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JobKeeper – FED

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The Federal Government has confirmed the JobKeeper extension. The employment stimulus package will continue for a further six months until 28 March 2021.

Amendments

There are some changes to employer eligibility for JobKeeper and to the payment rates. The additional six-months is divided into two periods:

  • 28 September 2020 to 3 January 2021; and
  • 4 January 2021 to 28 March 2021.

Eligible employers will continue to claim a fortnightly payment of $1,500 per eligible employee until 27 September 2020.

Eligible employees will continue to receive a minimum of $1,500 per fortnight before tax from their employer until 27 September 2020.

From 28 September 2020 the payment rates will be reduced.

Eligibility for employers

From 28 September 2020 to 3 January 2021 businesses with turnover of less than $1 billion must experience a decline in turnover of 30% for each of the June and September quarters compared to their equivalent 2019 quarters. The employer must have been in an employment relationship with each eligible employee on 1 March 2020 and needs to confirm that they are currently employed. From 4 January 2021 to 28 March 2021, the December 2020 quarter must also have fallen by the relevant percentage compared to the December 2019 quarter.

JobKeeper payment rates

From 28 September to 3 January 2021 for employees who worked 20 hours or more per week on average in February 2020, employers will receive $1,200 per employee fortnightly. These employees must therefore be paid a minimum of $1,200 fortnightly before tax. For employees who worked less than 20 hours per week on average in February 2020, the employers will receive $750 per employee fortnightly. These employees must therefore be paid a minimum of $750 fortnightly before tax.

From 4 January 2021 to 28 March 2021 the relevant amounts fall from $1,200 to $1,000 and $750 to $650.

More information

The JobKeeper section of the By Lawyers Dealing with COVID-19 Legal Issues – Some practical information commentary has been updated. A link to this helpful resource is available at the top of the matter plan in every By Lawyers guide.

JobKeeper scheme – FED

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Details of the Federal government’s JobKeeper scheme have been added to By Lawyers Dealing with COVID-19 legal issues – Some practical information publication.

JobKeeper payment stimulus package

The purpose of the JobKeeper package is to assist employers to retain their employees and improve the viability of businesses during the COVID-19 pandemic.

Under the scheme, employers will receive $1,500 per employee fortnightly. Employees must be paid a minimum of $1,500 fortnightly before tax. The JobKeeper payment will be available from 30 March 2020 until 27 September 2020.

Employers pay their employees as usual and then get reimbursed by the ATO, monthly in arrears.

The new commentary covers the important aspects of the scheme. These include the eligibility criteria for both employers and employees. There are also answers to frequently asked questions.

A link is provided to the ATO website which sets out how to Enrol for the JobKeeper payment.

New powers for employers under the JobKeeper scheme

The Federal parliament has complemented the JobKeeper scheme by giving new powers to employers covered by the scheme. The Fair Work Act has been amended by the insertion of Part 6-4C that allows an employer to temporarily modify employment terms and conditions, if they are eligible for the JobKeeper scheme. This is referred to as an employer giving a ‘JobKeeper enabling direction’ to a particular employee.

The new powers include options for workforce flexibility and reducing workforce costs. This gives eligible employers the ability to stand down employees or reduce their hours, change the duties they perform, or change their location of work. The amendments also allow an eligible employer to make an agreement with an employee about work days or times, as well as the employee taking annual leave, including at half pay.

Before a JobKeeper direction can be given, employers must meet minimum requirements. For example, employers need to satisfy consultation requirements which includes notifying the employee at least three days before making a JobKeeper enabling direction, or a lesser time by agreement. No forms have been prescribed for this purpose. By Lawyers has provided example content letters, which are available from within the commentary.

These amendments enable the Fair Work Commission to conciliate and arbitrate disputes about a JobKeeper direction or request.

For more information about the JobKeeper scheme refer to Dealing with COVID-19 legal issues – Some practical information, which is available in all By Lawyers guides.

Employment and the Coronavirus – FED

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Many questions arise at the moment about Employment and the Coronavirus. The By Lawyers Employment Law Guide and the 101 Employment Law Answers reference manual located within that publication can assist subscribers to advise their clients, whether employers or employees.

In addition, our author Brad Petley, an accredited specialist in Workplace Relations, has prepared a timely article on the issues that practitioners and their clients need to consider. This article has been added to the By Lawyers Employment Law Guide, under the Reference Materials folder. The text of Mr Petley’s article is reproduced here for general assistance:

Employer obligations

Employers have legal obligations to ensure the health and safety of their employees and contractors, and also to ensure that the health and safety of members of the public is not put at risk from the conduct of their business or undertaking. This includes managing the risk of exposure to and spread of Coronavirus (COVID-19) in the workplace.

