The JobKeeper wage subsidy scheme ended at midnight on 28 March 2021.
For employers who were receiving the subsidy this has a number of important consequences, some obvious, some less so:
- Employers must now pay employees’ wages without the assistance of the subsidy;
- Any employees who had their hours reduced via a JobKeeper Enabling Stand Down Direction are entitled to return to their previous hours and rates of pay;
- The previous ability to reduce an employee’s hours through a JobKeeper Enabling Stand Down Direction will not be possible going forward – which may pose difficulties to businesses affected by the current lockdowns in Queensland.
Next steps for employers
For some employers who will now struggle to afford to meet employees’ previous wages, they will need to make tough decisions about how they structure their workforce going forward.
With the removal of the ability to issue JobKeeper Enabling Stand Down Directions, employers will generally not be able to reduce a permanent employee’s hours of work without their agreement (unless they are able to rely on pre-existing stand down provisions in the Fair Work Act which allow an employer to completely stand down an employee – but not just reduce hours – if there is no meaningful work they can perform).
Some businesses will be faced with considering reducing their headcount by making employees redundant. If doing so they would be well-advised to carefully consider their obligations to follow a redundancy process to avoid claims in unfair dismissal, and also to consider whether an obligation to pay redundancy pay arises. Employment Innovations has some useful free resources on these matters including the;
If an employee has returned to their pre-JobKeeper hours then any entitlement to redundancy pay or notice will generally be based on their pre-JobKeeper hours and pay.
Where an employee’s hours were reduced by agreement during the period of the JobKeeper scheme (but not through a formal stand down direction) there is no issue in employees agreeing to continue to a reduction of hours. However complicated questions arise where such an employee is now made redundant. For example, should any redundancy pay be based on their current hours or original hours of work? This question will be impacted by what was agreed with the employee at the time of the reduction of hours and advice may well need to be sought.
We recently co-hosted a webinar with Employment Innovations on the risks & key considerations when it comes to redundancy. You can access the recording below:
Related changes to modern awards
The Fair Work Commission has also made an order that the operation of the Schedule Y provisions in the Aged Care Award 2010, the Health Professionals and Support Services Award 2020 and the Nurses Award 2010 should not be extended beyond 29 March 2021.
This previously provided an entitlement to paid pandemic leave to employees in the aged care sector, but was not felt necessary to continue due to the recent improvements in respect of the COVID pandemic.
Schedule X, which was inserted in many awards to provide an entitlement to unpaid pandemic leave and the flexibility to take twice as much annual leave at half pay, has been extended in some modern awards until 31 December 2021.
If you require assistance in relation to any of the matters listed above, please contact us.