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When a JobKeeper enabling direction will have no effect
Table of contents
Introduction
See Fair Work Act 2009 ss.789GDC, 789GE, 789GF and Division 6 of Part 6-4C
Jobkeeper enabling directions cannot be made retrospectively.[1] This means that directions given before Part 6-4C commenced operation on 9 April 2020 are not authorised by provisions in that Part. Depending on the circumstances, such directions given before 9 April 2020 may still have been authorised, for example under a fair work instrument or a contract of employment.
Jobkeeper enabling directions have no effect if they are unreasonable or the employee was not consulted.
Jobkeeper enabling directions about duties of work and location of work also have no effect unless the employer reasonably believes they are necessary to continue the employment of one or more employees.
Reasonableness
See Fair Work Act s.789GK
A jobkeeper enabling direction does not apply if it is unreasonable in all the circumstances.
For example, a direction may be unreasonable because of the impact it would have on the caring responsibilities of the employee.
A direction relating to the reduction of hours given to employees in a particular category may be unreasonable if the direction has an unfair effect on some of those employees compared with the other employees in that category.
Section 789GK does not otherwise provide guidance on what may be unreasonable.
See What is a reasonable belief? for more information.
Necessary to continue the employment of employees
See Fair Work Act s.789GL
To give a jobkeeper enabling direction about duties to be performed or location of work, the employer must have information before them that leads them to reasonably believe that the direction is necessary to continue the employment of one or more of their employees.
This is not required for jobkeeper enabling stand down directions.
What is a reasonable belief?
The expression ‘reasonable belief’ and similar expressions are used in a wide variety of contexts in statutes and by the common law.
In the context of discrimination laws, the High Court has held that what is reasonable must be ascertained taking into consideration all of the circumstances of the case, including by reference to the scope and purpose of the Act.[2]
What is a reasonable belief in the context of s.789GL of the Fair Work Act has not yet been considered. In light of previous High Court authority, however, what is reasonable should be considered in light of the objects of Part 6-4C of the Fair Work Act (see s.789GB), the objects of the Fair Work Act (see s.3), and the provisions to which the requirement pertains and the circumstances in the particular case to which the jobkeeper enabling direction relates.
It is clear from cases decided in those differing contexts that not only must the requisite belief actually and genuinely be held by the relevant person, but in addition the belief must be reasonable in the sense that, objectively speaking, there must be something to support it or some other rational basis for the holding of the belief and it is not irrational or absurd.[3]
In determining whether a jobkeeper enabling direction given by an employer to an employee is necessary to continue the employment of one or more employees of the employer, it does not matter that a similar jobkeeper enabling direction could have been given by the employer to an employee other than the relevant employee.[4]
Hypothetical example
Sonya runs a café and employs Chris and Jill, who are both waiters. Sonya’s business has qualified for the jobkeeper scheme. Sonya is entitled to jobkeeper payments for both Chris and Jill.
As a result of COVID-19, Sonya cannot run her café as usual, so she decides that to keep the business running, she will offer home delivered meals. Sonya needs someone to do the deliveries, so she directs Chris to perform those duties. The direction has effect, even though Sonya could have directed Jill to do the deliveries rather than Chris.
Consultation
See Fair Work Act ss.789GM and 789GMA
Consultation requirements for employers currently entitled to jobkeeper payments and legacy employers are different.
A jobkeeper enabling direction given by an employer currently entitled to jobkeeper payments does not apply to an employee unless:
- the employer gave the employee at least 3 days written notice of the employer’s intention to give the direction. A lesser period of notice may apply if the employee genuinely agrees to a lesser notice period, and
- before giving the direction, the employer consulted the employee, or a representative of the employee, about the direction.
A jobkeeper enabling direction given by a legacy employer does not apply to an employee unless the employer gave the employee at least seven days written notice of the employer’s intention to give the direction. A lesser period of notice may apply if the employee genuinely agrees to a lesser notice period.
Before or during the seven days before a jobkeeper enabling direction is given by a legacy employer:
- the employee may appoint a representative, including an employee organisation (a union) for the purposes of the consultation
- the employee may tell their employer they have appointed a representative, in which case the employer must recognise the representative
- the employer must consult with the employee or their representative
- for the purposes of the consultiation, the employer must provide the employee or their representative information about the proposed direction, which may include information about the nature of the direction, when the direction is to take effect, and how the direction is expected to affect the employee. The employer is not required to disclose confidential or commercially sensitive information to the employee
- the employer must invite the employee or their representative to give their views about the impact of the proposed direction on the employee (for example any impact on the employee’s family or caring responsibilities), and
- the employer must give prompt and genuine consideration to any views given by the employee or their representative.
