to the JobKeeper scheme was announced by the Prime Minister and the Treasurer on 21 July 2020, with further changes announced on 7 August 2020. The changes to the tax secrecy provisions have not been previously announced.

Financial impact The combined effect of the announced changes and the recent economic deterioration in Victoria bring the estimate of JobKeeper payments overall to $101.3 billion.

Human rights implications :  This Schedule does not raise any human rights issues. See Statement of Compatibility with Human Rights — Chapter 3.

Compliance cost impact An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.

Schedule 2 - JobKeeper-related provisions of the Fair Work Act 2009

This Schedule was prepared by the Attorney-General’s Department.

Schedule 2 to the Bill supports the extended operation of the JobKeeper scheme for a further temporary period by providing employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

Part 1 of Schedule 2 extends the operation of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act until 28 March 2021, in line with the extended end date of the JobKeeper scheme. However, the flexibilities in Part 6-4C concerning annual leave will still be repealed at the start of 28 September 2020 per the original repeal date. The preservation of this repeal date for the annual leave provisions is given effect by Part 3 of Schedule 2.

Part 2 of Schedule 2 makes substantive changes to Part 6-4C of the Fair Work Act by creating two broad categories of employers who can access particular flexibilities under the Part in certain circumstances from 28 September 2020:

•        employers who are eligible for JobKeeper payments after

28 September 2020 (qualifying employers); and

•        employers who did receive one or more JobKeeper payments in the period prior to 28 September 2020, but no longer qualify for a payment after 28 September 2020 (legacy employers).

Qualifying employers will retain access to the full range of flexibility measures in Part 6-4C in the extended period of operation of the provisions (with the exception of annual leave provisions being repealed on 28 September 2020).

Legacy employers who have who have a certificate stating they have experienced a 10% decline in turnover will have access to modified flexibility measures from 28 September 2020.

Parts 4 and 5 of Schedule 2 make consequential amendments.

Date of effect :  The extension of the operation of Part 6-4C of the Fair Work Act in Part 1 of Schedule 2 will commence on 27 September 2020, to ensure the original repeal on 28 September 2020 does not occur. This means flexibilities in place (that is, JobKeeper enabling directions or agreements under the existing provisions of Part 6-4C of the Fair Work Act) for qualifying employers will automatically be extended as a consequence.

The substantive amendments to Part 6-4C of the Fair Work Act in Part 2 of Schedule 2 will commence on Royal Assent to allow legacy employers and their employees to put arrangements in place for any new JobKeeper enabling directions or agreements made under the new provisions to be in effect from 28 September 2020.

Part 3 of Schedule 2 commences on 28 September 2020, to ensure the annual leave provisions are still repealed on that day.

Part 4 of Schedule 2 commences on 29 March 2021, immediately after the commencement of Part 2 of Schedule 1 to the Coronavirus Omnibus Act to make changes consequential to the repeal of the substantive JobKeeper flexibilities in the remaining provisions.

Part 5 of Schedule 2 commences at the same time as Part 2 of Schedule 1 to the JobKeeper Amendment Rules No. 8, to make changes consequential to those amendments.

Proposal announced The extension of the Fair Work Act JobKeeper provisions was announced on 21 July 2020.

Financial impact Nil.

Human rights implications :  This Schedule raises human rights issues. See Statement of Compatibility with Human Rights — Chapter 3.

Compliance cost impact An exemption from Regulation Impact Statement requirements was granted by the Prime Minister as there were urgent and unforeseen events.



Outline of chapter

1.1                   Schedule 1 to the Bill extends the period over which the Government can make payments authorised by the Act. This change facilitates the JobKeeper scheme being extended to 28 March 2021.

1.2                   Schedule 1 also amends the tax secrecy provisions in the TAA to allow protected information relating to the JobKeeper scheme to be disclosed to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus.

1.3                   All legislative references in this Chapter are to the Act unless otherwise stated.

Context of amendments

Extension to the JobKeeper scheme

1.4                   On 21 July 2020, the Government announced that the JobKeeper scheme would be extended to 28 March 2021.

1.5                   The JobKeeper scheme is implemented through the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 . Those rules, and the related payments under the JobKeeper scheme, are authorised by the Act, which was enacted to provide financial support to business and not-for-profits directly or indirectly affected by the Coronavirus.

1.6                   In particular, section 7 authorises rules being made in relation to one or more kinds of payments by the Commonwealth in respect of a time that occurs during the ‘prescribed period’, and the establishment of a scheme providing for matters relating to one or more such payments and matters relating to such a scheme. The Treasurer is authorised to make rules prescribing such matters under subsection 20(1).

1.7                   The term ‘prescribed period’ is defined in section 6 as the period between 1 March 2020 and 31 December 2020. This imposes a time limit on any payments made under the Act through the related rules.

Amendments to the tax secrecy provisions

1.8                   Section 355-25 of Schedule 1 to the TAA makes it an offence for a taxation officer to make a record of, or disclose, protected information. Protected information is generally information that relates to the affairs of an entity and identifies, or is reasonably capable of being used to identify, that entity, where that information was disclosed or obtained under or for the purposes of a taxation law.

1.9                   An exception to the offence is contained in section 355-65 of Schedule 1 to the TAA. That section permits a taxation officer to make a disclosure of protected information if an item in a table in the section covers the making of the disclosure.

1.10               Existing circumstances in which disclosure is permitted include disclosures to an Australian government agency that are necessary for the purpose of preventing or lessening a serious threat to an individual’s life, health or safety, or a serious threat to public health or public safety.

Summary of new law

1.11               Schedule 1 to the Bill extends the period over which the Government can make payments authorised by the Act. The extended period will now end on 28 March 2021 instead of 31 December 2020. This change facilitates the JobKeeper scheme being extended to 28 March 2021.

1.12               Schedule 1 to the Bill also extends the circumstances in which protected information can be disclosed. As a result of these changes, a taxation officer is permitted to disclose protected information to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus.

Comparison of key features of new law and current law

New law

Current law

The Commonwealth is authorised to make payments in relation to a time that occurs from 1 March 2020 to 28 March 2021.

The Commonwealth is authorised to make payments in relation to a time that occurs from 1 March 2020 to 31 December 2020.

The circumstances in which a taxation officer can disclose protected information to another entity are extended to include disclosures to an Australian government agency for the purposes of the administration of an Australian law, provided such disclosures are also for a purpose relating to the Coronavirus.

A taxation officer can only disclose protected information to an Australian government agency in certain circumstances, including for the purpose of preventing or lessening a serious threat to an individual’s life, health or safety, or a serious threat to public health or public safety.

Detailed explanation of new law

Extension to the JobKeeper scheme

1.13               The amendments update the definition of ‘prescribed period’ in section 6 so that it ends on 28 March 2021 instead of 31 December 2020. [Schedule 1, item 1, definition of ‘prescribed period’ in section 6]

1.14               As section 7 authorises payments by the Commonwealth in respect of a time that occurs during the ‘prescribed period’, the amendments ensure that such payments can be made in relation to a time that occurs from 1 March 2020 to 28 March 2021 (inclusive).

1.15               The JobKeeper scheme was established through the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 . The amendments facilitate amendments to those rules to extend the operation of the JobKeeper scheme to 28 March 2021.

Amendments to the tax secrecy provisions

1.16               Schedule 1 to the Bill inserts a new item in the table in subsection 355-65(8) of Schedule 1 to the TAA to include additional circumstances in which protected information can be disclosed by a taxation officer without the offence in section 355-25 applying.

1.17               This new item permits disclosures to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus. [Schedule 1, item 4, table item 10A in the table in subsection 355-65(8) of Schedule 1 to the TAA]

1.18               The terms ‘Australian government agency’ and ‘Australian law’ are defined terms in subsection 995-1(1) of the ITAA 1997 and take their meaning from the ITAA 1997 because of subsection 3AA(2(2) of the TAA. An ‘Australian government agency’ includes the Commonwealth, a State or Territory, as well as any of their ‘authorities’. The term ‘Australian law’ means a law of the Commonwealth, a State law or a Territory law.

1.19               These amendments facilitate information sharing at the request of a State or Territory agency, and allow the Commonwealth to further assist State and Territory governments to respond to the ongoing coronavirus pandemic and associated economic impacts of public health measures.

1.20               The requirement that the information be disclosed for the purposes of administering a law ensures that the disclosure is only made for authorised purposes (including a purpose authorised under State law). Such disclosures cannot be made for any purpose - they must be for a purpose that relates to the Coronavirus. This ensures that the new exception is rationally connected and proportionate to the objective of assisting other agencies administer programs relating to the Coronavirus.

1.21               Consistent with other exceptions to the tax secrecy offence in section 355-25, a defendant bears the evidential burden in relation to establishing that the exception applies. The reversal of the burden of proof is consistent with the Attorney-General’s Department’s A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers , September 2011 edition.

1.22               It is appropriate that the evidential burden be reversed in this situation. Matters relating to the disclosure of protected information and for which purposes (such as what information is being disclosed and for what purpose the disclosure is being made) are peculiarly within the knowledge of the person making the disclosure and can be raised in making their defence. It would be significantly more difficult and costly for the prosecution to prove the purpose for which a disclosure is made.

Consequential amendments

1.23               The amendments also extend the period over which the Social Services Minister may make related determinations to modify Part 5 of the Social Security (Administration) Act 1999 . Under the extended period, the Minister can make such determinations in relation to a period ending on 28 March 2021, instead of 31 December 2020. [Schedule 1, item 2, subitem 28(4) of Schedule 2 to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020]

1.24               These determinations allow information to be required to be given to the Department of Social Services for compliance checks in relation to a payment made under the Act (which includes payments made under the JobKeeper scheme).

1.25               It is appropriate that the period in relation to which such determinations can be made be extended to maintain consistency with the period over which the related payments can be made.

1.26               The amendments also update the related automatic sunsetting and repeal provisions for such determinations, and the authorising provision in Schedule 2 to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 . [Schedule 1, item 2, subitem 28(5) of Schedule 2 to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020]

Application and transitional provisions

1.27               The amendments in Schedule 1 to the Bill commence from the day of Royal Assent.

1.28               The amendments to expand the circumstances in which protected information can be disclosed by a taxation officer apply in relation to records and disclosures of information that are made after Schedule 1 commences, whether the information was obtained before, on or after commencement. [Schedule 1, item 5]

 



Outline of chapter

2.1                   Schedule 2 to the Bill supports the extended operation of the JobKeeper scheme by temporarily providing employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

Context of amendments

2.2                   On 9 April 2020, Part 6-4C was inserted into the Fair Work Act. Part 6-4C allows an employer who qualifies for the JobKeeper scheme to temporarily vary the working arrangements (by way of JobKeeper enabling directions or agreements under Part 6-4C) of employees for whom the employer is receiving the JobKeeper payment, subject to a range of safeguards, to respond to the impacts of the Coronavirus pandemic. The intention of Part 6-4C was to support the practical operation of the JobKeeper scheme in Australian workplaces in the national system and keep Australians employed.

