Holding Redlich examines the workplace schemes the Federal Government has introduced to assist businesses dealing with the impact of the pandemic.
Across the crane industry, all businesses have felt the impact of the COVID-19 pandemic, not least of which are the challenges, managing workforce, industrial and safety issues.
What is the JobKeeper Scheme?
Early in April, the Federal Government introduced significant changes to the Fair Work Act 2009 (Cth) (FW Act) as part of its JobKeeper Scheme (the Scheme), in particular by introducing a fortnight wage subsidy of $1,500 gross paid to eligible employers in order to keep eligible employees employed with the business.
To be an eligible employer, the employer had to demonstrate a decline in actual or predicted revenue, in most cases of 30%. All employees could then be nominated to receive the subsidy so long as they were full-time, part-time or long term casuals for a period of 12 months before 1 March 2020, including those stood down or rehired. Each fortnight, the employer must pay employees at least $1,500 and, in the case of those earning more before the Scheme was introduced, the employer could top up the difference if they wished.
Excluded employee issues
The Scheme prevents an employer picking or choosing who to nominate – it’s ‘one in, all in’. If the employee was eligible at the time the employer applied for the Scheme, then they were required to be nominated. This caused some issues as employers moved to terminate employment of workers before applying for the scheme, opening potential avenues for claims to be made for unfair dismissal or discrimination.
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Separately, some employees were excluded from the Scheme by the rules themselves, most notably those on temporary visas such as students or short term work visas. At this stage, there does not appear to be any indication that the Scheme will be extended to include those workers, even with an apparent $60 billion being available. As such, employers may face the challenge of how to manage any workers who do not qualify for the Scheme.
Young workers have also been impacted. Originally, they were included in the Scheme, but in April the eligibility rules changed so as to exclude 16 and 17 year old full time students who were not financially independent. If, like a lot of businesses, you made a payment to a 16 or 17 year old employee before 24 April 2020 assuming they were covered by the Scheme, that payment will still be subsidised by the Scheme. You should also check whether a worker may qualify if they turn 18 during the balance of the Scheme.
Managing hours of work during the pandemic
Given the economic uncertainty, many employers are looking at how they can vary hours of work to meet changes in demand. There are different options available depending on whether you are part of the Scheme.
1) If you are not part of the Scheme:
Before you can vary hours of work of an employee, an agreement must be made with the employee. In doing so, it is important to first consult with each employee and discuss the reason for the change and seek each employee’s views and agreement on the arrangement. The Mobile Crane Hiring Award 2010 (Award) imposes notice and consultation obligations at clauses 8 and 8A. When you increase hours of work, you must ensure that the employees are paid pursuant to the terms of the contract and any applicable modern awards, especially overtime.
2) If you are part of the Scheme:
Your business can issue JobKeeper enabling stand down directions if you are part of the Scheme and the worker cannot be usefully employed for their normal days or hours because of changes to business attributable to the pandemic.
The JobKeeper enabling stand down direction includes directing an employee:
Not to work on a day or days on which an employee would ordinarily work;
To work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or
To work a reduced number of hours (compared with the employee’s ordinary hours of work), which may be reduce to zero.
Importantly, there is no right available under the Scheme to increase the hours of work of employees. Any increase of hours will need to be done by agreement and there is no obligation for any worker to take on more hours to “match” the $1,500 JobKeeper payment. However, unlike a request to work more hours, the Scheme also allows employers to request an employee to take paid annual leave and an employee must not unreasonably refuse to the request.
What are my options if there is downturn in business?
If there is downturn in business, you may want to reduce hours of work as outlined above. Other options that may support temporary reduction of labour costs include reaching an agreement with employees to take paid or unpaid leave. However, you cannot direct employees to take paid leave unless there is a “close-down” under clause 25.5 of the Award or if employee has excessive accrued annual leave in accordance with clauses 25.8 and 25.9 of the Award.
If you no longer require the employee’s role to be performed by anyone because of changes in the operational requirements, you may also consider terminating employment by making the role redundant. This is the most straight forward approach to respond to a downturn in business. This approach may be taken after all other options to retain the employee have been exhausted but note that the Award has generous redundancy terms at clause 12.
Managing employees refusing to work
Some employers who are receiving JobKeeper payments for employees are facing the situation where eligible employees, especially casual employees, are refusing to work but still wanting to receive the JobKeeper payments. The short answer to whether you need to continue passing on the JobKeeper payments to such employees is – yes. But what other options do you have?
You should always seek legal advice before taking action, but a few options you can consider include:
Issue a broad communication to employees regarding expectations of employees during the Scheme period, including casuals. On the basis that employees have declared that they are “regular and systematic” on their nomination forms, you could assert that you can require the employees to work their regular hours of work while they receive the JobKeeper.
Treat this as a disciplinary issue (insubordination) – issue warnings to employees who are regularly refusing work without any reasonable excuse. If an employee fails to make themselves available to undertake their role and to perform the inherent duties and responsibilities of their role, the employee may be subject to disciplinary action, in the normal course.
Consider whether you require employees to work fixed shifts on a more permanent or short term basis. You could consider whether to offer certain employees part-time or full-time roles, on a short term or ongoing basis. This would be a variation to employment. You might be inclined to select employees for these part-time / full-time roles based on performance criteria. You may determine that other casual roles are no longer required in the restructure which may lead to redundancies – for instance of casuals who are irregular or unreliable.
If you need to deal with disciplinary action or termination process, you must make sure the process is procedurally fair to avoid any risk of unfair dismissal claims. If in doubt, contact CICA-Assist.
Authors: Michael Selinger, Partner, Holding Redlich; Jamie Kim, Lawyer, Holding Redlich