Health risks such as Coronavirus need to be carefully and sensitively managed, as they can give rise to a risk of claims of discrimination, unfair treatment and even unfair dismissal.

Therefore, employers should ensure they act fairly and on the basis of reliable and current medical information. Similarly, employers should not permit or encourage their employees to target or treat adversely any particular demographic in the workplace.

There are legal protections against discrimination or adverse action based on race, ethnicity, national origin or impairment – which can include disease or illness.  In an atmosphere of heightened anxiety due to the impact of Coronavirus, it important that employees’ emotions and conduct are managed by clear and open commu­nication from senior manage­ment.

The rapidly changing situation with the Coronavirus pandemic means that many employers will be focused on reducing their labour costs in the current business climate.  To reduce labour costs employers may consider options such as:

  • Asking employees to take their accrued paid leave such as annual leave and long service leave;
  • Implementing stand-downs pursuant to s 524 of the Fair Work Act 2009 (Cth); or
  • Implementing redundancies.

Leave

Under the Fair Work Act full-time and part-time national system employees are entitled to 10 days personal/carer’s leave each year of service. The entitlement accumulates progressively.

Employees who access their accrued personal/carer’s leave due to injury or illness such as Coronavirus, are considered to be temporarily absent from work and, as such, are protected from dismissal because of their illness or injury: see s 352.

That does not mean that an employee on personal/carer’s leave, who is suffering from Coronavirus, cannot be required to obey reasonable and lawful OHS based instructions intended to minimise the risk of the person spreading disease in the workplace.  For example, an employee diagnosed with COVID-19 who disobeyed an instruction not to attend the workplace unless cleared medically would risk disciplinary action.

Stand-down

An employer may stand down an employee during a period in which the employee cannot usefully be employed due to circumstances for which the employer cannot reasonably be held responsible.

The employer does not pay wages for the period of a stand down. This is not a deferment but a pause during the stand-down in the obligation to pay wages.

An employee stood down continues to accrue entitlements to annual leave and personal/carer’s leave under the National Employment Standards, as well as an entitlement to a public holiday that falls on a day the employee would ordinarily work during the stand-down period: see. s 524.

Redundancy

For a redundancy-based dismissal, employees who are dismissed on the grounds of a ‘genuine redundancy’ are not eligible to bring an unfair dismissal application: see s 385(d).

A genuine redundancy occurs where:

  • the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
  • the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

A genuine redundancy does not occur if it would have been reasonable in all the circumstances for the person to be redeployed within:

  • the employer’s enterprise; or
  • the enterprise of an associated entity of the employer.

Dismissal

When interviewing a client who claims to have been dismissed due to the Coronavirus, it is important to ascertain the basis of the client’s belief.

If there is evidence supporting the claim that the virus was the reason for the dismissal, then a claim for unfair dismissal or breach of general protections provisions may be available.

 

– Brad Petley solicitor is the main author of the By Lawyers Employment Law guides. He will continue to update our subscribers regarding Employment and the Coronavirus as circumstances demand.

 

Keep up-to-date with our latest COVID-19 News & Updates

Paid parental leave – Fed

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Employment law – Paid parental leave amendments

The Paid Parental Leave Amendment (Work Test) Act 2019 has made the following changes to the ‘work test’ under the Paid Parental Leave Act 2010:

  1. The insertion of s 33(2A) which provides for the work test period for a pregnant woman in an unsafe job. The period begins 13 months immediately before the woman had to cease work if the cessation was due to the hazards connected with her work posing a risk to the pregnancy; and
  2. The permissible break in the work test period provided for in s 36 has increased from 8 weeks to 12 weeks between two working days.

These amendments commence form 1 January 2020.

The By Lawyers Employment Law commentary has been updated accordingly.

By Lawyers wish everyone a happy and safe festive season.

Employment Law – Domestic violence leave

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From 1 August 2018 all employees under modern awards – full-time, part-time and casual – have an entitlement to 5 days unpaid leave to deal with family or domestic violence issues.

The Fair Work Commission decided in their four-yearly review to add a new model term into all modern awards. The Full Bench concluded that:

…retaining employment is an important pathway out of violent relationships. Conversely, a lack of financial security has an adverse impact on the ability to recover from family and domestic violence. Absent an entitlement to unpaid family and domestic violence leave, employees will be reliant on the goodwill of their employer to obtain the leave necessary to deal with the various issues arising from family and domestic violence while remaining in employment.