2.3                   Part 6-4C is time limited, and was originally set to be repealed on 28 September 2020.

2.4                   Due to the ongoing economic impacts of Coronavirus,

Schedule 1 to the Bill will extend the JobKeeper scheme until

28 March 2021 for employers who satisfy a new decline in turnover test. Consequentially, the existing provisions in the Fair Work Act in Part 6-4C will be extended to support these employers in dealing with the impact of Coronavirus, with the exception of the annual leave provisions.

2.5                   For legacy employers, while they will not qualify for JobKeeper payments after 28 September 2020, many remain in distress and recovering from the impact of Coronavirus. These amendments will extend modified flexibilities to those employers who are still experiencing at least a 10% decline in turnover.

2.6                   The amendments made by Schedule 2 to the Bill are necessary to allow employers and employees to rapidly respond to the dynamic and evolving nature of the impact of Coronavirus on businesses and the economy. Without these amendments, the more rigid terms and conditions under awards and enterprise agreements would apply. Legislative amendment is the only way to deliver rapid, temporary changes across the entirety of the national system to facilitate job-saving workplace arrangements for employers who qualify for the JobKeeper scheme or have previously qualified for the JobKeeper scheme and remain in distress.

Summary of new law

2.7                   Part 1 of Schedule 2 extends the operation of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act until 28 March 2021, in line with the extended end date of the JobKeeper scheme. However, the flexibilities in Part 6-4C concerning annual leave will still be repealed at the start of 28 September 2020 per the original repeal date. The preservation of this repeal date for the annual leave provisions is given effect by Part 3 of Schedule 2.

2.8                   Part 2 of Schedule 2 makes substantive changes to Part 6-4C of the Fair Work Act by creating two broad categories of employers who can access particular flexibilities under the Part in certain circumstances from 28 September 2020:

•        employers who are eligible for JobKeeper payments after 28 September 2020 (qualifying employers); and

•        employers who did receive one or more JobKeeper payments in the period prior to 28 September 2020, but no longer qualify for a payment after 28 September 2020 (legacy employers).

2.9                   Qualifying employers will retain access to the full range of flexibility measures in Part 6-4C in the extended period of operation of the provisions (with the exception of annual leave provisions being repealed on 28 September 2020).

2.10               Legacy employers who have a certificate stating that they have experienced a 10% decline in turnover will have access to modified flexibility measures from 28 September 2020.

2.11               Parts 4 and 5 of Schedule 2 make consequential amendments.

2.12               The existing protections in Part 6-4C of the Fair Work Act will also be extended automatically, including:

•        the existing safeguards in relation to changes to working arrangements under Part 6-4C (including an increased notice period and expanded consultation requirements for JobKeeper enabling directions given by legacy employers);

•        requirements for employers to comply with the employer payment obligations to employees;

•        the right for employees working reduced hours to request to engage in reasonable secondary employment or undertake training or professional development;

•        rules about accrual of service and calculation of benefits; and

•        the FWC’s dispute resolution powers to deal with disputes arising under Part 6-4C, including by arbitration.

Comparison of key features of new law and current law

New law

Current law

Qualifying employers who are entitled to a JobKeeper payment for an employee, and legacy employers who were entitled to a JobKeeper payment for an employee and who have a certificate stating they satisfy a 10% decline in turnover test, can give that employee JobKeeper enabling directions in relation to duties and location of work and can reach agreements with that employee around days and times of work. For legacy employers, such an agreement cannot result in the employee working less than 2 consecutive hours in a day.

Employers who qualify for the JobKeeper payment and are entitled to a payment for an employee can give that employee JobKeeper enabling directions in relation to duties and location of work and can reach agreements with that employee around days and times of work .

Legacy employers who have a certificate stating they satisfy a 10% decline in turnover test can give a JobKeeper enabling stand down direction to an employee for whom they previously received a JobKeeper payment to reduce that employee’s ordinary hours to a minimum of 60% of the employee’s ordinary hours as they were at 1 March 2020, prior to the impact of the Coronavirus pandemic, provided the relevant criteria for issuing the direction are met. Such a direction cannot result in the employee working less than 2 consecutive hours in a day.

No change for qualifying employers - current law continues.

Employers who qualify for the JobKeeper scheme can give a JobKeeper enabling stand down direction to an employee for whom they are entitled to a JobKeeper payment to reduce that employee’s ordinary hours, including to zero, provided the relevant criteria for issuing the direction are met.

Qualifying employers must ensure employees for whom they will receive the JobKeeper payment are paid the fortnightly JobKeeper amount or the amount they earned for work performed, whichever is greater.

Qualifying and legacy employers must continue to meet their ordinary obligations to pay wages in full in accordance with s 323 of the Fair Work Act, including any penalty rates or allowances applicable to hours worked. 

Employers who qualify for the JobKeeper payment must ensure employees for whom they will receive the JobKeeper payment are paid the fortnightly JobKeeper amount or the amount they earned for work performed, whichever is greater.

Employers must continue to meet their ordinary obligations to pay wages in full in accordance with s323 of the Fair Work Act, including any penalty rates or allowances applicable to hours worked.

No change - current law continues.

Employers who have given an employee a JobKeeper enabling direction must ensure that the employee’s base hourly rate of pay is not less than the base hourly rate of pay had the direction not been given.

Current law continues, including in relation to JobKeeper enabling directions or agreements made under Part 6-4C that have effect during the extended period, on or after 28 September 2020. Legacy employers must give a longer period of notice before giving a JobKeeper enabling direction - 7 days rather than 3, and have expanded consultation requirements.

A range of safeguards apply to changes to JobKeeper enabling directions or agreements made under Part 6-4C.

No change - current law continues.

Employees working reduced hours pursuant to a JobKeeper enabling stand down direction can request to engage in reasonable secondary employment, training or professional development.

No change - current law continues.

The FWC can resolve disputes about the operation of Part 6-4C, including by arbitration.

No change - flexibilities relating to annual leave will still be repealed on 28 September 2020.

 

Employers who qualify for the JobKeeper scheme can request employees agree to take annual leave so long as at least two weeks of annual leave remain, and employers and employees can agree to the employee taking annual leave at half pay, until 28 September 2020.

Part 6-4C will be automatically repealed on 29 March 2021 (with the exception that the annual leave provisions will still repeal on 28 September 2020).

Part 6-4C will be automatically repealed on 28 September 2020.

Detailed explanation of new law

Part 1- Extension of the JobKeeper-related provisions of the Fair Work Act 2009

Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020

Item 1 - Subsection 2(1) (table item 3)

2.13               This item amends table item 3 in subsection 2(1) in the Coronavirus Omnibus Act to extend the end date of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act. The original repeal date was the beginning of 28 September 2020, but the new repeal date is now the beginning of 29 March 2021.

•        This has the effect of extending access to the temporary flexibility measures in Part 6-4C (other than in relation to annual leave, see paragraphs 2.116 to 2.121 below) for qualifying employers. JobKeeper enabling directions given by or agreements made with qualifying employers that are in place on 27 September 2020 will automatically carry over from 28 September 2020 if the employer remains eligible to give that direction or make that agreement in those terms.

2.14               This amendment will commence on 27 September 2020.

Part 2- General amendments

2.15               Part 2 of Schedule 2 amends the Fair Work Act to insert new flexibility measures for legacy employers who have a certificate stating that they are experiencing at least a 10% decline in turnover, which mirror, with some modifications, the existing flexibility measures in Part 6-4C (other than in relation to annual leave).

2.16               Part 2 also amends the headings for the existing sections in Part 6-4C providing for JobKeeper enabling directions and agreements regarding days or times of work to make clear that those sections only apply to qualifying employers (not legacy employers).

2.17               The amendments made by this Part will commence the day after Royal Assent.

Fair Work Act 2009

Item 2 - Subsection 539(2) (cell at table item 40, column 1)

Item 3 - Subsection 539(2) (at the end of the cell at table item 40, column 1)

2.18               Section 539 of the Fair Work Act provides for the enforcement of civil remedy provisions by a court. Subsection 539(2) sets out a table of civil remedy provisions in the Fair Work Act, and identifies who has standing to apply for an order, the courts to which an application for an order may be made, and the maximum civil penalty that may be imposed by a court.

2.19               These items amend item 40 of that table in subsection 539(2) by including:

•        subsections 789GJE(3), 789GJE(5), 789GJF(4) and 789GJF(6), which introduce new civil remedy provisions in relation to requirements for legacy employers to notify employees as to whether JobKeeper enabling directions or agreements will cease or continue on the basis of whether the employer has obtained a new certificate that it has satisfied the 10% decline in turnover requirements for the relevant quarter - see paragraphs 2.65 to 2.80 below; and

•        subsections 789GXB(1), 789GXB(2), 789GXB(3) and 789GXC(1), which introduce new civil remedy provisions in relation to the operation of the 10% decline in turnover test and the statutory declarations that may be made for small business employers - see paragraphs 2.105 to 2.111 below.

2.20               A contravention of these subsections can carry a maximum penalty of 60 penalty units for an individual (or 300 penalty units for a body corporate).

2.21               An employee, an employee organisation or a Fair Work Inspector can bring a proceeding alleging a contravention of any of these subsections in a relevant court.

Item 4 - Section 789GA

Item 5 - Section 789GA

Item 6 - Section 789GA

Item 7 - Section 789GA

Item 8 - Section 789GA

2.22               These items make technical amendments to the Guide to

Part 6-4C in section 789GA, to make clear that legacy employers will be able to give JobKeeper enabling stand down directions and JobKeeper enabling directions in relation to duties and location of work and can make agreements about days and times of work, and to enable the Guide to be more easily amended upon the repeal of provisions relating to agreements about annual leave on 28 September 2020.

Item 9 - Section 789GA (note)

2.23               This item omits the note at the end of section 789GA and replaces it with new notes 1 and 2 that make clear that the ability for employers to request that employees agree to take annual leave, and allowing employers and employees to agree to the employee taking annual leave at half pay, will be repealed on 28 September 2020 and the remaining flexibility measures will be repealed on 29 March 2021.

Item 10 - Section 789GC

Item 12 - Section 789GC

2.24               Section 789GC sets out definitions that apply to Part 6-4C. These items add the following new definitions to this section, which are used for the purposes of the new decline in turnover test:

•        10% decline in turnover test certificate - which has the meaning given by section 789GCD.

•        10% decline in turnover test - which means the test set out in new section 789GCB.

•        current GST turnover and decline in turnover test - which have the same meaning as in the JobKeeper Payment Rules. JobKeeper Payment Rules is already defined in section 789GC to mean the rules made under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 .

•        designated quarter applicable to a time has the meaning given by new section 789GCC.

•        eligible financial service provider - which means:

-       a registered company auditor; or

-       a registered tax agent, BAS agent or tax (financial) adviser; or

-       a qualified accountant.

•        qualified accountant - which has the same meaning as in the Corporations Act 2001 .

•        quarter - which means a period of 3 months ending on 31 March, 30 June, 30 September or 31 December.

•        registered company auditor - which means a person registered as an auditor under Part 9.2 of the Corporations Act 2001 .

