When extending Part 6-4C of the Fair Work Act (Cth) (FW Act), the government recognised there would be employers who had previously qualified for the JobKeeper scheme, but who would no longer qualify to participate in the scheme following its extension past the end of September 2020.
The Government indicated that these employers, while no longer qualifying for the JobKeeper scheme, might still face economic distress because of the COVID-19 pandemic and still need access to the flexibilities available in Part 6-4C of the FW Act to keep their business running and be able to employ their staff.1
To address this need, a category of employer known as a Legacy Employer was introduced into the extended operation of Part 6-4C of the FW Act.
The recently enacted Fair Work Amendment (JobKeeper Payments) Regulations 2020 amends the Fair Work Regulations 2009 (Cth) (FW Regulations) supporting the extension for Legacy Employers of the temporary workplace flexibility measures in Part 6-4C of the FW Act.2
Who is a Legacy Employer?
Under s789GCB of the FW Act, Legacy Employers are employers who, from 28 September 2020, can use some of the JobKeeper provisions (with some changes) for their previously eligible employees, provided they:
- previously participated in the JobKeeper scheme, but no longer qualify (or choose not to participate) from 28 September 2020; and
- can demonstrate at least a 10% decline in turnover for a relevant quarter, and get a certificate from an eligible financial service provider or make a statutory declaration if they are a small business employer.
10% decline in turnover certificate
Legacy Employers need to meet a 10% decline in turnover test for each relevant quarter. To demonstrate this, they need to get a certificate, or make a statutory declaration if they are a small business employer, for the relevant quarter.
The employer’s eligible financial service provider must issue the written certificate and it must confirm that the employer satisfied the 10% decline in turnover test for the designated quarter applicable to the specified time.
In the case of a small business employer, the statutory declaration must be made by a person authorised by, and with knowledge of the financial affairs of, and it must state their opinion that the employer satisfies the 10% decline in turnover test for the designated quarter. For a small business employer, such a statutory declaration will be taken to be a 10% decline in turnover certificate.
What certificate does a Legacy Employer need, and when?
Legacy Employers need to have a certificate for the relevant quarters before the start of each period, as follows (see s789GCC of the FW Act):
|Period for JobKeeper direction or agreement
||Quarter to meet 10% decline in turnover test
| 28 September to 27 October 2020 (inclusive)
|| June 2020
| 28 October 2020 to 27 February 2021 (inclusive)
|| September 2020
| 28 February to 28 March 2021 (inclusive)
Flexibilities available for Legacy Employers under part 6-4C of the FW Act and FW Regulations
Legacy Employers will be able to give the following JobKeeper enabling directions:
a) JobKeeper enabling stand down direction - FW Act, s 789GJA:
This direction allows a partial stand down on reduced days or hours, provided the direction does not require the legacy employee (Legacy Employee) to work:
- a reduced number of hours that is less than 60% of the Legacy Employee’s ordinary hours of work as at the start of 1 March 2020 (or 60% of the number of ordinary hours of work ascertained in accordance with the FW Regulations for that class of employee); or
- less than two hours in a day.
The FW Regulations provide a method of determining an employee’s ordinary hours for the purposes of this JobKeeper enabling stand down direction, as follows (see s6.07C):
|Class of employee
Ordinary hours of work
|Employees whose ordinary hours of work for the employer have changed on or after 1 March 2020 for reasons (non‑COVID reasons) that are attributable to neither:
- the COVID‑19 pandemic; nor
- government initiatives to slow the transmission of COVID‑19.
|The ordinary hours of work of the employee as most recently changed for non‑COVID reasons, disregarding the effect of any JobKeeper enabling stand down direction applying to the employee.
|Employees not employed by the employer on 1 March 2020.
Disregarding the effect of any JobKeeper enabling stand down direction applying to the employee, either:
- the ordinary hours of work of the employee when the employee started employment with the employer; or
- if those hours of work have changed for non‑COVID reasons—those hours of work as most recently changed for non‑COVID reasons.
For this direction to be lawful, the Legacy Employee cannot be usefully employed for their normal days or hours during the JobKeeper enabling stand down period because of changes to the Legacy Employer’s business attributable to the COVID-19 pandemic or government initiatives to slow its transmission.
The direction has to be implemented safely both generally, and specifically having regard to the nature and spread of COVID-19, and the Legacy Employer must meet the hourly rate of pay guarantee.
b) Direction relating to performing duties of work – FW Act, s 789GJB:
This relates to directions regarding changed duties of work, provided they are safe both generally, and specifically having regard to the nature and spread of COVID-19.
To the extent the duties require a licence or qualification to be performed, the Legacy Employee has to obtain/maintain the required licence or qualification.
The duties must be reasonably within the scope of the Legacy Employer’s business operations.
c) Direction relating to location of work – FW Act, s 789GJC:
The direction has to be limited in scope to a direction to perform duties during a relevant period at a place different from the Legacy Employee’s normal place of work, including the Legacy Employee’s home.
The direction must be limited for work at a place suitable for the Legacy Employee’s duties.
If the place is not the Legacy Employee’s home, it has to be a place that does not require the Legacy Employee to travel an unreasonable distance in all the circumstances, including without limitation, the circumstances surrounding the COVID-19 pandemic.
Also, the direction allowing the performance of the duties at the alternate place needs to be:
- safe generally, and specifically having regard to the nature and spread of COVID-19; and
- reasonably within the scope of the Legacy Employer’s business operations.
Employers have the onus of demonstrating their business meets the relevant turnover requirements to be eligible for the JobKeeper payment.
If in doubt, employers should seek legal advice or speak to us about strategies.