Australia: FWC proposes Award Flexibility Schedule and JobKeeper2.0

The Australian Government and the chief industrial tribunal in Australia  has continued to respond to the COVID-19 pandemic by promoting and extending industrial flexibility measures and economic stimulus for affected businesses. Two of the more practical measures reshaping Australia’s industrial relations landscape are the proposed Award Flexibility Schedule and the JobKeeper 2.0 scheme. These measures are intended to provide temporary exemptions to the otherwise highly regulated employment regime in Australia,  as well as graduated economic relief, as various industries re-establish themselves in a restricted COVID-19 economy.

The Award Flexibility Schedule

The Fair Work Commission (“FWC”), Australia’s chief industrial relations tribunal, has published a draft Award Flexibility Schedule (“Draft Schedule”) to promote discussion about appropriate flexibility arrangements to assist industries and employers covered by a Modern Award which have been impacted by the coronavirus pandemic. Relevantly, Modern Awards are industrial instruments that set minimum conditions and pay rates for many Australian employers and employees.

The Draft Schedule is intended to facilitate further workplace flexibility and enable prompt responses to economic challenges by employers while meeting the expectations of employees. Clauses of the Draft Schedule are designed to be tailored to the industry or occupation to which the relevant Modern Award relates.

Small business employers are the businesses most likely to look to the Draft Schedule to meet mutual industrial interests. The following provisions are examples of flexibility potentially enabled by the Draft Schedule:

• Flexibility to work from home while promoting work-life balance;
• Arrangements for employees to take twice as much annual leave at half pay;
• Arrangements to purchase additional leave from their employer;
• Arrangements for full time and part time employees to compress their working week so that they work greater hours over fewer days;
• Employer directions to require an employee to work at a different workplace (including the employee’s home); and
• Employer directions to stagger start and finish times.

The Draft Schedule is currently open for comment, and interested industrial parties are being encouraged to contact the FWC. The Draft Schedule is already receiving praise from employer groups, who are pleased by the additional flexibility proposed.

JobKeeper2.0

On 1 September 2020, the Commonwealth Parliament passed the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 (“JobKeeper2.0”). JobKeeper2.0 amended a suite of legislation, including the Fair Work Act 2009 (“FW Act”), to support the extended operation of the JobKeeper wage subsidy and flexibility scheme to 28 March 2021. The JobKeeper wage subsidy and flexibility scheme was first passed by the Australian Parliament on 30 March 2020, and included temporary amendments to the FW Act to allow eligible employers to change workplace arrangements and claim JobKeeper wage subsidies from the Australian Tax Office until business conditions improved.

From 28 September 2020, employers who remain eligible for JobKeeper payments after that date will retain access to the full range of flexibility measures in part 6-4C of the FW Act with respect to employees for whom they are claiming the payment.

Eligible businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:

• 50% or more for those with an aggregated turnover of more than AUD1 billion;
• 30% or more for those with an aggregated turnover of AUD1 billion or less; or
• 15% or more for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

JobKeeper2.0 is tapered to encourage businesses to graduate towards independent economic recovery in a new environment. Accordingly, the current JobKeeper wage subsidy paid to employees of AUD1,500 per fortnight will drop to AUD1,200 per fortnight under JobKeeper2.0, and will drop again to AUD1,000 from early January 2021.

Under JobKeeper2.0, employers that have previously received the JobKeeper scheme, but no longer qualify after 28 September 2020, are considered legacy employers (“Legacy Employers”).

Legacy Employers will be able to access a modified version of the JobKeeper provisions under part 6-4C of the FW Act in respect of employees for whom they have previously received JobKeeper payments, provided they meet the relevant criteria. To do so, Legacy Employers will have to satisfy a new decline in turnover test by demonstrating a 10% decline in turnover for the June 2020 quarter (being April, May and June 2020) compared to the June 2019 quarter. The employer must also demonstrate a 10% decline in turnover for each subsequent quarter for its JobKeeper scheme to roll over.

Under JobKeeper2.0, an employer must continue to meet their ordinary obligations to pay wages in full in accordance with the FW Act, including any penalty rates or allowances applicable to hours worked.

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.