•        registered tax agent, BAS agent or tax (financial) adviser - which has the same meaning as in the Tax Agent Services Act 2009 .

Item 11 - Section 789GC (definition of JobKeeper enabling direction)

2.25               This item amends the existing definition of JobKeeper enabling direction in section 789GC to make clear that it includes directions given under new sections 789GJA, 789GJB and 789GJC. These new sections deal with JobKeeper enabling directions given by legacy employers.

Item 13 - At the end of Division 1 of Part 6-4C

2.26               This item inserts new sections 789GCB, 789GCC and 789GCD. These provisions set out the content of the 10% decline in turnover test, and the 10% decline in turnover certificate (including an exemption for small business employers, who can instead choose to make a statutory declaration) that legacy employers must have in order to be eligible to give JobKeeper enabling directions or reach agreements under Part 6-4C with effect on or after 28 September 2020.

2.27               The content of new section 789GCB (the 10% decline in turnover test) mirrors the test in the JobKeeper Payment Rules, with necessary modifications for the Fair Work Act context, in particular that the relevant percentage decline required is 10%.

2.28               Section 789GCD sets out what a 10% decline in turnover certificate is. Subsection 789GCD(1) provides that an eligible financial service provider may issue a written certificate that relates to a specified employer, and states that, in the opinion of the eligible financial service provider, the employer satisfied the 10% decline in turnover test for the designated quarter applicable to a specified time. Eligible financial service provider is defined in section 789GC.

2.29               Subsection 789GCD(2) provides that an eligible financial service provider cannot issue a 10% decline in turnover certificate in relation to an employer if the provider is:

•        a director, employee or associated entity of the employer; or

•        a director or employee of an associated entity of the employer.

2.30               This ensures that a 10% decline in turnover certificate can only be issued by a financial service provider that is independent of and external to the employer. ‘Associated entity’ is defined in section 12 of the Fair Work Act and has the meaning given by section 50AAA of the Corporations Act 2001 .

2.31               Subsection 789GCD(4) creates an exception for small business employers to obtain a 10% decline in turnover certificate from an eligible financial service provider. Instead, a small business employer may choose to have a statutory declaration to the effect that the employer satisfied the 10% decline in turnover test for the designated quarter applicable to a specified time. As statutory declarations must be made by an individual, paragraph 789GCD(4)(b) sets out that the declaration may be made by an individual who either is, or is authorised by, the employer, and who has knowledge of the financial affairs of the employer.

•        The term ‘small business employer’ is defined in section 23 of the Fair Work Act, and broadly means an employer with fewer than 15 employees.

2.32               If a small business employer has such a statutory declaration, it is taken to be a 10% decline in turnover certificate that covers the employer for the designated quarter applicable to the time specified in the statutory declaration.

•        This means that wherever the provisions in Part 6-4C refer to a 10% decline in turnover certificate, it includes either a certificate provided by an eligible financial service provider in accordance with subsection 789GCD(1), or, for a small business employer, a statutory declaration made in accordance with subsection 789GDC(4).

•        To be clear, a small business employer can still elect to obtain a written certificate from an eligible financial service provider if they choose.

2.33               The 10% decline in turnover test requires that:

•        after commencement and before 27 October 2020 (inclusive), a legacy employer must have a 10% decline in turnover certificate for the June 2020 quarter (April, May and June 2020) compared to the June 2019 quarter (item 1 of the table set out in section 789GCC);

•        between 28 October 2020 and 27 February 2021(inclusive),

a legacy employer must have a 10% decline in turnover certificate for the September 2020 quarter (July, August and September 2020) compared to the September 2019 quarter (item 2 of the table set out in section 789GCC); and

•        between 28 February 2021 and 28 March 2021 (inclusive),

a legacy employer must have a 10% decline in turnover certificate for the December 2020 quarter (October, November and December 2020) compared to the December 2019 quarter (item 3 of the table set out in section 789GCC).

2.34               These dates align with the Business Activity Statement lodgement dates for each completed quarter, rather than with the application of the turnover test for employers to qualify for the JobKeeper scheme under the JobKeeper Payment Rules. This is because legacy employers are no longer part of the JobKeeper payment scheme so those dates are not relevant to them. 

2.35               Legacy employers with a JobKeeper enabling direction or agreement in place must obtain a further 10% decline in turnover certificate for each subsequent quarter, including before 28 October 2020 (in relation to the September quarter) and 28 February 2021 (in relation to the December quarter) - see new sections 789GJE and 789GJF below. If a legacy employer does not obtain the relevant certificate for a quarter, then in the subsequent period:

•        any directions or agreements in place cease to operate on 28 October 2020 or 28 February 2021 (as appropriate) under sections 789GJE or 789GJF, and

•        the employer cannot give new directions or reach new agreements with their employees under Part 6-4 (unless the employer later obtains the required certificate and satisfies all other requirements to re-issue or re-make the direction or agreement).

2.36               This is intended to ensure that the temporary flexibility measures in the Fair Work Act continue to be available only to employers who are experiencing the relevant requisite financial downturn.

2.37               Because the 10% decline in turnover test cross references to provisions in the JobKeeper Payment Rules, it is necessary to include a limited regulation-making power in new subsection 789GCB(2) to ensure the two tests continue to operate harmoniously. This regulation-making power is tightly confined, and can only make modifications to the test if the JobKeeper Payment Rules are amended after the commencement of section 789GCB and the modifications made relate to those amendments.

2.38               Under section 789GV, a dispute could be brought before the FWC about whether an employer holds a 10% decline in turnover certificate for a relevant period, or whether the certificate was issued by an eligible financial service provider, but the FWC cannot otherwise consider the 10% decline in turnover test. The Federal Court can examine whether an employer has satisfied the 10% decline in turnover test, including as part of an application under new sections 789GXD and 789GXE to terminate a JobKeeper enabling direction or agreement on the basis that the 10% decline in turnover test has not been met. Civil penalties may also apply to employers for purporting to give a JobKeeper enabling direction or request to make an agreement about days or times of work if the employer does not meet the 10% decline in turnover test, and knows or is reckless as to that fact (see subsection 789GXB(1) and (2)). Civil penalties may also apply to knowingly giving false or misleading information to an eligible financial service provider (see subsection 789GXB(3), or making a false declaration (see section 789GXC).

Item 14 - Subsection 789GDB(2)

Item 15 - Subsection 789GDB(3)

2.39               Section 789GDB contains the hourly rate of pay guarantee, and ensures that an employee’s base hourly rate of pay cannot be reduced as a result of a JobKeeper enabling stand down direction or a JobKeeper enabling direction concerning duties of work. These items amend section 789GDB to ensure that this guarantee also applies to those types of directions given by legacy employers.

Item 16 - Division 3 of Part 6-4C (at the end of the heading)

Item 17 - Section 789GDC (at the end of the heading)

Item 18 - Division 4 of Part 6-4C (at the end of the heading)

Item 19 - Section 789GE (at the end of the heading)

Item 20 - Section 789GF (at the end of the heading)

Item 21 - Section 789GG (at the end of the heading)

2.40               These items add the words “—employer currently entitled to JobKeeper payment for employee” at the end of the headings to Divisions 3 and 4 and sections 789GDC to 789GG (inclusive). This is intended to make clear that the existing provisions in these Divisions of Part 6-4C apply to qualifying employers and allow qualifying employers to more easily locate the specific provisions that can apply to them.

Item 22 - Before Division 6 of Part 6-4C

Division 5A - Flexibility provisions relating to employers previously entitled to JobKeeper payment

2.41               This item inserts new Division 5A into Part 6-4C of the Fair Work Act, which provides new flexibility provisions that apply to legacy employers who have the relevant 10% decline in turnover certificate. Each provision is adapted from one of the flexibility provisions in Divisions 3 and 4 that will apply to qualifying employers, with some modifications.

2.42               These provisions will allow eligible legacy employers, subject to meeting the requirements for each provision, to:

•        give employees for whom the employer previously received a JobKeeper payment a:

-       JobKeeper enabling stand down direction (to no less than 60% of the employee’s ordinary hours as at 1 March 2020, before the impact of Coronavirus, and that does not require the employee to work less than 2 consecutive hours in a day),

-       JobKeeper enabling direction regarding duties of work, or

-       JobKeeper enabling direction regarding location of work; and

•        request employees for whom the employer previously received a JobKeeper payment agree to perform their duties on different days or at different times (as long as the agreement does not require the employee to work less than 2 consecutive hours in a day).

2.43               The existing safeguards that apply to each of these types of JobKeeper enabling directions and requests (and resulting agreements) about days or times of work for qualifying employers will also apply to (or have been strengthened for) directions given or requests (and resulting agreements) made by legacy employers in accordance with Division 5A.

Section 789GJA JobKeeper enabling stand down - employer previously entitled to JobKeeper payment for employee

2.44               New section 789GJA allows legacy employers who have the relevant 10% decline in turnover certificate to give JobKeeper enabling stand down directions to employees for whom they previously received a JobKeeper payment. These directions can only take effect for a period beginning on or after 28 September 2020.

2.45               New section 789GJA is adapted from existing section 789GDC, except, importantly, legacy employers cannot reduce an employee’s hours to zero as qualifying employers can. Instead, legacy employers can only reduce an employee’s hours to a minimum of 60% of the employee’s ordinary hours of work, as assessed on 1 March 2020.

•        An employee’s ordinary hours are not the hours the employee did or did not work on 1 March 2020 specifically. Rather, ‘ordinary hours’ is are the quantum of hours the employee is contracted to work, as set out in the employee’s industrial instrument or contract of employment. To be clear, ordinary hours does not include the specific days an employee might normally perform those hours, it is just the number of hours.

•        Ordinary hours is defined in section 20 of the Fair Work Act for award and agreement free employees. For award or agreement covered employees, ordinary hours will be assessed according to the particular terms of the applicable instrument. For example, an employee’s ordinary hours as assessed at 1 March 2020 might be 38 hours per week.

•        This means employees of legacy employers will have a minimum guaranteed threshold of their pre-Coronavirus ordinary hours.

•        Casual employees do not have ‘ordinary hours’ because, by virtue of the nature of casual employment, they are free to accept or refuse work, and their employers are free to offer work or not.

2.46               An additional new requirement set out in paragraph 789GJA(1)(c) requires that the direction does not require the employee to work less than 2 consecutive hours in a day on which the employee performs work.

2.47               A limited regulation-making power has been included at subparagraph 789GJA(1)(b)(ii), which allows regulations to be made providing a way to work out the number of ordinary hours for a particular class of employees for the purposes of determining the 60% minimum threshold of hours where 1 March 2020 may not be the appropriate time to assess this. This regulation-making power is confined to identifying

the employee’s ordinary hours, and cannot be used to reduce the

60% minimum guaranteed threshold of hours or artificially change what an employee’s contracted ordinary hours are.

2.48               The same criteria for issuing a JobKeeper enabling stand down direction under section 789GDC apply to directions issued under section 789GJA. This includes the requirements that:

•        the employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to the Coronavirus pandemic or government initiatives to slow the transmission of Coronavirus; and

•        the direction is safe, having regard to (without limitation) the nature and spread of Coronavirus.

