Update
Government aid
COVID-19 presents an enormous challenge for the economy.
Australia | Publication | April 2020
The Federal Government has introduced a new “JobKeeper” scheme, aimed at assisting eligible employers who have experienced a decline in turnover caused by the COVID-19 pandemic to retain jobs.
The scheme consists of:
You qualify for the scheme if you carried on a business in Australia (or in the case of not-for-profit entities, pursue objectives principally in Australia) as at 1 March 2020, and satisfy a decline in turnover test.
In most cases, the decline in turnover test will require you to establish that your projected turnover for a relevant month or quarter1 has declined by a specified percentage, when compared to the corresponding period in 2019.
The required percentage is at least 30 per cent, unless you fall within one of the categories below:
Turnover is calculated as it is for GST purposes, with some modifications. If you are an ACNC-registered charity or deductible gift recipient, certain donations and gifts received or which are likely to be received are also included in the calculation of turnover. This means that if you have experienced a decline in donations or gifts, you may be eligible for the scheme.
REMEMBER: Even if you do not initially qualify for the scheme, you should continue to monitor any decline in turnover as you may qualify for the scheme in a later period.
If you qualify, you will receive a fixed payment from the Australian Taxation Office (ATO) of $1,500 per fortnight for each eligible employee.
The payment is essentially a reimbursement, as it will be paid by the ATO in arrears and you must have already paid the eligible employee at least $1,500 (before tax) in the relevant fortnight in order to receive the payment.3 This means that the wage of employees who earn more than $1,500 per fortnight will be partly subsidised, and employees who earn less than $1,500 per fortnight will receive an uplift.
Eligible employees are those who:
This means that an employee could be eligible if you terminated their employment after 1 March 2020 but then subsequently re-hired them (for example, where you did not expect to be able to pay the employee as a result of the COVID-19 pandemic, but are able to rehire the employee with the support of the JobKeeper payment).
There are some administrative requirements to the payment scheme, which include that:
A number of flexibilities have been introduced into the Fair Work Act 2009 (Cth) if you qualify for the JobKeeper scheme. These will be in place until 28 September 2020, and will override any contradictory provisions in other parts of the Fair Work Act 2009 (Cth), a modern award, an enterprise agreement or a contract of employment.
In summary, these flexibilities include:
There are general requirements that apply to the making of the directions in (1) and (2) above, including that it must not be unreasonable in all of the circumstances and you must consult with the employee (or a representative of the employee) about the direction.
The following are useful resources for further information:
These updates are applicable to Australian law only and are generic in nature. If you have any specific legal concerns relating to the impact of COVID-19 on your people or your business, please reach out to our pro bono team (ausprobono@nortonrosefulbright.com) and we will consider your pro bono legal request. If we aren’t able to help you, we will try to find someone else who can. This update is current as at 21 April 2020.
The relevant months for the decline in turnover test are March 2020 through to September 2020. The relevant quarters for the decline in turnover test are the quarter commencing on 1 April 2020, and the quarter commencing on 1 July 2020.
This does not apply to schools or certain higher education providers.
A failure to pay the eligible employee at least $1,500 (before tax) in the relevant fortnight will be a breach of the Fair Work Act 2009 (Cth), for which you may face penalties.
For example, recipients of parental leave pay and dad and partner pay under the Paid Parental Leave Act 2010 (Cth) are excluded from being an eligible employee.
Publication
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