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JobKeeper ‘legacy employers’ to be extended IR flexibility to help recovery

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
25 August 2020 2 minute readShare
Christian Porter

Another JobKeeper tweak has been announced, allowing employers coming off the wage subsidy at the end of September to continue to cut employee hours and change duties if they meet a new 10 per cent revenue loss test.

Under the bill, expected before Parliament on Wednesday, businesses no longer receiving the JobKeeper wage subsidy would still retain the industrial relations flexibility measures, provided they have suffered a 10 per cent drop in revenue in relevant quarters this year compared to last year.

The tweak was revealed by Attorney-General Christian Porter, who explained that the adjustment will serve to aid “legacy employers” — those that have received JobKeeper but don’t qualify for the second stage of the stimulus.

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According to the Attorney-General, to qualify for the flexibility, businesses will need to hold a certificate, issued by an accountant, proving their 10 per cent decline in turnover each quarter. For small employers with fewer than 15 workers, a self-certificate will be accepted, but penalties are expected for those that lie.

“It is important that the flexibility, which has allowed many businesses to survive the crisis to date, continues to be provided to businesses which are on the road to recovery but which haven’t made it out yet, to ensure they can continue to trade, keep people in jobs and continue to rebuild as we emerge from the pandemic,” Mr Porter said.

 

“A 10 per cent threshold for businesses that were on JobKeeper, but which will no longer qualify for the wages subsidy, will mean they can continue to adapt their workplaces to keep operating in the post-COVID world.”

According to the JobKeeper tweak, while those remaining on the wage subsidy will still be able to reduce hours to zero, adjust duties or work locations, legacy employers will only be allowed to cut hours to a floor of 60 per cent of an employee’s ordinary hours of work as at 1 March.

Other restrictions will also prevent an employer from requiring an employee to work less than two hours on their usual work day, while any workplace changes will need to be communicated to the employee in written notice issued seven days in advance to the change.

“These changes are time-limited. They are not permanent changes. They are linked to the extension of JobKeeper until the end of March 2021,” Mr Porter underlined.

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The emergency change has been welcomed by the opposition, but Labor is asking the government to go a step further and maintain the wage subsidy payments at their current $1,500 rate beyond 27 September. The opposition is arguing that businesses are still suffering due to the COVID-19 pandemic, especially in Victoria.

‘Rate cut inevitable’

However, the Finance Minister has silenced any hope of a rate cut reversal, telling ABC on Monday that Australia needs to transition out of this “historically unprecedented crisis level fiscal support” back into a new normal situation.

“The $1,500 JobKeeper payment level will continue until the end of September. Then it will reduce down to $1,200, and that is just a subsidy towards the wage until the end of December, and from the beginning of January until the end of March it continues at $1,000,” Mathias Cormann said.

“We have to get back to a situation where viable and profitable businesses pay for the wages of their employees out of their income not on the basis of taxpayer support. We are going to have to let the economy adjust to the new normal. We have to find out which businesses are going to be genuinely viable and profitable moving forward and able to pay for the wages for real jobs. We cannot just keep this going for years on end on the basis of taxpayer-funded support.”

He conceded that a lot of businesses that no longer qualify for JobKeeper will still find themselves in a challenging situation, the recognition of which has given way to the IR flexibility extension. 

“As we transition businesses off this taxpayer-funded support back into a new normal, they will continue to need some support through this transition, and making sure that we maintain a level of flexibility and workplace relations arrangements through this transition is going to be important,” the Finance Minister said.

JobKeeper ‘legacy employers’ to be extended IR flexibility to help recovery
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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