From 28 September 2020, employers who qualified for the first round of JobKeeper payments, but who will not qualify for JobKeeper 2.0 (because they do not meet the required decline in turnover test) will need to meet specified requirements before they are permitted to issue JobKeeper-enabling directions to employees.

The changes allow employers who previously qualified to receive JobKeeper subsidies under the first version of the scheme (legacy employers) to continue to issue JobKeeper-enabling directions to eligible employees even if the business does not qualify for JobKeeper 2.0.  These include standing down employees, directing employees to perform alternate duties, perform work at an alternate location and change days and times of work.

The changes that will impact these employers under the extended FW Act amendments from 28 September 2020 include:

  • Employers must be able to demonstrate a 10% decline or more in turnover in relevant quarters in 2020 compared to last year to access the flexibility provisions.
  • 10% decline in turnover certificate issued by a financial services provider must be held that confirms the employer satisfies the 10% decline in turnover test.
  • If the employer is a small business with less than 15 employees a self-certified document (whereby the employer makes his/her own statement that the employer satisfies the 10% decline in turnover test) must be held. Alternatively, a Statutory Declaration can also be completed.
  • Employers cannot issue JobKeeper-enabling stand down directions to:
    • reduce an employee’s hours of work below 60% of the employee’s ordinary hours of work as at 1 March 2020; or
    • require an employee to work less than two hours in a day.
  • Employees must be given 7 days written notice of any reduction in hours, or a lesser notice period where genuinely agreed, compared to the three-day notice period previously required.

Employees are also able to appoint a representative during consultation about the direction and employers must keep a written record of the consultation.

Where an employer fails to meet the 10% decline in turnover test and contravenes the proposed legislation by issuing a JobKeeper-enabling direction, penalties of up to $13,200 for individuals and $66,600 for body corporates may be imposed. These penalties may also apply where employees are not notified that a JobKeeper-enabling direction or agreement is continuing or will end during a quarter.

Employers must be aware that a JobKeeper-enabling directions may be considered unreasonable if there is an impact on an employee’s caring responsibilities.

To use the JobKeeper provisions in a particular quarter, small business legacy employers need to have a statutory declaration before the start of that quarter.

 Satisfying the 10% decline in turnover test each quarter

Legacy employers will need to satisfy the 10% decline in turnover test and have a certificate (or statutory declaration) for each relevant quarter.  If they don’t, all JobKeeper enabling directions or agreements will automatically end on:

  • 28 October 2020, if the above conditions aren’t met for the September 2020 quarter
  • 28 February 2021, if the above conditions aren’t met for the December 2020 quarter