Employment Law Update: Stage 4 Restrictions

With Stage 4 restrictions now in effect, businesses across a range of industries will be required to close or reduce operations throughout Metropolitan Melbourne for at least six weeks. These restrictions will no doubt have further significant impact on businesses and employees who are already facing severe financial hardship as a result of the current COVID climate. In this update, we provide a breakdown of the changes imposed by the Victorian Government and the obligations of employers and employees to ensure compliance. We also provide an overview of options available for businesses and individuals who are impacted by the recent restrictions.

Closed and Restricted Work Premises and Activities

On-site operations across a number of industries will be required to shut down, including contact-based retail trade, some manufacturing, administration services and some wholesale trade, unless otherwise permitted. Exceptions may include retail businesses that provide ‘click and collect’ or contactless services such as dry cleaning.

Some industries may be permitted to operate in a restricted capacity or under industry-specific obligations including meeting the ‘Universal’ or ‘enhanced High-Risk’ COVID Safe Plan obligations.

Businesses have until 11:59PM on 7 August 2020 to enact the required ‘COVIDSafe plan’.

Permitted Work Premises and Activities

Some businesses may still be permitted to operate on-site during Stage 4 restrictions, however in very limited and strict circumstances.

Apart from those involved in frontline response, this may include ancillary and support businesses required on-site to ensure closed or restricted businesses can continue operating, services connected to animal welfare and essential services such as supermarkets.

The complete overview of the effected industries can be accessed here.

Permitted Worker Permit

Businesses permitted to operate on-site are responsible for providing each individual employee, contractor and/or sub-contractor (including sole traders) an individual Permitted Worker Permit (‘PWP’) if workplace attendance is absolutely necessary and the employee cannot work from home. A PWP is required even in circumstances where work is irregular (such as for some casual employees) or if a shift is unexpectedly picked up last minute.

Eligibility for worker permit

Employers can issue a worker permit to their employee if:

  • the organisation is on the list of permitted activities;

  • the employee is working in an approved category for on-site work; and

  • the employee cannot work from home.

An employee must not use a worker permit, even if they have been issued one, if:

  • they test positive to coronavirus (COVID-19) and are required to self-isolate; and

  • they are a close contact of someone who has tested positive.

The official PWP form can be accessed here.

It is worth noting that a PWP is not required in very limited circumstances including if an employee holds official employer-issued photo identification (usually held only by law enforcement, emergency services workers or health workers).

Penalties for non-compliance

Penalties of up to $19,826 (for individuals) and $99,132 (for businesses) may apply if an employer operates despite not being a Permitted Work Premises.

In addition, there will be on-the-spot fines of up to $1,652 (for individuals) and $9,913 (for businesses) for anyone who breaches the Permitted Worker scheme requirements, including employers and employee who do not carry their worker permit when travelling to and from work.

Business Support Fund – Expansion Grants

In an effort to support effected businesses, the Victoria Government is offering a one-off $10,000 grant to effected ‘employing businesses’ in Melbourne and Mitchell Shire and $5,000 to effected ‘employing businesses’ in regional Victoria.

Eligible businesses should apply for the grant by 14 September 2020, if they haven’t done so already.

Coronavirus (COVID-19) Worker Support Payment

The Victorian Government is incentivising self-isolation and quarantining by offering a one-off $1,500 payment to eligible Victorian workers who are directed to stay home due to a positive COVID-19 test result or as a result of coming into close contact with someone with the virus.

Amongst other criteria, eligible workers (whether permanent, casual, part-time, fixed term or self-employed) must live in Victoria, have exhausted all leave entitlements from work and do not receive JobKeeper payments or other Australian Government income support.

Pandemic Leave Disaster Payment

Alternatively (if the COVID-19 Worker Support Payment has not been claimed), eligible Victorians may now receive $1,500 from the Federal Government if they do not have any income (including sick leave entitlements) because they must quarantine at home or self-isolate.

This payment may be claimed each and every time the applicant meets all the required criteria rather than just once.