2.49               The existing rules relating to JobKeeper enabling directions set out in Division 6 of Part 6-4C of the Fair Work Act will apply to JobKeeper enabling stand down directions given by legacy employers under section 789GJA, except that the notice period for giving a JobKeeper enabling direction has been increased from three to seven days for legacy employers. Legacy employers will also be required to comply with expanded consultation requirements in new section 789GMA, and the existing requirement for JobKeeper enabling directions to be in writing under section 789GN.

•        Legacy employers with a JobKeeper enabling direction in place must also re-satisfy the 10% decline in turnover test and obtain the relevant 10% decline in turnover certificate for each of the subsequent quarters to have that JobKeeper enabling direction continue in effect through the next period - see section 789GJE. This section also contains employee notification requirements.

2.50               Legacy employers who give a JobKeeper enabling stand down direction are still required to comply with section 323 of the Fair Work Act, which deals with method and frequency of payment, and the minimum hourly rate of pay guarantee in section 789GDB. This means, of course, that employers must comply with their existing obligations to pay employees any penalty rates, loadings or other allowance etc., that apply for the work the employee performs.

Example 2.1 

Matthew works as a receptionist in Nishtha’s gym. He is engaged under the Fitness Industry Award 2010 at Level 3. On 1 March 2020, Matthew was employed as a full time employee. This means that

at the requisite time, his ordinary hours under the Fitness Industry Award 2010 were 38 hours per week.

In late March 2020, Nishtha’s gym closed due to government restrictions aimed at slowing the spread of Coronavirus, and Nishtha consequently qualified for the JobKeeper scheme in relation to Matthew.

When restrictions were eased in June 2020, Nishtha reopened the gym, but for reduced hours. She gave Matthew a JobKeeper enabling stand down direction under section 789GDC of the Fair Work Act reducing his hours from 38 to 15 per week until 27 September 2020.

By 28 September 2020, Nishtha’s business has started to recover financially and will not qualify for the extended JobKeeper payment from this date. The actual GST turnover of Nishtha’s gym in the June 2020 quarter was at least 10% below the business’ actual GST turnover in the June 2019 quarter, and Nishtha has obtained a certificate from an eligible financial service provider to this effect.

Nishtha wants Matthew to continue to work reduced hours because the gym still hasn’t returned to its normal opening times. The existing direction that applies to Matthew cannot continue automatically because Nishtha is a legacy employer. The terms of the existing direction also reduced Matthew’s hours to below 60% of his ordinary hours on 1 March 2020, which is not permitted by legacy employers after 28 September 2020. Nishtha gives Matthew a new JobKeeper enabling stand down direction under section 789GJA, which applies from 28 September 2020 and requires Matthew to work a minimum of 22.8 hours per week (60% of his ordinary hours on 1 March 2020), with at least 2 consecutive hours on each day Matthew works - he works 5 hours on Monday, Tuesday and Wednesday, 7.84 hours on Thursday, and no hours on Friday. Nishtha gives Matthew seven days written notice of her intention to give this direction, consults Matthew about the direction during the seven days prior to making the direction and keeps a written record of this consultation.

The new direction can apply from 28 September 2020 until 27 October 2020. Once the September quarter is complete, Nishtha must obtain a new 10% decline in turnover certificate for the September 2020 quarter. She will need to notify Matthew before 28 October 2020 that the JobKeeper enabling stand down direction will not cease to apply to him on that date. If she does so, the direction can apply until 27 February 2021.

Once the December 2020 quarter is complete, Nishtha must again obtain a new 10% decline in turnover certificate for the December 2020 quarter. She must again notify Matthew before 28 February 2021 that the JobKeeper enabling direction will not cease to apply to him on that date. If she does so, the direction can then continue to apply until the start of 29 March 2021. If in the September or December 2020 quarters the business recovers, and no longer satisfies the 10% decline in turnover test (and can therefore not get the certificate), Nishtha will not be eligible to give her employees a JobKeeper enabling direction for the subsequent period (see new section 789GJE below). She would need to notify Matthew before 28 October 2020 (if the gym no longer satisfies the 10% decline in turnover test for the September 2020 quarter) or before 28 February (if the gym no longer satisfies the test for the December 2020 quarter) that the JobKeeper enabling direction will cease to apply to him on that date (whichever applies).

Matthew’s base rate of pay under the Fitness Industry Award 2010 is $21.54 per hour, which cannot be reduced for his hours of work, regardless of the actual number of hours he works.

789GJB Duties of work - employer previously entitled to JobKeeper payment for employee

2.51               New section 789GJB allows legacy employers who obtain the relevant 10% decline in turnover certificate to give JobKeeper enabling directions in relation to duties of work to employees for whom they previously received a JobKeeper payment. These directions can only take effect for a period beginning on or after 28 September 2020.

2.52               New section 789GJB is adapted from existing section 789GE.

2.53               The same criteria for issuing a JobKeeper enabling direction in relation to duties of work under section 789GE apply to directions issued under section 789GJB. This includes the requirements that:

•        the new duties are safe, having regard to the nature and spread of Coronavirus;

•        the employee has any required licence or qualification for the duties; and

•        the duties are reasonably within the scope of the employer’s business operations.

2.54               The existing rules relating to JobKeeper enabling directions set out in Division 6 of Part 6-4C of the Fair Work Act will apply to JobKeeper enabling directions relating to duties of work given by legacy employers under section 789GJB, except thatthe notice period for giving a JobKeeper enabling direction has been increased from three to seven days for legacy employers. Legacy employers will be required to comply with the expanded consultation requirements in new section 789GMA, and the requirement for JobKeeper enabling directions to be in writing under section 789GN.

•        Legacy employers with a JobKeeper enabling direction in place must also re-satisfy the 10% decline in turnover test and obtain the relevant 10% decline in turnover certificate for each of the subsequent quarters to have that JobKeeper enabling direction continue in effect through the next period - see section 789GJE. This section also contains employee notification requirements.

789GJC Location of work - employer previously entitled to JobKeeper payment for employee

2.55               New section 789GJC allows legacy employers who obtain the relevant 10% decline in turnover certificate to give JobKeeper enabling directions in relation to location of work to employees for whom they previously received a JobKeeper payment. These directions can only take effect for a period beginning on or after 28 September 2020.

2.56               New section 789GJC is adapted from existing section 789GF.

2.57               The same criteria for issuing a JobKeeper enabling direction in relation to location of work under section 789GF apply to directions issued under section 789GJC. This includes the requirements that:

•        the location is suitable for the employee’s duties;

•        if the new location is not the employee’s home - the place does not require the employee to travel a distance that is unreasonable in all the circumstances, including the circumstances surrounding the Coronavirus pandemic;

•        the performance of the employee’s duties at the location is safe, having regard to the nature and spread of Coronavirus; and

•        the performance of the employee’s duties at the location is reasonably within the scope of the employer’s business operations.

2.58               The existing rules relating to JobKeeper enabling directions set out in Division 6 of Part 6-4C of the Fair Work Act will apply to JobKeeper enabling directions relating to location of work given by legacy employers under section 789GJC, except that the notice period for giving a JobKeeper enabling direction has been increased from three to seven days for legacy employers. Legacy employers will be required to comply with the expanded and consultation requirements in new section 789GMA, and the existing requirement for JobKeeper enabling directions to be in writing under section 789GN.

•        Legacy employers with a JobKeeper enabling direction in place must also re-satisfy the 10% decline in turnover test and obtain the relevant 10% decline in turnover certificate for each of the subsequent quarters to have that JobKeeper enabling direction continue in effect through the next period - see section 789GJE. This section also contains employee notification requirements.

789GJD Days of work etc. - employer previously entitled to JobKeeper payment for employee

2.59               New section 789GJD allows legacy employers who obtain the relevant 10% decline in turnover certificate to request that an employee agree to work on different days or times compared with their ordinary days or times of work. These requests can only be made to employees for whom the employer previously received the JobKeeper payment, and any resulting agreement can only take effect for a period beginning on or after 28 September 2020.

2.60               New section 789GJD is adapted from existing section 789GG.

2.61               Employees must consider the employer’s request and must not unreasonably refuse it.

2.62               The same criteria for making a request under section 789GG applies to requests made under section 789GJD. This includes the requirements that:

•        performance of the employee’s duties at the new day or time is safe, having regard to the nature and spread of Coronavirus and reasonably within the scope of the employer’s business operations; and

•        the agreement does not have the effect of reducing the employee’s number of hours of work compared to the employee’s ordinary hours of work.

2.63               In addition, paragraph 789GJD(2)(d) provides that the agreement cannot have the effect of requiring the employee to work less than 2 consecutive hours in a day that they do work, and of course, employers must comply with their existing obligations to pay employees in full, including any penalty rates, loadings or other allowance etc., that apply for the work the employee performs.

2.64               Legacy employers with an agreement under section 789GJD in place must also re-satisfy the 10% decline in turnover test and obtain the relevant 10% decline in turnover certificate for each of the subsequent quarters to have that agreement continue in effect through the next period - see section 789GJF. This section also contains employee notification requirements.

789GJE Termination of direction if employer ceases to satisfy the

10% decline in turnover test

2.65               This item inserts new section 789GJE, which automatically terminates a legacy employer’s JobKeeper enabling direction made under sections 789GJA, 789GJB or 789GJC if the employer does not obtain the relevant 10% decline in turnover certificate for the preceding quarter. This section also requires employers to notify employees if the direction ceases to apply as a result of not obtaining the relevant certificate or if it continues to apply as a result of obtaining the relevant certificate.

2.66               Subsection 789GJE(1) specifies that the test time is the start of 28 October 2020, or the start of 28 February 2021 for the purposes of when the direction will cease if the employer does not obtain the relevant certificate.

2.67               Subsection 789GJE(2) provides that if a legacy employer does not hold the relevant 10% decline in turnover certificate that covers the employer for the relevant designated quarter applicable to the test time by the test time, any JobKeeper enabling directions given by that employer cease to have effect immediately after the relevant test time.

2.68               Notes to this subsection assist the reader by making clear that:

•        the designated quarter applicable to the test time that is the start of 28 October 2020 is the quarter ending on 30 September 2020; and

•        the designated quarter applicable to the test time that is the start of 28 February 2021 is the quarter ending on 31 December 2020.

2.69               Subsection 789GJE(3) broadly requires an employer to give written notice to an employee notifying them that any directions that applied to them will cease (because the employer did not obtain the relevant certificate) before the relevant test time).

•        For example, if an employer has given an employee a JobKeeper enabling stand down direction under section 789GJA between 28 September and 27 October 2020, but the employer does not obtain the certificate for the September 2020 quarter before 28 October 2020, that direction will cease at the start of 28 October 2020. The employer must therefore notify the employee in writing before 28 October 2020 that the direction will cease and the date it will cease (i.e. 28 October 2020).

