JobKeeper Update – the Good, the Bad and the Ugly

I am sure you have seen all through the news that the JobKeeper legislation was approved by Federal Parliament on Wednesday night. Here is a quick update of what I consider the Good, the Bad and the Ugly out of this.

The Good News – The power to make reasonable directions to your staff

Whilst a lot of commentators have focused on the $1,500 fortnightly JobKeeper payment, they have over looked what I consider the most important part of the legislation.

Prior to the JobKeeper legislation being passed, the various workplace laws gave business owners very little scope to deal with staff, when faced with a sudden drop in revenue. For many, the only option was to terminate their permanent staff as they had no legal basis to change their working conditions.

But, the good (I believe the great) news, is that under the JobKeeper Scheme, you as the business owner, for a short period of time, have some flexibility in your staffing arrangements. And this flexibility can override the existing workplace laws, including the staff members own employment contract!

Providing you meet all the eligibility criteria, you as the business owner can make reasonable directions to your staff:

To work fewer days and / or hours. For example, you could direct the employee to work only 3 days a week.
To change work duties as long as these are safe and within the employee’s skill, competency and qualifications and the work is reasonably within the scope of the employer’s business operations.
To perform those duties at a reasonable place different from their normal place of work.

This is great news for employers as they now can make decisions about their staffing levels without fear of being taken to the Fair Work Commission for breaching workplace law.

The Bad News 1 – Are you Eligible?

The bad news is that to use these powers to provide these directions to your staff, you have to be eligible for the JobKeeper Scheme. But right now, you have no idea whether you are eligible or not.

What the government did with the legislation was to set up the framework of the JobKeeper scheme. But all the day to day details such as eligibility criteria is determined by rules set by the Treasurer. And as far as I can tell, there are no rules issued as yet by the Treasurer.

So right now, you as a business owner, have no legal basis to say you are eligible for the JobKeeper Scheme.

The Bad News 2 – It appears to be a reimbursement scheme

Right now, all indications are that the JobKeeper scheme is a reimbursement scheme and you have to have paid your staff a minimum of $1,500 in each fortnight (with apportioning for monthly pays).

If you have a casual employee who you were paying $500 a fortnight, you need to have paid them a minimum of $1,500 in the fortnight in order to get the JobKeeper reimbursement. If you only paid them $500 and expect to top up once the government pays the money, it appears that this will not be allowed.

I have two concerns here being:

The business owner has to fund the payment to the staff member till they are reimbursed.
What happens if you (or the employee) don’t actually qualify and you have paid your staff member the $1,500 which is higher than what they normally would have received. I can’t see any power to recover this from the employee.

The Ugly News –The first fortnight is just about over

The legislation is in place for 13 fortnights from 30 March 2020 to 27 September 2020.

Today is Thursday 9 March and effectively is the last working day for many businesses for this fortnight, which ends on Sunday 12 April. This is because tomorrow is the Good Friday public holiday, which is followed by the weekend.

Given the requirements to:

Consult with staff;
Give three days written notice to the affected staff; and,
Pay the employee the $1,500 in the fortnight,

there is no way many businesses will have complied with the terms and conditions of the legislation and rules around the JobKeeper Scheme for the fortnight starting 30 March 2020.

So straight away nearly 8% of the possible benefit to many employers and employees is lost. And this is in the most critical period when that connection to the employer can be lost.

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