JobKeeper changes to Fair Work Act: How do they apply to ECEC?
The Sector > COVID-19 > JobKeeper changes to Fair Work Act: How do they apply to ECEC?

JobKeeper changes to Fair Work Act: How do they apply to ECEC?

by Jason Roberts

April 21, 2020

Now that the application for the JobKeeper subsidy has officially opened, operators across Australia will be working towards submitting their claims and also working with their teams to try and optimise workforce arrangements to ensure viability of their services through the COVID-19 pandemic. 


A key part of this is ensuring that rosters are appropriately positioned in light of lower occupancies and lower revenues. 


In an acknowledgment of the complexity of this, the Fair Work Act has been temporarily amended in a way that offers a framework for operators to make informed decisions and for employees to be protected against the backdrop of the JobKeeper subsidy. 


This article aims to unpack the key areas of relevance for early childhood education and care (ECEC) operators in this important area.


Editor’s note: Whilst every endeavour has been made to ensure the information in this article is accurate at time of print and that any subsequent updates from Fair Work have been included, readers are encouraged to conduct additional research prior to making business decisions to ensure their specific circumstances are addressed completely.    


What changes were made to the Fair Work Act that are important for operators?

The new provisions in the Fair Work Act allow employers to temporarily stand down employees, reduce their hours or days of work, change an employees duties and / or change an employees location of work. 


They also enable employers to make agreements with their employees to change their days and times of work and to take annual leave in certain circumstances. 


Are these changes available to all operators?

No. They are only available to operators that are eligible for JobKeeper support, and to those employees that are eligible to receive it. 


How long are these new rules in force for?

The changes are temporary and are due to expire when JobKeeper ends on 28 September 2020. 


Does an operator have to make changes to their workforce arrangements?

No, not at all. An operator who feels the current hours and days being worked by their team are satisfactory can of course continue to operate under those circumstances. 


However, if as an operator you have made, or feel you need to make changes, the Fair Work Act amendments will provide a framework from within which to enact decisions lawfully. 


Am I able to reduce a team members’ hours because occupancy is so low?

If you are eligible for JobKeeper then yes you can. 


The new provisions enable a qualifying employer to direct an eligible employee to work fewer hours or days if the employee cannot usefully be employed for their normal hours because of changes to business conditions created by the COVID-19 pandemic or government initiatives designed to slow the transmission of the coronavirus. 


The direction must be reasonable. If it is not reasonable it does not apply. 


Do I need to formally notify the team member of a decision to reduce hours?

Yes, the direction must be given in writing and the employer must consult with the employee at least three days before issuing the direction.  A record of the consultation must be retained. 


How does the hours reduction and JobKeeper work in practice?

Assuming an operator and their employee are eligible for the JobKeeper scheme an operator may issue a stand down direction that reduces an educator’s hour per week from 38 to 32. 


For example, an educator who is paid $25 an hour would then see their take home pay fall from $1,900 to $1,600 a fortnight. 


The reduced fortnightly pay is still higher than the JobKeeper payment of $1,500 so must be paid in full but the amount that the operator pays falls from $1,900 pre COVID-19 to $100 post COVID-19 because the JobKeeper subsidy picks up the balance. 


At no point can hourly rates be reduced, only the hours worked. 


But what happens if a team member earns less than $1,500 a fortnight after a reduction?

In this situation the operator must continue to pay the employee $1,500 regardless of whether they are working enough hours to cover that amount. 


So if a team member is earning $25 an hour and works 10 hours a week, or 20 hours over the fortnight, they will still be liable for the entire $1,500 subsidy. 


What happens to the annual leave of team members who have reduced hours?

Annual leave will accrue as normal, as if they had not had their hours cut, for those employees that are eligible for JobKeeper and have seen their hours reduced.


This principle also applies to redundancies and payments in lieu of termination. Even though their hours are reduced their entitlements will be calculated from their pre JobKeeper hourly work rosters. 


What happens if an operator wants a team member to do a different job?

An employer can direct an employee to perform duties that are within their skill and competency other than what they are contracted for if the duties are safe, the employee has the required licenses and qualifications and the duties are within the scope of usual business operations. 


Can an operator ask an employee to work from home?

Yes, that is allowed too, and indeed they can ask a team member to work at other services if required as long as they are safe, the travel time is not unreasonable and the job being done is within the scope of operations of the business. 


What does an operator need to do to make changes to roles or locations of work?

As per reducing hours detailed above, the employer must consult with the employee at least three days before issuing the direction and make the direction in writing. A record of the consultation must be retained. 


The most important caveat is to ensure that any directions are not unreasonable in this area and that the employer reasonably believes that the issuing of these directions is necessary to continue the employment of the team members.  


Is an operator allowed to ask a team member to take leave?

Yes, an operator can ask a team member to take leave and the team member has to consider the request and not unreasonably refuse it. 


If the team member agrees the notification must be in writing and will still accrue their usual leave entitlements for the period that the agreement applies and service will be considered continuous in cases of redundancy and pay in lieu of notice. 


What happens if an operator is not eligible for JobKeeper?

In instances where JobKeeper is not available, the new Fair Work Act provisions will not be applicable and accordingly directives to stand down employees or amend locations or roles as described above will not apply. 

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