•        Similarly, if an employer has given an employee a JobKeeper enabling stand down direction under section 789GJA between 28 October 2020 and 27 February 2021, but the employer does not obtain the certificate for the December 2020 quarter before 28 February 2021, that direction will cease at the start of 28 February 2021. The employer must therefore notify the employee in writing before 28 February 2021 that the direction will cease and the date it will cease (i.e. 28 February 2021).

2.70               Subsection 789GJE(5) broadly requires an employer to give written notice to an employee notifying them that any directions that applied to them will continue (because the employer did obtain the relevant certificate before the relevant test time).

•        For example, if an employer has given an employee a JobKeeper enabling stand down direction under section 789GJA between 28 September and 27 October 2020, and the employer does obtain the certificate for the September 2020 quarter before 28 October 2020, that direction will continue on and after 28 October 2020. The employer must therefore notify the employee in writing before 28 October 2020 that the direction will continue.

•        Similarly, if an employer has given an employee a JobKeeper enabling stand down direction under section 789GJA between 28 October 2020 and 27 February 2021, and the employer does obtain the certificate for the December 2020 quarter before 28 February 2021, that direction will continue on and after 28 February 2021 (until the provisions repeal at the start of 29 March 2021). The employer must therefore notify the employee in writing before 28 February 2021 that the direction will continue.

2.71               Note 2 to subsection 789GJE(5) reminds the reader that directions may be terminated in other circumstances, as set out in section 789GP. For example, the employer may withdraw, revoke or replace the direction, or it may be terminated at a future date under section 789GJE.

2.72               The notification requirements in subsections 789GJE(3) and (5) are civil penalty provisions. However, subsections 789GJE(4) and (6) provide that the civil penalties will only apply if an employer has contravened the relevant subsection on more than one occasion. To be clear, the contraventions by the employer do not have to be in relation to the same employee, and do not have to occur at the same time.

789GJF Termination of agreement if employer ceases to satisfy the 10% decline in turnover test

2.73               This item inserts new section 789GJF, which automatically terminates a legacy employer’s agreement made under section 789GJD if the employer does not obtain the relevant 10% decline in turnover certificate for the preceding quarter. This section also requires employers to notify employees if the agreement ceases to have effect as a result of not obtaining the relevant certificate or if it continues to have effect as a result of obtaining the relevant certificate.

2.74               Subsection 789GJF(1) specifies that the test time is the start of 28 October 2020, or the start of 28 February 2021 for the purposes of when the agreement will cease if the employer does not obtain the relevant certificate.

2.75               Subsection 789GJF(2) provides that if a legacy employer does not hold the relevant 10% decline in turnover certificate that covers the employer for the relevant designated quarter applicable to the test time by the test time, any agreements given by that employer under section 789GJD cease to have effect immediately after the relevant test time.

2.76               Notes to this subsection assist the reader by making clear that:

•        the designated quarter applicable to the test time that is the start of 28 October 2020 is the quarter ending on 30 September 2020; and

•        the designated quarter applicable to the test time that is the start of 28 February 2021 is the quarter ending on 31 December 2020.

2.77               Subsection 789GJF(3) makes clear that subsection 789GJF(2) does not, by implication, prevent an agreement from being terminated otherwise than under that subsection. For example, an employer and employee may terminate an agreement at any time with each party’s consent.

2.78               Subsection 789GJF(4) broadly requires an employer to give written notice to an employee notifying them that any agreements that applied to them will cease (because the employer did not obtain the relevant certificate).

•        For example, if an employer has made an agreement with an employee under section 789GJD between 28 September and 27 October 2020, but the employer does not obtain the certificate for the September 2020 quarter before 28 October 2020, that agreement will cease at the start of 28 October 2020. The employer must therefore notify the employee in writing before 28 October 2020 that the agreement will cease and the date it will cease (i.e. 28 October 2020).

•        Similarly, if an employer has made an agreement with an employee under section 789GJD between 28 October 2020 and 27 February 2021, but the employer does not obtain the certificate for the December 2020 quarter before 28 February 2021, that agreement will cease at the start of 28 February 2021. The employer must therefore notify the employee in writing before 28 February 2021 that the agreement will cease and the date it will cease (i.e. 28 February 2021).

2.79               Subsection 789GJF(6) broadly requires an employer to give written notice to an employee notifying them that any agreements that applied to them will continue (because the employer did obtain the relevant certificate).

•        For example, if an employer has made an agreement with an employee under section 789GJD between 28 September and 27 October 2020, and the employer does obtain the certificate for the September 2020 quarter before 28 October 2020, that agreement will continue on and after 28 October 2020. The employer must therefore notify the employee in writing before 28 October 2020 that the agreement will continue.

•        Similarly, if an employer has made an agreement with an employee under section 789GJD between 28 October 2020 and 27 February 2021, and the employer does obtain the certificate for the December 2020 quarter before 28 February 2021, that agreement will continue on and after 28 February 2021 (until the provisions repeal at the start of 29 March 2021). The employer must therefore notify the employee in writing before 28 February 2021 that the agreement will continue.

2.80               The notification requirements in subsections 789GJF(4) and (6) are civil penalty provisions. However, subsections 789GJF(5) and (7) provide that the civil penalties will only apply if an employer has contravened the relevant subsection on more than one occasion. To be clear, the contraventions by the employer do not have to be in relation to the same employee, and do not have to occur at the same time.

Item 23 - Section 789GK (note)

Item 24 - At the end of section 789GK

2.81               Existing section 789GK provides that a JobKeeper enabling direction does not apply to an employee if the direction is unreasonable in all the circumstances. An existing note provides that a direction may be unreasonable depending on the impact of the direction on any caring responsibilities of the employee. These items add an additional note to this section which provides that directions which reduce hours given by an employer to a category of employees may be unreasonable if they have an unfair effect on some of those employees compared to others of those employees who are also subject to those directions.

Item 25 - Subsection 789GL(1)

Item 26 - Subsection 789GL(1)

2.82               Subsection 789GL(1) currently provides that a JobKeeper enabling direction about duties or location of work given by an employer who qualifies for the JobKeeper scheme under sections 789GE and 789GF has no effect unless the employer has information before it that leads the employer to reasonably believe that the direction is necessary to continue the employment of one or more employees of the employer. These items amend subsection 789GL(1) to make clear that this also applies to directions about duties and location of work given by legacy employers under the equivalent new sections 789GJB and 789GJC.

Item 26A - Section 789GM (at the end of the heading)

Item 27 - Subsection 789GM(1)

2.83               Existing section 789GM provides for the notice and consultation requirements before an employer can issue a JobKeeper enabling direction. These items add the words “—employer currently entitled to JobKeeper payment for employee” at the end of section 789GM and make clear that this section applies to JobKeeper enabling directions given under sections 789GDC, 789GE or 789GF. This is intended to make clear that this provision applies to qualifying employers and allows qualifying employers to more easily locate the specific notice and consultation provision that can apply to them.

Item 28 - At the end of subsection 789GM(1)

2.84               Under existing paragraph 789GM(1)(c), before giving a direction, the employer must consult the employee or a representative of the employee about the direction. This item adds a new note to remind the reader that an employee organisation (for example, a union) may be a representative of the employee.

Item 29 - After section 789GM

2.85               This item inserts new section 789GMA, which provides for the notice and consultation requirements that apply before a legacy employer can issue a JobKeeper enabling direction.

789GMA Consultation - employee previously entitled to JobKeeper payment for employee

2.86               Subsection 789GMA(1) provides that a JobKeeper enabling direction given by a legacy employer under sections 789GJA, 789GJB or 789GJC does not apply to the employee unless the employer gave the employee written notice of the employer’s intention to give the direction at least seven days before the direction was given, or a lesser period if the employee genuinely agrees, and the employer complied with subsections (4) to (8) (which deal with consultation) during the seven days before giving the direction. The regulations may prescribe a form for the notice (subsection 789GMA(2)).

•        Similar to existing section 789GM(3), if an employer has previously complied with the notice and consultation requirements in this section for a proposed direction, and the employee (or their representative, if any) gave views about that proposed direction and the employer considered those views, the employer does not have to repeat the notice and consultation requirements in this section for the modified proposed direction (see subsection 789GMA(10)). This means, for example, that if a legacy employer has already complied with the notice and consultation requirements in section 789GMA about a proposed new direction under the sections providing for legacy employer directions, and they have modified the proposed direction as a result of employee feedback, they do not have to repeat the requirements.

2.87               This is a longer notice period than applies for qualifying employers under existing section 789GM.

2.88               Subsection 789GMA(3) enables the employee to appoint a representative for the purposes of consultation about a JobKeeper enabling direction. A note at the end of this subsection reminds the reader that an employee organisation may be a representative of the employee.

2.89               Under subsection 789GMA(4), if the employee advises the employer of the identity of the representative, the employer must recognise them. If the employee appoints the representative, and advises the employer of the representative’s identity, after consultation has commenced, the employer has to recognise the representative for the remaining consultation. Recognising the representative may, for example, include accepting communications from the representative on behalf of the employee. The employer does not have to start the consultation process again after a representative has been appointed. This is made clear by the capacity of the employee to appoint the representative ‘during’ the seven day period during which consultation is to occur.

2.90               Subsection 789GMA(5) requires a legacy employer to consult with an employee or their appointed representative (if any) during the seven days prior to giving the JobKeeper enabling direction. The consultation requirements must all be met in those seven days, but are not required to take the full seven days. Under subsection 789GMA(6), the  employer must:

•        provide the employee or their appointed representative (if any) with information about the proposed direction, which may, for example, include any of the following:

-       information about the nature of the direction;

-       information about when the direction is to take effect);

-       information about the expected effects of the direction on the employee (sub paragraphs 789GMA(6)(a)(i)-(ii)); and

•        invite the employee or their appointed representative (if any) to give their views about the impact of the proposed direction on the employee (paragraph 789GMA(6)(b)). This may, for example, include any impact in relation to the employee’s family or caring responsibilities.

2.91               Subsection 789GMA(7) makes clear that the employer is not required to disclose confidential or commercially sensitive information to the employee in the course of consultation.

2.92               During the seven day consultation period prior to giving the direction, the employer must give prompt and genuine consideration to any views given by the employer or their representative (subsection 789GMA(8)).

2.93               Subsection 789GMA(9) is a validating provision. If an employer commences consultation earlier than the seven day period prior to giving the direction, this subsection has the effect of ensuring that consultation is valid. This means that if an employer complies with all substantive consultation requirements, but does some or all of them before the seven day period, this will not invalidate the proposed direction. If an employer does start consultation early, this section also ensures that the employee may appoint a representative early in accordance with subsection 789GMA(3), and that appointment is also valid.

•        As a consequence of the validation of an employer’s consultation actions taken before the seven day period, if the employee (or their representative, if any) gives the employer any views under paragraph 789GMA(6)(b), those views must be given prompt and genuine consideration by the employer in accordance with subsection 789GMA(8).

•        This validating provision only relates to consultation actions the employer takes before the seven day period. It does alter or impact the separate requirement for the employer to give notice to the employee of the proposed direction at least seven days before the direction will be given under subsection 789GMA(1).