The Regulations may require that a written notice of the employer’s intention to give the direction must be in a prescribed form. As at the date of publication of this benchbook, no relevant regulations have been made.
If an employer has already given notice and consulted with an employee, the employer can give a jobkeeper enabling direction without having to give notice and consult again if:
- the employer previously complied with the notice and consultation requirements in relation to a proposal to give the employee another jobkeeper enabling direction under the same provision, and
- the employee or their representative expressed views about the proposal to the employer, and
- the employer considered those views in deciding to give the direction.
An employer must keep a written record of a consultation with an employee or their representative.
Example – consultation by legacy employer
The following example is taken from the Explanatory Memorandum to the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020.
Meelah works as a retail assistant in Florence’s pet accessories boutique. Florence’s business qualified for the jobkeeper scheme prior to 28 September 2020. Her business is starting to recover so she will not requalify for the extended jobkeeper scheme, though she has still satisfied the 10% decline in turnover test for the June 2020 quarter. Florence has obtained a certificate from an eligible financial service provider to this effect.
Meelah was given a valid jobkeeper enabling stand down direction in April 2020 that will cease at the start of 28 September 2020 (because Florence’s business will no longer qualify for the jobkeeper scheme).
As a legacy employer, Florence can give Meelah a jobkeeper enabling stand down direction under new section 789GJA. All of the requirements of this section have been met, and Florence wants to give Meelah a new jobkeeper enabling stand down direction on 28 September 2020 with effect from that day.
On 14 September 2020, Florence gives Meelah notice of her intention to give the new direction (more than the statutorily required seven days’ notice).
On 16 September 2020, Florence decides to start consultation. Florence sends Meelah an email in which she sets out information about the proposed new direction, including that it is a jobkeeper enabling stand down direction under section 789GJA that proposes to direct Meelah to work 70% of her ordinary hours as at 1 March 2020. The email states the proposed direction would take effect from 28 September 2020, and sets out a proposal for how Meelah’s normal days and times of work would be reduced to give effect to the fewer hours. The email invites Meelah to give her views on the impact of the proposed jobkeeper enabling stand down direction.
On 18 September 2020, Meelah decides to appoint Sinead, a delegate of her union, to be her representative for the purposes of this consultation. Meelah tells Florence she has appointed Sinead. Florence’s early start to consultation, and Meelah’s appointment of Sinead, is validated by subsection 789GMA(9).
Sinead asks Florence if they can have a phone call to discuss the proposed direction, and they agree on a call on 23 September 2020. During the call, Sinead conveys Meelah’s concern that Florence’s proposal for how Meelah’s normal days and times of work would be reduced will make it harder to arrange care for her young child because she would work shorter shifts each day. Meelah would prefer to work her normal length shifts on fewer days, instead.
On 24 September 2020, Florence considers her full staffing availability and rosters to see whether she can accommodate Meelah’s request, which she determines that she can. Florence emails Sinead and Meelah to tell them this, and sets out the new proposal for Meelah’s reduced hours. Sinead replies noting that Meelah prefers the new proposal, and Florence confirms this arrangement will be reflected in the direction she gives.
Florence does not have to repeat the notice and consultation requirements for the reformulated direction as she has already done this for the original proposal, in accordance with subsection 789GMA(10).
On 26 September 2020, Florence gives Meelah the direction reflecting the agreed days and times Meelah will work, to take effect from 28 September 2020. The effect of this direction can continue until 27 October 2020, pending Florence’s business satisfying the 10% decline in turnover test for the September 2020 quarter, obtaining the necessary 10% decline in turnover certificate and notifying Meelah of the direction continuing (or ceasing if no certificate) after this date.
References
[1] Fair Work Act ss.789GDC(1)(a), 789GE(1)(a) and 789GF(1)(a).
[2] Waters v Public Transport Corporation [1991] HCA 49 per Mason CJ and Gaudron J at 32
[3] Amie Mac v Bank of Queensland Limited and Others [2015] FWC 774 (Hatcher VP, 13 February 2015) at para. 79.
[4] Fair Work Act 2.789G(2)
Updated time
Last updated
15 September 2020
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