The model clause will allow unpaid leave for family or domestic violence reasons which are defined as… violent, threatening or other abusive behaviour by a family member that seeks to coerce or control the employee and that causes them harm or to be fearful.

The unpaid leave may be taken for such reasons as to make safety arrangements for the employee or a family member, to attend court, or to access police services.

Employees are not required to access paid holiday or sick leave first before taking the unpaid domestic violence leave.

The leave is available in full at the start of each 12-month period of the employee’s employment, does not accrue and is available to full-time, part-time and casual employees.

Our Employment Law guide has been updated.

EMPLOYMENT – Tuition reimbursement on termination

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Employers typically deduct from termination monies when an employee terminates after receiving recent employer-funded tuition. Deductions from monies owed is regulated by the Fair Work Act and employers should tread carefully.

Under the Act, employers are required to pay their employees all amounts owing to them in relation to the performance of their work in full. This includes wages, bonuses, loadings, allowances, overtime and leave payments. …

The Act allows for some deductions to be made by employers, but only in four limited circumstances, one being where the deduction is authorised by the employee in writing, and it is principally for the employee’s benefit …

In some cases, deductions for employer paid training courses can be lawful authorised deductions. It will depend on the circumstances of the case but as a general statement, deductions for training course fees are more likely to be considered lawful if the severance of the employee concerned occurs within a short time following the payment of the fee, for example, 6 months or 12 months. Each situation will turn on its facts.

The Standard Individual Employment Agreement and the Executive Employment Agreement precedents have been updated with a clause relating to Refund of tuition expenses by the employee.

 

 

EMPLOYMENT – Reference manual – 101 Employment Answers – Additions

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The By Lawyers Reference Manual – 101 Employment Answers has been updated.

New entries:

Notice and employment ended by abandonment

The question of when an employee can be said to have “abandoned” their employment can be a complex one. The recent Full Bench decision of the Fair Work Commission in Abandonment of Employment [2018] FWCFB 139 [21]–[22], provides excellent guidance.

Unfair dismissal – high income threshold

The high income threshold limits an employee’s eligibility for protection from unfair dismissal … currently $142,000. If an employee is not covered by a modern award, or an enterprise agreement does not apply to them, in order to be able to access the unfair dismissal jurisdiction, the employee must have an annual rate of earnings of less than the high income threshold.

Termination of an employee on a 186 visa

There is no condition on a 186 visa requiring either the employee or employer to maintain employment for the 2 year post visa approval employment period.

Employment Law – 101 Employment Answers – New reference manual

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We are excited to announce that we have significantly enhanced our Employment Law publication by the addition of a new reference manual – 101 Employment Answers.

Sourced from our Mentor service 101 Employment Answers is an extremely useful collection of questions and answers on all aspects of employment law, from various states, on various topics, dealing with the status, rights and obligations of employers, employees and contractors.

101 Employment Answers can be accessed directly from the Employment Law guide within LEAP or from the Employment Law page on the By Lawyers website.

Fair Entitlements Guarantee Rides to the Rescue

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Introduction

Owners of insolvent or potentially insolvent businesses regularly express concern about the effect liquidation or bankruptcy will have upon their employees, especially if insufficient assets are available to pay entitlements. As a result, they often delay taking the necessary action to close a loss making business in the expectation they may be able to either improve their position or trade out of their difficulties. Invariably, this only increases the shortfall to creditors and in the case of company directors, exposes them to potential liability for insolvent trading.

Fair entitlements scheme

Time to call in the cavalry! The Federal Government provides a limited safety net for employee entitlements via the Fair Entitlements Guarantee, which is a legislative scheme administered by the Department of Employment under the Fair Entitlements Guarantee Act 2012. The catch is that the employing entity must either be a company in liquidation or a person who is bankrupt. This article will concentrate on the corporate aspects, as that is where most claims arise. The Fair Entitlements Guarantee scheme thus forms part of the insolvency regime in respect of which insolvency practitioners play a key role. Typically, the Department of Employment will advance funds in respect of certain entitlements to a liquidator, which are in turn paid to employees, net of tax. The Department of Employment then makes a claim in the liquidation equal to the amount advanced.

Who is eligible?

Eligibility

The Fair Entitlements Guarantee may apply to a person if their employer enters liquidation or bankruptcy on or after 5 December 2012.