2.94               Subsection 789GMA(11) requires an employer to keep a written record of a consultation with the employee or their appointed representative (if any).

Example 2.2 

Meelah works as a retail assistant in Florence’s pet accessories boutique. Florence’s business qualified for the JobKeeper scheme prior to 28 September 2020. Her business is starting to recover so she will not requalify for the extend JobKeeper scheme, though she has still satisfied the 10% decline in turnover test for the June 2020 quarter. Florence has obtained a certificate from an eligible financial service provider to this effect.

Meelah was given a valid JobKeeper enabling stand down direction in April 2020 that will cease at the start of 28 September 2020 (because Florence’s business will no longer qualify for the JobKeeper scheme). 

As a legacy employer, Florence can give Meelah a JobKeeper enabling stand down direction under new section 789GJA. All of the requirements of this section have been met, and Florence wants to give Meelah a new JobKeeper enabling stand down direction on 28 September 2020 with effect from that day.

On 14 September 2020, Florence gives Meelah notice of her intention to give the new direction (more than the statutorily required seven days’ notice).

On 16 September 2020, Florence decides to start consultation. Florence sends Meelah an email in which she sets out information about the proposed new direction, including that it is a JobKeeper enabling stand down direction under section 789GJA that proposes to direct Meelah to work 70% of her ordinary hours as at 1 March 2020. The email states the proposed direction would take effect from 28 September 2020, and sets out a proposal for how Meelah’s normal days and times of work would be reduced to give effect to the fewer hours. The email invites Meelah to give her views on the impact of the proposed JobKeeper enabling stand down direction.

On 18 September 2020, Meelah decides to appoint Sinead, a delegate of her union, to be her representative for the purposes of this consultation. Meelah tells Florence she has appointed Sinead. Florence’s early start to consultation, and Meelah’s appointment of Sinead, is validated by subsection 789GMA(9).

Sinead asks Florence if they can have a phone call to discuss the proposed direction, and they agree on a call on 23 September 2020. During the call, Sinead conveys Meelah’s concern that Florence’s proposal for how Meelah’s normal days and times of work would be reduced will make it harder to arrange care for her young child because she would work shorter shifts each day. Meelah would prefer to work her normal length shifts on fewer days, instead.

On 24 September 2020, Florence considers her full staffing availability and rosters to see whether she can accommodate Meelah’s request, which she determines that she can. Florence emails Sinead and Meelah to tell them this, and sets out the new proposal for Meelah’s reduced hours. Sinead replies noting that Meelah prefers the new proposal, and Florence confirms this arrangement will be reflected in the direction she gives.

Florence does not have to repeat the notice and consultation requirements for the reformulated direction as she has already done this for the original proposal, in accordance with subsection 789GMA(10).

On 26 September 2020, Florence gives Meelah the direction reflecting the agreed days and times Meelah will work, to take effect from 28 September 2020. The effect of this direction can continue until 27 October 2020, pending Florence’s business satisfying the 10% decline in turnover test for the September 2020 quarter, obtaining the necessary 10% decline in turnover certificate and notifying Meelah of the direction continuing (or ceasing if no certificate) after this date.

Item 29A - At the end of subsection 789GP(1)

Item 30 - After paragraph 789GP(2)(a)

Item 30A - At the end of subsection 789GP(2)

Item 31 - Subsection 789GP(3)

2.95               These items amend existing section 789GP, which provides for the duration of JobKeeper enabling directions.

2.96               Item 29A adds a new note to subsection 789GP(1) to remind the reader that JobKeeper enabling directions in place under the current provisions (sections 789GDC, 789GE and 789GF), which will continue in effect for qualifying employers, will automatically cease if the employer is no longer entitled to a JobKeeper payment for the employee to whom the direction applies. For example, if an employer currently has a JobKeeper enabling direction for an employee in place, but from 28 September 2020 they will be a legacy employer, that direction will automatically cease at the start of 28 September 2020.

2.97               The effect of items 30 to 31 is that, under section 789GP, a JobKeeper enabling direction (whether given by a qualifying employer or a legacy employer) continues in effect until:

•        it is withdrawn or revoked by the employer;

•        it is replaced by a new JobKeeper enabling direction given by the employer to the employee under the relevant section;

•        for legacy employers, the direction ceases because the employer did not obtain the relevant 10% decline in turnover certificate for the preceding quarter;

•        for directions given by legacy employers that are in effect at the end of 27 September 2020, the beginning of 28 September 2020;

•        specified by the terms of an order made by the FWC under Division 10 of Part 6-4C or by the Federal Court under section 789GXD (which deals with terminating a JobKeeper enabling direction given by a legacy employer if the employer does not satisfy the 10% decline in turnover test); or

•        at the very latest, the start of 29 March 2021.

2.98               To be clear, a JobKeeper enabling direction given by a qualifying employer that is in effect on 27 September 2020 will automatically continue to operate until 29 March 2021, provided the direction is authorised by Part 6-4C, and it does not otherwise cease, for example because it is withdrawn, revoked or replaced by the employee, or is subject to an order by the FWC.

Item 32 - At the end of section 789GQ

2.99               Section 789GQ provides that an employee who is given a JobKeeper enabling direction by their employer must comply with the direction. This item adds a new legislative note at the end of section 789GQ to remind the reader that the Federal Court has jurisdiction under section 562 of the Fair Work Act in relation to any matter arising under that Act. This would include enforcing compliance with a JobKeeper enabling direction under section 789GQ.

Item 33 - Subsections 789GS(1) and (2)

Item 34 - Paragraph 789GU(a)

2.100           These items ensure that the existing rules in relation to accrual of leave and other entitlements, and requests for secondary employment, training etc. continue to apply to all employees subject to a JobKeeper enabling stand down direction, regardless of whether the direction was given by a qualifying employer or a legacy employer.

Item 35 - Subsections 789GV(5) and (6)

2.101           This item extends the FWC’s power to make orders dealing with a dispute in relation to the operation of Part 6-4C until 28 March 2021 under paragraphs 789GV(4)(a) (to give effect to a JobKeeper enabling direction) or 789GV(4)(c) (set aside a JobKeeper enabling direction and substitute a different JobKeeper enabling direction).

2.102           It also makes clear that an order made by the FWC in relation to a JobKeeper enabling direction ceases to have effect at the start of 29 March 2021.

Item 36 - After paragraph 789GX(d)

2.103           The Minister currently has the power to exclude one or more specified employers from the operation of any or all provisions that authorise a JobKeeper enabling direction given or agreement made by an employer who qualifies for the JobKeeper scheme (that is, sections 789GDC, 789GE to 789GJ inclusive). This might be done in circumstances where (for example) an employer contravenes a civil remedy provision.

2.104           This item extends this power to include JobKeeper enabling directions given and agreements that can be made by legacy employers (that is, directions or agreements under sections 789GJA to 789GJD inclusive).

Item 37 - After section 789GXA

2.105           This item adds:

•        new section 789GXB, which contains three new civil penalties in relation to prohibited conduct concerning the 10% decline in turnover test and the 10% decline in turnover certificate;

•        new section 789GXC, which contains a new civil penalty for knowingly making a false statement in a statutory declaration covered by new subsection 789GCD(3). This section also provides that, other than the new civil penalty, a law of the Commonwealth or a law of a State or Territory does not apply to making a false statement in such a statutory declaration; and

•        new sections 789GXD and 789GXE, which allow the Federal Court to terminate a JobKeeper enabling direction or an agreement in relation to days or times of work made by a legacy employer if the employer does not satisfy the 10% decline in turnover test.

Section 789GXB 10% decline in turnover test—prohibited conduct

2.106            Subsection 789GXB(1) provides that an employer must not purport to give a JobKeeper enabling direction under the new legacy employer directions provisions (sections 789GJA, 789GJB or 789GJC) if, at the time when the direction was given, the employer did not actually satisfy the 10% decline in turnover test for the designated quarter applicable to that time, and the employer knew or was reckless as to whether that test was satisfied. The maximum civil penalty for an individual for a contravention of this subsection is 60 penalty units (or 300 penalty units for a body corporate).

2.107           Subsection 789GXB(2) provides that an employer must not purport to give a request under the new subsection 789GJD(1) if, at the time when the request was given, the employer did not actually satisfy the 10% decline in turnover test for the designated quarter applicable to that time, and the employer knew or was reckless as to whether that test was satisfied. The maximum civil penalty for an individual for a contravention of this subsection is 60 penalty units (or 300 penalty units for a body corporate).

2.108           Subsection 789GXB(3) provides that an employer must not give information to an eligible financial service provider if:

•        the information is given in connection with the issue of a 10% decline in turnover certificate that covers the employer for the designated quarter applicable to a particular time; and

•        the information is false or misleading, or omits any matter or thing without which the information is misleading, and the employer knows that.

2.109           The maximum civil penalty for an individual for a contravention of subsection 789GXB(3) is 60 penalty units (or 300 penalty units for a body corporate).

Section 789GXC False statutory declaration

2.110           Subsection 789GXC(1) provides that a person must not make a false statement in a statutory declaration covered by subsection 789GCD(3) if the person knows that the statement is false. The maximum civil penalty for an individual for a contravention of this subsection is

60 penalty units (or 300 penalty units for a body corporate).

2.111           Subsection 789GXC(2) provides that, other than the new civil penalty in subsection 789GXC(1) and other laws of the Fair Work Act that relate to that civil penalty (for example, section 539, which provides for applications for orders in relation to contraventions to civil remedy provisions), laws of the Commonwealth and laws of a State or Territory do not apply to making a false statement in a statutory declaration covered by subsection 789GCD( 4). For example, the criminal offence in section 11 of the Statutory Declarations Act 1959 will not apply to a declaration covered by subsection 789GCD(4).

Section 789GXD Federal Court may terminate a JobKeeper enabling direction if the employer does not satisfy the 10% decline in turnover test

2.112            Section 789GXD enables the Federal Court to make an order terminating a JobKeeper enabling direction given by a legacy employer under section 789GJA, 789GJB or 789GJC (or any other order the court considers appropriate) if the court is satisfied that the employer did not satisfy the 10% decline in turnover test for the designated quarter applicable to the time at which the direction was given. The Federal Court can make the order on application by an employee, an employee organisation or a Fair Work Inspector.

Section 789GXE Federal Court may termination a subsection 789GJD(2) agreement if employer does not satisfy the 10% decline in turnover test

2.113           Section 789GXE enables the Federal Court to make an order terminating an agreement made by a legacy employer under section 789GJD(2) in relation to days or times of work (or any other order the court considers appropriate) if the court is satisfied that the employer did not satisfy the 10% decline in turnover test for the designated quarter applicable to the time at which the employer requested the employee agree to the changes. The Federal Court can make the order on application by an employee, an employee organisation or a Fair Work Inspector.

