Home JobKeeper: Do I have to nominate all eligible employees?

UpdatesApr 29, 2020

JobKeeper: Do I have to nominate all eligible employees?

The JobKeeper wage subsidy scheme is now being implemented by the Australian Taxation Office (ATO) in workplaces across Australia. The obligations on employers to execute this scheme appropriately and effectively have been clarified through a number of different bodies.

By Charles Power

The JobKeeper wage subsidy scheme is now being implemented by the Australian Taxation Office (ATO) in workplaces across Australia. The obligations on employers to execute this scheme appropriately and effectively have been clarified through a number of different bodies.

A key step that must be taken for employees to access the JobKeeper scheme is to complete a signed nomination form and give it to their employer. That form requires the employee to meet the eligibility requirements. Civil and criminal liability arises if the employee’s completion of this form is false or misleading.

So, if you qualify as an employer for the JobKeeper scheme and you receive one of these forms from a person who was your employee as at 1 March 2020, do you have to nominate this employee to the ATO?

JobKeeper for retrenched employees

If you have retrenched the employee since 1 March 2020 or in the case of a casual, not offered them shifts, do you need to re-employ or re-engage the person? If still employed, can you decline to nominate them and then retrench them?

The ATO is clear on this question. It informs employers that if they decide to participate in the JobKeeper scheme, they cannot leave out eligible employees who have nominated.

However, it’s not clear the JobKeeper legislation imposes an express obligation on employers to re-employ or re-engage any dismissed employees for the purposes of obtaining the JobKeeper subsidy.  There also does not appear to be any prohibition on retrenching eligible employees.

If unfair dismissal laws apply to that retrenchment, one of the factors that will determine whether it is a genuine redundancy (and therefore exempt from challenge as an unfair dismissal) will be the employer’s compliance with relevant consultation obligations and whether it was reasonable in all the circumstances for the employee to be redeployed.

The consultation clause in a modern award requires you to genuinely consider alternatives to retrenchment so that it is a last resort. It requires you to adopt a reasonable and fair redundancy process that affords the affected employees a genuine opportunity to be heard about the proposed redundancy before any final decision is made. This in turn requires the provision of such information about the planned redundancies as is reasonably necessary for the making of suggestions in respect of that matter and being receptive to any resultant suggestions. You can approach consultation with a particular outcome in mind, provided it’s open to change. Genuine consultation must provide the employee with an opportunity to influence the decision. However, it is not a right of veto. Provided you take the employees’ input into account, you can proceed with implementing the redundancies.

When an employer closed its Melbourne office for financial reasons, the Fair Work Commission (FWC) in ASU v Auscript (2020) ruled the employer did not give genuine consideration to options other than redundancy, such as interstate redeployment or accessing the JobKeeper scheme. The FWC observed that while the employer had determined its future “is unviable, there nevertheless remains an obligation to treat staff with dignity in this time of crisis”.

If an employer has consciously determined to retrench an employee rather than bring them into the JobKeeper scheme, they will need to be prepared to justify this in the event of any legal challenge, given the availability of other options to preserve employment, such as JobKeeper-enabling stand downs.

Changes to the general protections provisions

The JobKeeper scheme has also resulted in amendments to the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act). A JobKeeper-eligible employer cannot take adverse action against a JobKeeper-eligible employee because the employee would be entitled under the JobKeeper scheme to be paid by the employer no less than $1500 a fortnight (inclusive of PAYG tax and salary sacrifice items).  Therefore, if an employer retrenches an employee for reasons that include avoiding having to pass on the JobKeeper subsidy to the employee, then the employer will contravene the FW Act and attract liability for penalties, compensation and reinstatement. 

Similarly, if the employer declines to rehire a permanent employee or re-engage a casual for this reason – or reasons that include this reason – they will contravene the general protections prohibition. 

The general protections in the FW Act may even extend to steps taken by the employer to exclude an eligible employee from accessing the scheme (i.e. not nominating the employee to the ATO), if that leads directly to some injury to the employee in their employment, e.g. retrenchment or stand down without pay.

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