Prior to that date, the General Employee Entitlements and Redundancy Scheme applied. The Fair Entitlements Guarantee does not apply to companies that have a controller or receiver and manager appointed (although such a company could also be in liquidation at the same time and therefore qualify) or those currently in voluntary administration, (although if it is subsequently placed into liquidation, it then qualifies). Subject to some exclusions, employees will be eligible if they meet the following conditions:

  • Employment with the relevant employer has ended and the employer has entered liquidation or bankruptcy on or after 5 December 2012.
  • The end of employment;
  • was due to the insolvency of the employer, or
  • occurred less than 6 months before the appointment of an insolvency practitioner to the employer, or
  • occurred on or after the appointment of an insolvency practitioner to the employer.
    • They are owed eligible employment entitlements and have taken reasonable steps to prove those debts in the winding up or bankruptcy
    • They are an Australian citizen or, under the Migration Act 1958, the holder of a permanent visa or special category visa.
    • They have made an effective claim that is eligible for an advance.

Exclusions

Contractors and sub-contractors, although contract outworkers in the textile, clothing and footwear industry may be covered under a special scheme for that industry.

  • Employees who are excluded employees within the meaning of section 556 of the Corporations Act, that is, an employee who has been a director or who is a spouse or relative of a person who has been a director at any time in the period of 12 months prior to the date of insolvency, cannot be paid unpaid wages exceeding $2,000 or annual leave, long service leave or retrenchment payments exceeding $1,500.
  • Employees who are relatives (as defined under the Corporations Act) of a bankrupt or a spouse or de-facto partner of a bankrupt at any time within the 12 months ending on the date of the bankruptcy.
  • Employees who were initially engaged as a contractor within six months ending at the earlier of either the termination of employment or the appointment of an insolvency practitioner.

Eligible entitlements

Entitlements

The Fair Entitlements Guarantee Act covers the following employee entitlements:

  • Wages – up to 13 weeks of unpaid wages ending at the earlier of the following times:
  • the time that employment ended,
  • the first time an insolvency practitioner had power (however expressed) to control or manage the former employer.
    • Annual leave.
    • Long service leave.
    • Payment in lieu of notice – maximum of five weeks.
    • Redundancy pay – maximum of four weeks per full year of service and pro-rata for less than a full year of service, if the governing instrument provides such an entitlement.

The amount of assistance for which an employee may be eligible is based upon the terms and conditions of the ‘governing instrument’, which means a written law, an award determination or order recorded in writing, a written instrument or an agreement (for example, industrial award, collective agreement or contract of employment).

The Fair Entitlements Guarantee Act interacts with the Fair Work Act in some areas, including the National Employment Standards, where contracts may be silent on the issue of redundancy. In this regard, the Fair Work Act specifies which employees are not entitled to redundancy, in particular the small business exemption which applies to businesses which employ less than 15 employees. However, in calculating the number of employees, the grouping provisions of the Fair Work Act apply, and the employees of a related entity may be taken into account.

For the purpose of calculating the amount of any advance, employment entitlements are capped by the Fair Entitlements Guarantee Act maximum weekly wage which is currently $2,451.00, subject to indexation. If an employee earned more than the Fair Entitlements Guarantee maximum weekly wage, the Department of Employment will calculate the entitlements based on the Fair Entitlements Guarantee maximum weekly wage at the time when employment ended.

Excluded entitlements

Excluded entitlements under the Fair Entitlements Guarantee Act include superannuation, discretionary payments such as bonuses, expense reimbursements, travel and relocation expenses and amounts that are not payable on an ongoing basis.

Transfer of employment to new employer

Employees will not be eligible to claim under the Fair Entitlements Guarantee Act for payment in lieu of notice and redundancy if the business of the former employer is transferred to a new employer and, within 14 days of the end of employment, the new employer makes an offer of employment:

  • to do work that is the same, or substantially the same, as the work done for the former employer; and
  • on terms and conditions substantially similar to, and considered on an overall basis, no less favourable than those under which the employee was employed immediately before termination.

The more cynical readers may perceive this is an anti- phoenix measure to limit exploitation of the Fair Entitlements Guarantee scheme. It is noted that under section 596AB of the Corporations Act, it is an offence to enter into agreements or transactions to avoid employee entitlements.

Making a claim

A Liquidator or Trustee in bankruptcy will generally advise employees of their right to make a Fair Entitlements Guarantee claim and will assist in the process by providing details of entitlements if the business records are available and contain sufficient information. Whilst the Fair Entitlements Guarantee Act contains a provision that advances may be denied if the Insolvency Practitioner expects to have sufficient funds to pay entitlements within 112 days of appointment, the practical reality is that given the time taken to realise assets to generate sufficient cash, together with the statutory timetable for payment of a distribution, it is often quicker for employees to receive their entitlements under Fair Entitlements Guarantee.