Item 38 - Paragraph 789GY(b)

2.114           Existing paragraph 789GY(b) makes clear, for avoidance of doubt, that an employee agreeing or disagreeing to perform duties on different days or at different times at the request of an employer under existing subsection 789GG(2) is a workplace right within the meaning of Part 3-1 (general protections) of the Fair Work Act. Adverse action cannot be taken against an employee because of the employee’s workplace rights (see sections 340-342). This item adds new subsection 789GJD(2) to this paragraph, which is the equivalent of subsection 789GG(2) for legacy employers and their employees.

2.115           Coercion and false or misleading statements in relation to workplace rights are also prohibited (see sections 343 and 345).

Part 3- Amendments relating to paid annual leave

2.116           This Part amends Part 6-4C of the Fair Work Act to ensure section 789GJ (regarding agreements relating to the taking of paid annual leave) is repealed on 28 September 2020, as initially intended, despite the extension of the other flexibilities in Part 6-4C, and makes necessary consequential changes.

2.117           The amendments made by this Part will commence on 28 September 2020.

Fair Work Act 2009

Item 39 - Section 789GA

Item 40 - Division 5 of Part 6-4C

Item 41 - Subsections 789GS(3) and (4)

Item 42 - Paragraph 789GX(dd)

Item 43 - Paragraph 789GX(e)

Item 44 - Paragraph 789GY(c)

Item 45 - Paragraph 789GY(d)

2.118           These items:

•        remove the reference to requests and agreements in relation to annual leave from the Guide to Part 6-4C in section 789GA;

•        repeal Division 5 of Part 6-4C, which deals with requests and agreements in relation to annual leave;

•        remove references to section 789GJ (which deals with requests and agreements in relation to annual leave) from the Divisions in Part 6-4C that have been extended until the start of 29 March 2021; and

•        add the word ‘repealed’ after each reference to section 789GJ that appears in the provisions in Part 6-4C that will continue to operate, including section 789GS (providing accrual rules for periods to which JobKeeper enabling directions or agreements apply) and section 789GY (which sets out some of the protections of workplace rights under Part 6-4C).

Item 46 - Transitional - paid annual leave

2.119           This item makes clear, for the avoidance of doubt, that if an employee was given a request under repealed subsection 789GJ(1) to take annual leave, the employee is not required to comply with the request to the extent that the request relates to taking paid annual leave after the provision is repealed on 28 September 2020.

2.120           This item also makes clear, for the avoidance of doubt, that any agreement in place between an employer and employee in accordance with section 789GJ in relation to the taking of annual leave ceases to have effect from 28 September 2020. Of course. this only applies to agreements about annual leave made under section 789GJ - any other annual leave arrangements an employee or employer have in place at this time can continue unaffected.

2.121           This item further makes clear, for avoidance of doubt, that from 28 September 2020, an agreement in relation to annual leave made under section 789GJ does not have any effect on:

•        the period for which the employee is to work on a particular day or days;

•        the employee’s hours of work;

•        the employee’s duties; and

•        the times when the employee is to work.

Part 4- Miscellaneous amendments

2.122           This Part makes a number of changes to the Coronavirus Omnibus Act and the Fair Work Act, which are consequential to the changes outlined above.

2.123           The amendments made by this Part will commence immediately after the commencement of Part 2 of Schedule 1 to the Coronavirus Omnibus Act, which will commence on 29 March 2021 as a result of amendments made by Part 1 of Schedule 2 of the Bill.

Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020

Item 47 - Item 9 of Schedule 1

Item 48 - Item 10 of Schedule 1

Item 49 - Item 10 of Schedule 1

Item 50 - Item 10 of Schedule 1

2.124           Item 47 ensures that new Division 5A of Part 6-4C (concerning flexibilities available to legacy employers) is repealed on 29 March 2021, and removes the reference to Division 5 (concerning annual leave), which will already have been repealed. 

2.125           Items 48 to 50 ensure that from 29 March 2021, no further JobKeeper enabling directions can be given and no further agreements can be made under Part 6-4C. Any directions or agreements in place also cease to have effect on that date. This includes directions or agreements made under Division 5A by legacy employers. This means employees’ terms and conditions will revert back to what they were without the JobKeeper enabling direction or agreement in place.

Item 51 - At the end of item 10 of Schedule 1

2.126           This item makes clear, for avoidance of doubt, that from 29 March 2021, a JobKeeper enabling direction or an agreement made under Part 6-4C does not have any effect on:

•        the day or days on which the employee is to work;

•        the period for which the employee is to work on a particular day or days;

•        the employee’s hours of work;

•        the employee’s duties;

•        the place at which the employee is to work; and

•        the times when the employee is to work.

2.127           This further clarifies that an employee’s terms and conditions revert back to what they would be if the direction or agreement had not been given or made from the date of repeal at the latest.

Fair Work Act 2009

Item 52 - Subsections 789GS(1) and (2)

Item 53 - Paragraph 789GY(a)

Item 54 - Paragraph 789GY(b)

Item 55 - Paragraph 789GY(e)

2.128           These items are consequential amendments to the repeal of the flexibility provisions available under Part 6-4C on 29 March 2020.

Part 5- Amendments consequential on the commencement of the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020

2.129           The amendments made by this Part are consequential to, and commence at the same time as, Part 2 of Schedule 1 to the JobKeeper Amendment Rules No. 8, which will commence the day after that instrument is registered. However, these amendments will not commence at all if this instrument does not commence.

Fair Work Act 2009

Item 56 - Section 789GC (definition of qualifies for the JobKeeper scheme)

Item 57 - At the end of Division 1 of Part 6-4C

2.130           These items are a technical consequential amendment, to take account of a proposed modification to the meaning of when an employer ‘qualifies for the JobKeeper scheme’ under the JobKeeper Payment Rules. The JobKeeper Payment Rules currently refer to an employer qualifying for the JobKeeper scheme ‘at a time’. This is proposed to be changed to referring to an employer qualifying for the JobKeeper scheme ‘for a JobKeeper fortnight’. The provisions in Part 6-4C operate on the basis of an employer qualifying for the scheme ‘at a time’. As such, these items make definitional changes only, to ensure that there is consistency between the JobKeeper Payment Rules and Part 6-4C.

Item 58 - Application

2.131           This item makes clear that these technical consequential amendments only apply in relation to a fortnight beginning at or after the commencement of proposed changes to the JobKeeper Payment Rules.

 



Chapter 3          

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Schedule 1: Extending the operation of the Coronavirus Economic Response Package (Payments and Benefits) Act 2020

3.1                   Schedule 1 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

3.2                   Schedule 1 to the Bill extends the period over which the Government can make payments authorised by the Act. The extended period will now end on 28 March 2021 instead of 31 December 2020. This change facilitates the JobKeeper scheme being extended to 28 March 2021.

3.3                   Schedule 1 amends the tax secrecy provisions in the TAA to allow protected information relating to the JobKeeper scheme to be disclosed to an Australian government agency for the purposes of the administration of an Australian law. Such disclosures can only be made for a purpose relating to the Coronavirus.

3.4                   Schedule 1 to the Bill also extends the period in relation to which a related information sharing determination under Schedule 2 to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 can be made.

Human rights implications

3.5                   Schedule 1 to the Bill may engage the following human rights or freedoms:

Right to work

3.6                   The measure engages the right to work in Articles 6 of the International Covenant on Economic, Social and Cultural Rights.

3.7                   Article 6(1) recognises the right to work and obliges States Parties to take appropriate steps to safeguard this right.

3.8                   The JobKeeper scheme that is being extended under these amendments helps to support the viability of Australian businesses by providing a wage subsidy during the economic disruption caused by the Coronavirus pandemic.

3.9                   The measure is compatible with human rights and positively engage the right to work as the JobKeeper scheme is aimed at assisting employers and keeping people in jobs.

Privacy

3.10               Article 17 of the International Covenant on Civil and Political Rights (the ICCPR) provides:

No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.

3.11               The amendments made by Schedule 1 to the Bill are compatible with Article 17 of the International Covenant on Civil and Political Rights as its engagement will neither be unlawful or arbitrary.

3.12               In order for an interference with the right to privacy to be permissible, the interference must:

•        be authorised by law;

•        be for a reason consistent with the International Covenant on Civil and Political Rights; and

•        be reasonable in the particular circumstances.

3.13               The United Nations Human Rights Committee has interpreted the requirement of ‘reasonableness’ to imply that any interference with privacy must be proportional to the end sought and be necessary in the circumstances of any given case.

3.14               The engagement with the prohibition on the interference with privacy is lawful as the amendments authorise the disclosure of information in limited circumstances.

3.15               The amendments are not arbitrary as they are aimed at a legitimate objective and are proportionate and reasonable. The JobKeeper scheme has involved changes to a number of Australian laws and programs administered by Commonwealth, the States and Territories and their agencies. The amendments to the TAA ensure that such agencies can access the information they need to undertake their important functions under an Australian law that relates to the Coronavirus. Disclosure under those amendments are limited to information disclosed for a purpose that relates to both the administration of an Australian law and to the Coronavirus. The amendments extending the period in relation which an information sharing determination can be made ensure that such determinations can continue to require information to be given to the Department of Social Services for compliance checks in relation to payments made under the JobKeeper scheme. Such compliance checks are essential in maintaining the integrity of the social welfare system and the JobKeeper scheme.

Conclusion

3.16               Schedule 1 to the Bill is compatible with human rights. Importantly, Schedule 1 positively engage the right to work as the JobKeeper scheme is aimed at assisting employers and keeping people in jobs for longer.

Schedule 2 - JobKeeper-related provisions of the Fair Work Act 2009

3.17               Schedule 2 to the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

3.18               Schedule 2 to the Bill supports the temporary extended operation of the JobKeeper scheme by providing employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

3.19               Part 1 of Schedule 2 extends the operation of the temporary JobKeeper provisions in Part 6-4C of the Fair Work Act until 28 March 2021, in line with the extended end date of the JobKeeper scheme. However, the flexibilities in Part 6-4C concerning annual leave will still be repealed at the start of 28 September 2020 per the original repeal date. The preservation of this repeal date for the annual leave provisions is given effect by Part 3 of Schedule 2.

3.20               Part 2 of Schedule 2 makes substantive changes to Part 6-4C of the Fair Work Act by creating two broad categories of employers who can access particular flexibilities under the Part in certain circumstances from 28 September 2020:

•        employers who are eligible for JobKeeper payments after 28 September 2020 (qualifying employers); and

•        employers who did receive one or more JobKeeper payments in the period prior to 28 September 2020, but no longer qualify for a payment after 28 September 2020 (legacy employers).

3.21               Qualifying employers will retain access to the full range of flexibility measures in Part 6-4C in the extended period of operation of the provisions (with the exception of annual leave provisions being repealed on 28 September 2020).

3.22               Legacy employers who have a certificate stating they have experienced a 10% decline in turnover will have access to modified flexibility measures from 28 September 2020, allowing these employers (subject to meeting the specific requirements of each provision) to:

•        give employees for whom the employer previously received a JobKeeper payment a:

-       JobKeeper enabling stand down direction (to no less than 60% of the employee’s ordinary hours as at 1 March 2020, before the impact of the Coronavirus and that does not require the employee to work less than 2 consecutive hours in a day that they perform work),

-       JobKeeper enabling direction regarding duties of work, or

-       JobKeeper enabling direction regarding location of work; and

•        request employees for whom the employer previously received a JobKeeper payment perform their duties on different days or at different times, which the employee cannot unreasonably refuse (as long as the agreement does not require the employee to work less than 2 consecutive hours in a day).

