Lawyers are warning of potential traps if employers rush to change staffing arrangements before the Morrison Government finalises the "small print" on its JobKeeper coronavirus payment.
Clayton Utz partner Christy Miller says more than 452,000 businesses are already understood to have registered for the JobKeeper subsidy (see Related Article), with expectations that about six million employees will be able to access the $1500 fortnightly payment.
According to another lawyer with the firm, Jessica Tinsley, its clients are actively fielding inquiries from workers about whether they will be eligible, after Prime Minister Scott Morrison urged them to contact their employers if they fit the criteria.
But she told Workplace Express that "at a time when things are changing sometimes a couple of times a day", and as employers might feel pressure to make commitments or adjustments to access the scheme, "we need to wait".
"It is definitely a good scheme, but we are trying to encourage businesses to really think about the broader implications and to wait to see the small print, as there may be some restrictions that we're not yet aware of," Tinsley says.
Need to clarify nature of relationship
According to early analysis developed by Tinsley and Miller for employers, they "must be aware of the potential traps" if standing down workers, reducing working hours and pay or re-hiring retrenched workers in order to qualify.
Tinsley and Miller also have a warning for any businesses that might "nominate all long-term casuals to receive the JobKeeper payment without clarifying the casual nature of the employment relationship".
This might later be "construed as evidence of a permanent relationship" and expose employers to potential misclassification claims and liability for back-payments of unpaid employee entitlements, they say.
Employers must also be aware that steps taken to re-hire retrenched employees might expose them to liability, Tinsley and Miller say, noting unfair dismissal claims could test whether the redundancies were genuine.
Tread carefully on "unilateral change"
Tinsley and Miller say it is not yet clear whether workers have to be employed on the same terms and conditions that they were on prior to dismissal, in order for the employer to receive the JobKeeper payment.
They say employer groups and unions are concerned that some who cannot afford to pay the difference between the JobKeeper payment and ordinary hours "may wish to reduce the employee's ordinary hours and wages so that they only receive the JobKeeper payment".
While the Morrison Government might have to make special provisions stopping employers from doing this, Tinsley and Miller say such changes might also be subject to terms in awards, agreements and employment contracts.
They warn that employers "should exercise caution in unilaterally changing an employee's terms and conditions, as a substantial change may be construed by a Court as a redundancy situation", entitling workers to a redundancy payment.
Pandemic standdowns untested
With the Fair Work Act requiring employers to only stand down workers during a period in which they cannot be "usefully employed", as a last resort, they say the use of such provisions when dealing with situation similar to COVID-19 is untested.
Tinsley and Miller say some workers with ordinary salaries higher than $1500 a fortnight might challenge standdown decisions to recover the difference.
Others might complain of adverse action if employers decide not to nominate them for the JobKeeper payment, they say.
Miller says the scheme is intended to work "hand in glove" with proposed amendments to industrial legislation that will likely restrict employers' ability to dismiss workers at the end of the six-month subsidy period.
While it will provide a lifeline to many businesses and workers, they say employers should "resist pressure to hastily change existing COVID-19 staffing arrangements until the plan's fine print is confirmed by Parliament".