Breaking News: Substantial changes to industrial relations in response to COVID-19 – JobKeeper payments and modern award changes

By 9 April, 2020 April 28th, 2020 No Comments

Yesterday, the $130 billion JobKeeper legislation which provides a flat rate wage subsidy payment worth $1,500 a fortnight was passed by parliament.

Earlier this month, the Fair Work Commission announced a provisional view to amend 103 modern awards to include a new temporary Schedule which will provide employees with unpaid “pandemic leave” and the ability to take annual leave at half pay.

This rate of change is unheard of in the industrial relations landscape. Prior to COVID-19 changing the world in which we live and work, changes to industrial relations laws happened painfully slowly. The latest round of changes to modern awards has taken 6 years. In contrast, it took the Fair Work Commission just one day to grant an order amending the Hospitality Industry (General) Award (2010) so as to provide the flexibility necessary to save jobs.

The JobKeeper scheme will be introduced as a set of rules made by the Treasurer. These rules set out set out eligibility for the scheme and deal with other aspects of its operation, while legislation has inserted Part 6-4C of the Fair Work Act to operate until 28 September 2020 allowing employers accessing the JobKeeper scheme to make various changes to their employment arrangements.

With so many sudden changes, the already complex workplace relations system can be exceptionally difficult to navigate.  Pragma’s employment lawyers are providing advice to employers and employees across all industries  to assist them to understand their rights and options. 

JobKeeper Scheme

The JobKeeper scheme is a wage subsidy system set up to assist businesses who have been substantially impacted by the pandemic.  The aim of the system is to assist employers to retain their staff.

Eligibility of Employers

1. To be eligible, a company with turnover of more than $1 billion must have suffered a 50 per cent downturn. Companies with turnovers of less than $1 billion must have suffered a 30 per cent downturn.

2. The $1500 payments will be granted to employers via the Australian Taxation Office, to be paid to employees under the existing payment system. It can be used to subsidise current wages or paid as a subsistence wage if the employee has been stood down.

3. It will be up to the employer if they want to pay superannuation on any additional wage paid because of JobKeeper Payments.

Eligibility of Employees

4. Under the scheme as it stands, employees over the age of 16 are eligible if they are full-time or part-time workers, sole traders or if they have been in casual work for more than a year, and are not receiving the JobKeeper payment from another employer. The wage subsidy lasts for six months, and is set at $1,500 because that’s about 70 per cent of the median wage.

5. Eligible employees include individuals who as at March 1st are Australian citizens, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.

6. Further to this, if an employee was made redundant after 1 March, the employee will be eligible for the JokKeeper allowance if their employer re-employs the employee.


7. Employees will be able to receive this payment in a number of different ways:

a) If the employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to the prevailing workplace arrangements. The JobKeeper Payments will subsidise part or all of the income.

b) If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the employer must, at a minimum, pay $1,500 per fortnight, before tax.

c) If the employee has been stood down, the employer must pay, at a minimum, $1,500 per fortnight, before tax.

What other changes have been introduced?

8. The Fair Work Act 2009 (Cth) (Act) will be amended to support the practical operation of the JobKeeper scheme in Australian workplaces.

9. Amendments to the Act will temporarily enable employers to issue JobKeeper enabling directions. These can provide (subject to various safeguards) for increased flexibility around employees’ hours of work via a new JobKeeper enabling stand down direction, performance of duties and location of work. It also enables employers and employees to make agreements for increased flexibility around annual leave arrangements and days and times of work. The FWC will be able to resolve disputes, including by arbitration.

10. JobKeeper qualifying employers must ensure that at least the value of JobKeeper payments they receive is passed on to employees each fortnight, or the amount they would receive for the work they have performed if that would be greater.

11. The rules around the accrual of service and calculation of benefits for employees receiving JobKeeper payments will also change such that the:

a) leave entitlements;

b) redundancy pay;

c) payment in lieu of notice of termination; and

d) annual leave of JobKeeper recipients will be calculated based on the hours/pay rates they were earning prior to the JobKeeper subsidy program.

12. Please note: the changes to the Act only apply to employers and employees who are eligible for JobKeeper payments

To speak with one of our specialist employment lawyers, click here.

(Image Source: ABC.net.au)