JobKeeper, Your Obligations, Rights & Entitlements

Now more than ever, an increased number of employers will inevitably have to explore every possible avenue to cope with the impact of Stage 4 restrictions. For the first time, this may include applying for JobKeeper, considering standing-down employees or in the worst-case scenario, making positions redundant.

Consequently, we implore both employers and employees to familiarise themselves with their respective legal obligations, rights and entitlements to avoid preventable legal action.

Please refer to our previous Employment Law update for more details.

If you are an employee or an employer that is affected in any way by the COVID-19 ramifications and would like to discuss your legal rights/obligations, please do not hesitate to contact our employment law team.

Changes to awards and the JobKeeper Scheme

On 8 April 2020, the Fair Work Commission (FWC) made determinations temporarily varying 99 employment awards to alleviate some of the challenges employers and employees are currently facing due to the government imposed COVID-19 restrictions.

A summary of the changes is set out below.

Unpaid pandemic leave

Employees are entitled to take up to two weeks unpaid pandemic leave if they are required by government regulations or medical authorities to self-isolate. Subject to agreement between the employer and the employee, a period of greater than two weeks may be taken.

Annual leave at half-pay

Subject to written agreement between an employer and employee, an employee may take twice the amount of annual leave they have accrued at half pay.

Direction to take annual leave

In circumstances where a business has been impacted by the COVID-19 restrictions, employers can request for an employee to take annual leave provided that the employee’s leave balance will not be reduced to less than two weeks. Employees must be provided with at least one week’s prior notice (or less by agreement) if being directed to take annual leave.

JobKeeper Scheme

On 8 April 2020, the Federal Parliament passed legislation empowering the Government to subsidise the payment of wages by qualifying employers in an amount of $1,500.00 per eligible employee per fortnight (JobKeeper Scheme).

1. Eligibility

Under the JobKeeper Scheme, an employer will be eligible for the subsidy if:

  • its business has an annual turnover of less than $1 billion and it estimates that its turnover has reduced or will likely reduce by at least 30%; or

  • its business has an annual turnover of $1 billion or more and it estimates that its turnover has reduced or will likely reduce by at least 50%; or

  • it is a registered charity (excluding schools and universities) and it estimates that its annual turnover has reduced or will likely reduce by at least 15%.

Employees will be eligible for payment under the JobKeeper Scheme if they:

  • were employed by an eligible employer as at 1 March 2020;

  • have been employed as a long-term casual on a regular basis for at least 12 months as at 1 March 2020;

  • are at least 16 years of age;

  • are, at 1 March 2020, an Australian citizen or the the holder of a permanent visa or Special Category (Subclass 444) visa;

  • are a resident for Australian tax purposes on 1 March 2020; and

  • have not received a JobKeeper payment from another employer.

Coupled with the FWC’s changes to the awards, the JobKeeper Scheme amends the Fair Work Act 2009 (Cth) to provide employers who are eligible for the JobKeeper Scheme with greater flexibility to:

  • make temporary and partial stand downs;

  • alter employee’s usual duties and location of work;

  • alter ordinary/rostered hours; and

  • direct the use of annual leave.

Employers are under no legal obligation to participate in the JobKeeper scheme and eligible employees are not legally required to agree to receiving the JobKeeper payment.  However, it is a requirement that an employer notifies all eligible employees that it is receiving the JobKeeper payment.

2. Annual leave 

There is no requirement that employees must exhaust all annual leave entitlements before being eligible to receive JobKeeper payments.  JobKeeper payments will continue as normal during any period that an employee is taking annual leave, however the employer must pay the employee the full amount that they are entitled to for the period of annual leave.

For example, where an employee takes 10 days of annual leave and is entitled to be paid $2,000 for that period of leave, the employer will need to pay the employee $2,000, which will include the $1,500 JobKeeper payment.

Employers may request an employee to take annual leave (rather than direct them to do so) if they are in receipt of JobKeeper payments (and only to the extent that the employee will not be left with an annual leave balance of less than two weeks). The request must be reasonable.

Similarly, employees in receipt of JobKeeper payments must not unreasonably refuse an employer’s request to take annual leave so long as it won’t cause their annual leave balance to fall below two weeks.

