Australia: Variations to Modern Awards and Introduction of the JobKeeper Scheme in Response to Serious Industry Concerns During the COVID-19 Crisis
Urgent need for action in relation to Australia’s industrial relations system.
The COVID-19 pandemic has impacted the Australian economy in an unprecedented manner and has sparked the urgent need to preserve the ongoing viability of Australian businesses and jobs.
This has seen action both by Australia’s national workplace relations tribunal, the Fair Work Commission (“FWC”) (varying Modern Awards) and by the Federal Government, introducing changes to the national workplace relations legislation, the Fair Work Act 2009 (Cth) (“FW Act”). Neither Modern Awards nor the FW Act contained provisions that allowed sufficient workplace flexibility to deal with the impact of the pandemic.
Overview of Modern Awards and the National Employment Standards (NES)
Under Australian law, a large number of employees are covered by Modern Awards. Modern Awards are instruments made by the FWC under the FW Act, which set out minimum terms and conditions of employment for employees covered by those Awards. The Award provisions are generally in addition to the National Employment Standards (“NES”), the NES being the 10 minimum standards of employment which apply to all employees covered by the national workplace relations system and provided for in the FW Act.
Modern Awards are generally industry-specific or employer-specific. The terms and conditions provided under a Modern Award may not exclude or provide for entitlements that are less than the NES. Further, an employer’s obligations under a Modern Award are a statutory obligation, and therefore employers and employees may not contract out of those entitlements, even in the midst of the altered circumstances brought about by the pandemic. The breach of any term within a Modern Award is a civil remedy provision.
Urgent variation of modern awards by consent application
In response to the urgent need for change, the FWC has, firstly, on application by the parties, introduced variations to some specific Modern Awards, for example, the Hospitality Industry (General) Award 2010 (Hospitality Award), the Clerks – Private Sector Award 2010 (Clerks Award), and the Restaurant Industry Award 2010 (Restaurant Award). The variations provide increased flexibility for employers and employees during the COVID-19 crisis. The Full Bench noted that the consent of the key industrial parties was a central consideration in adopting a truncated hearing process.
The entitlements in the Clerks Award apply to employees in the private sector who are engaged wholly or principally in clerical, payroll, or administrative duties. The variation to the Clerks Award has provided targeted flexibility for both businesses and employees by allowing them to adopt flexible “work from home” arrangements, take leave and reduce work hours.
The entitlements in the Hospitality Award apply to certain employees who are employed in the hospitality industry. The variation to the Hospitality Award allows for increased flexibility in relation to the range of duties employees can be required to perform, work hours, and leave entitlements.
The entitlements in the Restaurant Award apply to certain employees who are employed in the restaurant industry. The variation to the Restaurant Award allows for increased flexibility in relation to the range of duties employees can be required to perform, work hours, leave entitlements, and the length of the period of notice required to be given to employees for a close-down.
Variation of modern awards at the initiative of the FWC
Secondly, the FWC, on 8 April 2020, varied 99 awards by inserting a new Schedule dealing with “Additional measures during the COVID-19 pandemic” under section 157 of the FW Act. These variations were made by the FWC on its own initiative, in order to achieve the objective of Modern Awards, which is to provide a fair and relevant minimum safety net of terms and conditions.
There are two key aspects of the new Schedule. The first aspect of the new Schedule entitles full-time, part-time and casual employees to take two weeks’ unpaid pandemic leave if the employee is required, by government or medical authorities or acting on medical advice, to self-isolate or is otherwise prevented from working by measures taken by the government or medical authorities in response to the COVID-19 pandemic in circumstances where the employee is required to work at premises occupied by their employer. The second aspect of the new Schedule entitles employees to take twice the amount of their annual leave at half pay by agreement with their employer.
Overall, the award variations were aimed at addressing the current “regulatory gap” in the protection that was currently afforded to employees covered by the FW Act, and the impacts of COVID-19 on Australian businesses and employees.
Legislative Changes–JobKeeper Scheme
On 8 April 2020, the Australian Federal Parliament passed the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 (Cth) and the Coronavirus Economic Response Package Omnibus (Payments and Benefits) Act 2020 (Cth), introducing temporary amendments to the FW Act to allow employers to change workplace arrangements and claim “JobKeeper payments” until business conditions improve.
For the next six months, qualifying employers can claim a fortnightly $1,500 JobKeeper payment for each eligible employee who was employed by that employer on 1 March 2020, and who stays employed. In most cases, an employer will qualify where they expect to experience a reduction in turnover of 30% or more in a calendar month or a quarter as against their turnover for the same period in the previous year. The value of the JobKeeper payments must be passed on to employees, who must receive the greater of the JobKeeper amount or normal pay. The JobKeeper payment effectively acts as a wage subsidy for the employer if an employee continues to be an employee (even if stood down or otherwise not able to work as they did prior to the crisis.
Intended to enable employers to retain employees, the FWA amendments allow employers to direct employees to work fewer days or hours or be stood down. Employees can be directed, provided it is not unreasonable, to work changed duties, work at different locations, and to take annual leave.
Employers and employees may agree to change working hours and days, and to take annual leave, including at half pay, as long as the employee’s leave balance does not fall below two weeks.
Noting that there is an hourly rate of pay guarantee, changed working hours, duties or stand downs cannot reduce an employee’s hourly rate.
Under the legislation, there will be an independent review from July 2020, and the legislation automatically ends on 28 September 2020 unless there are further amendments.
Authors: Greg Robertson, Amelia Dowey, Afif Haque and Liz Baradan.
Harmers Workplace Lawyers has a team of employment law specialists readily available to assist you with these and other workplace issues. For more information, please visit www.harmers.com.au.
For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.
