COSBOA today called for solutions to be developed by Wednesday next week to ensure that the Job Keeper initiative is implemented by the federal parliament in a way that will work for employees, employers and the broader economy in that way that it is intended. Employers must feel confident that they have flexibility to change hours of work and scope of work, and also undertake necessary stand downs of staff, without the risk of future punishment by Union action or Class Action.
Peter Strong, CEO of COSBOA, stated “we know the problems that we face, we know there are concerns from unions and employer groups alike. But we cannot ask COVID-19 to stop while we form committees and hold round tables. The Job Keeper legislation is critical to the livelihoods of millions of Australians and the future ability of our economy to recover once the health crisis is over”.
The current challenge with the proposed Job Keeper legislation can be summarised as follows:
Job Keeper will be available to businesses that have either been forced to close or are continuing to trade but at a significantly reduced rate of revenue (defined as 30% or more). But the announcement was made without considering current uncertainty surrounding the legal use of the Stand Down provisions in the Fair Work Act [Section 524(1)(c)] of the Fair Work Act. This is a central risk for business owners and is graphically demonstrated by the current legal action being pursued by the Qantas engineers alliance unions against QANTAS for alleged breaches in the use of this provision.
Some business owners who are considering the ‘Job Keeper’ payment are reporting that their employees (or ex-employees) have said their employer cannot tell them to do work other than the work defined by their original employment contract. This limitation means that business owners cannot innovate or reinvent their business due to their limited ability to direct their employees to undertake reasonable alternative work that is needed for the current and near-term survival of their business.
COSBOA is receiving multiple reports that business people are now having second thoughts about taking advantage of the Job Keeper payment, despite previously registering their interest with the ATO. In the face of these two challenges they are now considering closing their businesses (or remaining closed) as they are not willing to live with the risk of future unfair dismissal claims or other claims under current Fair Work laws on top of trying to keep their business alive for themselves and their employees.
Mr Strong said that “Under the Job Keeper process businesses are required to first pay employees the Job Keeper funds and then be reimbursed at the end of each month from the ATO. This substantial up-front cost, combined with uncertainty about key workplace provisions, is leading many business owners to simply close their business, retrench their staff, and join the Job Seeker queue at Centrelink instead of running the risk of legal uncertainty” Mr Strong said.
Two issues must be urgently resolved. The first is maintaining the integrity of the employment relationship between the employer and the employee so that the employer can vary both the hours worked and scope of employment tasks during the period of the COVID19 crisis. There must, however be safeguards in place to make sure that employers do not abuse this concession by making employees perform unreasonable tasks (such as home duties for the employer).
The second is that employers must be able to stand down staff where the business is operating under dramatically reduced revenue conditions which, for the purposes of the Job Keeper payment, is defined as a 30% fall in revenue. The business owner must be able to stand down staff in this instance without risk of future industrial or legal action which, in turn means that employees are able to access the $1500 per fortnight Job Keeper payment and stay connected to the business - as opposed to retrenching them and forcing their staff members to apply for the means tested Job Seeker payment at Centrelink.
“COSBOA applauds the work of the ACTU and employer groups for introducing working hour flexibility into some awards but notes that this does not address scope flexibility – particularly, where the activity that is being introduced through innovative business responses does not readily or reasonably fall under the provisions of the relevant Award”, Mr Strong said.
Mr Strong added: “It must be remembered that it is the business owner that decides whether to apply for the Job Keeper payment. If they perceive that the legal uncertainty associated with this payment is too great, then they will simply shut their doors, retrench their employees – and we will all lose. We have great industrial minds on both sides of the IR divide – Unions and Employer Groups. Both sides must work urgently with both the Coalition Government and the Federal Opposition to develop a solution that gives the legal certainty needed on both of these issues so that employers can keep their employees connected to their business without risk of future legal action.”