At this stage, there has been no change in Victoria to the laws as they apply to long service leave. Employers are still required to provide 12 weeks’ prior written notice of any direction to take long service leave.

3. JobKeeper payments when employees are stood down

Employers are still entitled to receive JobKeeper payments for stood down employees or those who were terminated post 1 March 2020 but re-hired.

Under the JobKeeper Scheme, an eligible employer must pay an eligible employee who has been stood down the $1,500 JobKeeper payment per fortnight (before tax).  For a stood down employee, the JobKeeper payment amount is fixed at $1,500, irrespective of whether the employee’s normal fortnightly earnings are more or less than $1,500.

Where an employee earns more than $1,500 per fortnight, the employer may choose (in its absolute discretion) to cover the gap between the $1,500 fortnightly JobKeeper payment and the employee’s normal fortnightly earnings. However, at this stage there is no obligation upon the employer to pay the difference.

Leave entitlements will continue to accrue for employees who are receiving JobKeeper payments, even if the employee has been stood down. This is because an employee who has been stood down remains employed by the employer during any period that they are stood down.

Employers should keep in mind that where a stood down employee returns to work, the employer must pay the employee their normal earnings for any period during which they return to work (even though the employer will only receive $1500 from the government as a JobKeeper payment with respect to that employee).

Can a stood down employee seek alternative employment?

Yes. A stood down employee may seek and obtain paid employment elsewhere for the stand down period and will remain eligible to receive the the JobKeeper payment from their primary employer as long as the employee is only receiving the JobKeeper payment from their primary employer and not their other employer as well.

PAYG and superannuation

Under the JobKeeper Scheme, an employer must pay a minimum of $1,500 per fortnight to its eligible employees, withholding income tax as appropriate. The $1,500 per fortnight per employee is a before tax amount.

Where an employee is stood down, the employer is not legally required to pay superannuation on the $1,500 JobKeeper payment but may choose to pay this if it wishes.

Where an employee is still working and is paid:

  • more than $1,500 per fortnight, the employer’s superannuation obligations will not change;

  • less than $1,500 per fortnight, the employee still receives $1,500 under the JobKeeper scheme but the employer is only obliged to pay superannuation on the portion of the $1,500 which relates to the employee’s normal earnings for the relevant fortnight.

4. Multiple employers

JobKeeper payments are still accessible to eligible employees who work for more than one employer.  However, as noted above, the employee is only entitled to receive the JobKeeper payment from one employer only and on the basis that they are a permanent employee of that primary employer.

Only the primary employer as nominated by the employee may receive JobKeeper payments for that employee.  Any additional employers will not be eligible to receive JobKeeper payments for that particular employee and any income received by an employee from alternate employer will not affect the employee’s JobKeeper payments.

5. Example

By way of example, under the JobKeeper Scheme where an eligible employer’s business has been affected by COVID-19 to such an extent that it is reasonable in the circumstances to direct an eligible employee to take annual leave, the employer may:

  • direct the employee to take annual leave until their balance is reduced to 2 weeks;

  • receive the $1,500 fortnightly JobKeeper payment from the government in respect of the employee for this period;

  • pay the employee their normal wage for this period (where the employee’s normal wage is less than $1,500, the amount to be paid to the employee will nevertheless be $1,500 per fortnight);

  • upon the expiry of the leave period, either:

    • direct the employee to return to work and pay the employee their normal wage; or

    • stand down the employee and continue to pay the employee the $1,500 fortnightly JobKeeper payment (note: the amount to be paid by the employer to the employee during period of stand down remains static irrespective of whether the employee’s normal wage is greater or less than $1,500 per fortnight).

An employer may select, in its discretion, which employees to stand down and whether to stand down all or only some employees.

6. JobKeeper vs JobSeeker

An employee cannot simultaneously receive both the JobKeeper and JobSeeker payments.

JobSeeker payments are only payable to the unemployed.  When an employee is stood down, they remain employed by their employer.

If you are an employee or an employer that is affected in any way by the COVID-19 ramifications and would like to discuss your legal rights/obligations, please do not hesitate to contact our employment law team.