The current procedure requires employees to submit their claims to Department of Employment, preferably via an online form. The claims are then assessed by Department of Employment and sent to the insolvency practitioner for verification. It should be noted that Fair Entitlements Guarantee advances can be reduced by any amounts owing to the employer.

To make an effective claim, employees must lodge a Fair Entitlements Guarantee claim form and include all mandatory information and documentation. For more information about lodging a Fair Entitlements Guarantee claim form, kindly refer to the How do I apply for FEG assistance fact sheet available on the Fair Entitlements Guarantee website. A claim must also be made:

  • no more than 12 months after the end of employment or the date of the insolvency event (whichever is later); and
  • before the discharge of the former employer’s bankruptcy (if the employer was a bankrupt).

The Department of Employment currently has an objective to process Fair Entitlement Guarantee claims within 16 weeks. Earlier this year, Department of Employment conducted its annual stakeholder survey with insolvency practitioners with a view to improving its administration and processes.

Back to the future

The Fair Entitlements Guarantee Recovery Programme

Back in 2007, the Department of Employment and Workplace Relations, (as it was then known) commenced the Active Creditor Pilot Program, in a bid to partially recoup the increasing costs of the General Employee Entitlements and Redundancy scheme. The Active Creditor Pilot Program was intended to fund liquidator’s recovery actions against directors and others in situations where an insolvency event had resulted in unpaid employee entitlements. A particular focus was the conduct of controllers and receivers and managers who did not properly fulfill their statutory obligations under section 433 of the Corporations Act to pay employee entitlements from floating charge assets before paying the proceeds to their appointor, being the secured creditor. At the time, the annual cost of the General Employee Entitlements and Redundancy scheme was approximately $85 million p.a. The Active Creditor Pilot Program was terminated in 2009.

Fast forward to 2015 and the costs of Fair Entitlements Guarantee scheme have averaged $204.1 million p.a. in the four years to June 2014, whilst recoveries in the same period averaged $23.6 million p.a. The estimated cost of General Employee Entitlements and Redundancy scheme and Fair Entitlements Guarantee scheme for 2012-13 was $304 million. The 2015-2016 Federal Budget included funding of $11.5 million over two years from 1 July 2015 for the Fair Entitlement Guarantee Recovery Programme to enable the Department of Employment to more actively pursue its interests as a creditor for fair entitlements guarantee advances. The Fair Entitlements Guarantee Recovery Programme will provide funding to pursue actions such as unfair preferences or loans, noncommercial transactions and insolvent trading.

The introduction of the Personal Properties Security Act 2009 on 31 January 2012 replaced the concept of the fixed and floating charge with a security interest over all the present and after acquired property of a company. However, section 433 of the Corporations Act and the Personal Property Securities Act still recognise that in some circumstances, employee entitlements have a priority over secured creditors in respect of funds realised from the assets subject to a circulating security interest, those assets for example being inventory, debtors and cash at bank. For many years, secured creditors have sought to create fixed charges over circulating assets, with varying degrees of success. To date, there has yet to be a definitive test case run in Australia on this issue. To pursue such a case would require a very brave liquidator or lawyer with very deep, well- funded pockets and no conflicts of interest.

Conclusion

The Fair Entitlement Guarantee scheme can provide piece of mind and support to businesses and employees in situations where:

  • There are insufficient assets available to meet employee entitlements.
  • Secured creditors claims take priority over employee entitlements.
  • There is likely to be a long time frame to recover sufficient funds to pay entitlements and the Fair Entitlements Guarantee scheme will enable payment of most entitlements in a much shorter time frame.

Employment Law

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Employment Law

JANUARY
  • Commentary added on “Cashing out annual leave”
NOVEMBER 
  • Further Information – Added new links
  • Costs Agreements – Reference to interstate costs laws added and updated interest clause
OCTOBER
  • Costs Agreements
    • SA and WA – Added client and firm fields company execution clause trust account details solicitor’s lien.
    • WA – Added clause on scale fees.
    • NSW/VIC – Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
  • New article – Out-of-hours employee misconduct and social media misuse
SEPTEMBER 
  • New article added – Beware the trap of the disgruntled employee – Part 2
AUGUST 
  • Costs agreements have been added for Tasmania, ACT and Northern Territory.
JUNE 
  • Commentary updated in line with Fair Work Commission’s high income threshold for 2016. The threshold is relevant for the purposes of protection from unfair dismissal, compensation available from an unfair dismissal claim and the applicability of modern awards to certain employees.
APRIL 
  • New article published – Beware of the trap of the disgruntled employee – Part 1
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
MARCH
  • New commentary on casual employees included.
FEBRUARY
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

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