3.23               The existing safeguards that apply to each of these types of JobKeeper enabling directions and requests (and resulting agreements) about days or times of work for qualifying employers will also apply to (or have been strengthened for) directions given or requests (and resulting agreements) made by legacy employers in accordance with the new provisions.

3.24               Parts 4 and 5 of Schedule 2 make consequential amendments.

3.25               Other aspects of Part 6-4C that will be automatically extended as a consequence of these amendments include:

•        the existing safeguards in relation to changes to working arrangements under Part 6-4C (including an increased notice period for JobKeeper enabling directions given by legacy employers and expanded consultation requirements);

•        requirements for employers to comply with the employer payment obligations to employees;

•        the right for employees working reduced hours to request to engage in reasonable secondary employment or undertake training or professional development;

•        rules about accrual of service and calculation of benefits; and

•        the FWC’s dispute resolution powers to deal with disputes arising under Part 6-4C, including by arbitration.

3.26               The extension of Part 6-4C will provide qualifying and legacy employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

Human rights implications

3.27               Schedule 2 to the Bill engages the following rights:

•        the right of everyone to social security in Article 9 of the International Covenant on Economic, Social and Cultural Rights, and the right of everyone to an adequate standard of living for an individual and their family, including adequate food, clothing and housing, and the continuous improvement of living conditions in Article 11;

•        the right to work and rights in work including the right to just and favourable conditions of work - Articles 6(1) and 7 of the International Covenant on Economic, Social and Cultural Rights; and

•        the criminal process rights contained in Articles 14 and 15 of the International Covenant on Civil and Political Rights.

The right of everyone to social security and an adequate standard of living

3.28               The objective of facilitating the extension of the JobKeeper payment to employees through employers promotes Articles 9 and 11 of the International Covenant on Economic, Social and Cultural Rights by providing further payment to assist in achieving an adequate standard of living. The pursuit of this objective also promotes human rights by supporting the Convention on the Rights of Persons with Disabilities.

3.29               The measure is compatible with and promotes the right to social security and an adequate standard of living.

Right to work and rights in work

3.30               The measure engages the right to work and rights in work in Articles 6 and 7 of the International Covenant on Economic, Social and Cultural Rights.

3.31               Article 6(1) recognises the right to work and obliges States Parties to take appropriate steps to safeguard this right. The United Nations Committee on Economic, Social and Cultural Rights has stated that the right to work in Article 6(1) of the International Covenant on Economic, Social and Cultural Rights encompasses the need to provide the worker with just and favourable conditions of work.

3.32               Article 7 requires that States Parties recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular, remuneration that provides all workers with fair wages, a decent living and rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays.

3.33               Australia has ratified a range of relevant ILO conventions, including:

•        the Unemployment Convention 1919 (No. 2) , which was adopted with regard to the ‘question of preventing or providing against unemployment’; and

•        the ILO’s Employment Policy Convention 1964 (No.122) (ILO Convention 122), which the ILO considers a ‘priority’ governance convention.

3.34               The extension of Part 6-4C as given effect in Schedule 2 will provide qualifying and legacy employers with continued flexibility to respond to the impacts of the Coronavirus pandemic while also assisting employees to remain in employment and connected to their workplaces.

3.35               Legacy employers will only be able to temporarily alter the working arrangements of their employees if they have a certificate stating they satisfy the 10% decline in turnover test for the preceding quarter, and will only have access to a modified and reduced range of flexibility measures compared to qualifying employers. This is appropriate as these employers are still recovering from a significant financial downturn.

3.36               The existing safeguards will continue to apply in relation to changes to working arrangements made under Part 6-4C for both qualifying and legacy employers and their employees, including:

•        mandatory notice and consultation requirements for JobKeeper enabling directions (including an increased notice period for JobKeeper enabling directions given by legacy employers and expanded consultation requirements);

•        a requirement that JobKeeper enabling directions must not be unreasonable in all of the circumstances;

•        a requirement that JobKeeper enabling stand down directions can only be used when the employee cannot be usefully employed for their normal days or hours because of changes to business attributable to the Coronavirus pandemic or government initiatives to slow the transmission of Coronavirus;

•        a requirement that changes can only be made to an employee’s duties or location of work where the new duties and location are safe and reasonably within the scope of the business’ operations, and where the employer reasonably believes that the direction is necessary to continue the employment of one or more employees;

•        the entitlement for employees subject to a JobKeeper enabling stand down direction to make a request to engage in reasonable secondary employment, or to undertake training or professional development, which the employer cannot unreasonably refuse; and

•        changes to an employee’s days or times of work can only be made by agreement.

3.37               JobKeeper enabling directions or agreements in place on 27 September 2020 can only continue to operate if all the relevant criteria for the particular direction or agreement continue to be satisfied. For example, if a JobKeeper enabling stand down direction is in place on 27 September and the employer is a qualifying employer and the employee now can be usefully employed for their normal days and hours, that direction will not have any effect from the beginning of 28 September 2020. 

3.38               Schedule 2 also maintains the existing dispute resolution mechanism in the FWC, as well as the penalties for those who fail to comply with an FWC order dealing with a dispute, and for employers who knowingly purport to give a JobKeeper enabling direction when they are not authorised to do so. Fair Work Inspectors will also continue to be able to exercise their compliance powers under the Fair Work Act to investigate any suspected contraventions of Part 6-4C.

3.39               The employer payment obligations also continue to apply, including the obligation to satisfy the wage condition in section 789GD, the minimum payment guarantee in section 789GDA and the hourly rate of pay guarantee in section 789GDB.

•        For instance, a qualifying employer must pay an employee in relation to whom they are claiming the JobKeeper payment the greater of the applicable JobKeeper fortnightly amount and the amount that is payable to the employee in relation to the work actually performed during the relevant fortnight (per the obligations in sections 789GD and 789GDA).

•        Both qualifying employers and legacy employers must continue to comply with the hourly rate of pay guarantee which applies when a JobKeeper enabling stand down direction or a JobKeeper enabling direction regarding duties of work is given to an employee.

•        Both qualifying employers and legacy employers also must continue to comply with their existing obligations under section 323 of the Fair Work Act to pay employees in full in relation to the performance of work. This includes any penalty rates, loadings, allowances etc., applicable to the work and hours performed by the employee.

•        Failure to comply with the employer payment obligations attracts a civil penalty of 60 penalty units for an individual and 300 penalty units for a body corporate.

3.40               As is currently the case, giving a JobKeeper enabling direction does not amount to a redundancy, so does not disturb the ongoing employment relationship.

3.41               Retaining the repeal of section 789GJ (regarding annual leave arrangements) as scheduled on 28 September 2020 means that the normal arrangements for the taking of annual leave under the NES, or an applicable award, enterprise agreement or employment contract, will resume from 28 September 2020. 

3.42               Continuing to provide employers with the flexibility to temporarily alter employees’ working arrangements is reasonable, necessary and proportionate in the context of the continued extreme and dynamic economic impact of the Coronavirus pandemic on businesses and the economy. The measures have been extended for a fixed period until 28 March 2021 and are intended to support employers to maximise employee retention, and remain subject to a range of safeguards designed to minimise the impact on employees and the ability of parties to have disputes settled by the FWC. 

3.43               The measure is compatible with and promotes the right to work.

Criminal process rights

3.44               The Parliamentary Joint Committee on Human Rights Practice Note 2 provides that civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the International Covenant on Civil and Political Rights, regardless of the distinction between criminal and civil penalties in domestic law. When a provision imposes a civil penalty, an assessment is required as to whether it amounts to a criminal penalty for the purposes of the International Covenant on Civil and Political Rights.

3.45               Schedule 2 to the Bill extends temporary civil penalty provisions that were inserted on 9 April 2020 by the Coronavirus Omnibus Act. This means civil penalties will continue to apply from 28 September 2020 where:

•        an employer fails to comply with the employer payment obligations in Division 2 of Part 6-4C;

•        a person fails to comply with an FWC order dealing with a dispute about the operation of Part 6-4C;

•        an employer fails to consider or unreasonably refuses a request from an employee who is working reduced hours under a JobKeeper enabling stand down direction for secondary employment or training; or

•        an employer purports to give a JobKeeper enabling direction where they know the direction is not authorised by Part 6-4C.

3.46               The existing maximum civil penalty for contravening these requirements will continue to apply (60 penalty units for an individual and 300 penalty units for a body corporate). A higher penalty will continue to apply to:

•        employers who purport to give a JobKeeper enabling direction where they knew the direction was not authorised by Part 6-4C; and

•        ‘serious contraventions’ (defined in section 557A of the Fair Work Act) of the requirement to satisfy applicable JobKeeper Payment Rules.

3.47               This reflects the more serious nature of these contraventions.

3.48               Schedule 2 to the Bill also creates eight new civil penalty provisions, which relate to:

•        requirements for legacy employers to notify employees as to whether JobKeeper enabling directions or agreements will cease or continue on the basis of whether the employer has obtained a new certificate that it has satisfied the 10% decline in turnover requirements for the relevant quarter; and

•        the operation of the 10% decline in turnover test and the statutory declarations that may be made for small business employers.

3.49                Contravening these requirements attracts a maximum civil penalty of 60 penalty units for an individual and 300 penalty units for a body corporate.

3.50               As is currently the case, these civil penalty provisions create pecuniary penalties in the form of a debt payable to the Commonwealth or other person and do no impose criminal liability or create a possibility of imprisonment.

3.51               These penalties are intended to encourage compliance with the extended flexibility measures in the Fair Work Act, which supports the implementation of a number of Australia’s obligations under international law, and will only apply to a defined class of persons who remain or were previously within the JobKeeper scheme. While the Fair Work Ombudsman has enforcement powers, proceedings may also be brought by an affected employee or employee organisation. These factors all suggest that the civil penalties imposed by the Fair Work Act are civil rather than criminal in nature.

3.52               The severity of the relevant civil penalties should be considered low. They are pecuniary penalties (rather than a more severe punishment like imprisonment) and there is no sanction of imprisonment for non-payment of penalties.

3.53               As the proposed new civil penalties may reasonably be characterised as not being criminal in nature, the specific criminal process guarantees in Articles 14 and 15 will not apply. In any event, however, new civil penalties comply with the requirements of Articles 14 and 15 in that they would not apply retrospectively (Article 15(1)), the normal standard of proof applies (Article 14(2)), and there is no risk of double punishment as there is no comparable criminal penalty (Article 14(7)).

3.54               On this basis, the extended and proposed new penalties should not be considered criminal for the purposes of human rights law. In any event, they continue to comply with requirements of Article 14 and 15 of the International Covenant on Civil and Political Rights.

Conclusion

3.55               Schedule 2 to the Bill is compatible with human rights.