Ending employment and the former JobKeeper scheme
When an employer ended employment
If a qualifying employer ended an employee’s employment, the employee may have been entitled to:
- payment of accumulated entitlements including pay, annual and long service leave
- redundancy pay
- other entitlements.
When dismissing an employee, a qualifying employer should have checked the applicable award, enterprise agreement, employment contract and workplace policies that applied. They should also have checked the National Employment Standards (NES). These set out the rules and obligations when dismissing an employee. They also applied when dismissing an employee participating in the JobKeeper scheme.
The Fair Work Act also includes protections against being dismissed because of:
- a reason, or in a way, that is harsh, unjust or unreasonable
- another protected right.
These protections at work continued to apply to employees participating in the JobKeeper scheme.
Dismissal while under a JobKeeper enabling stand down direction
If a qualifying employer needed to dismiss an employee while a JobKeeper direction was in place, the usual rules about ending employment apply. This includes:
Notice when an employer ended the employment
Working less hours under a JobKeeper direction
If an employee was given notice of termination while a JobKeeper direction to work reduced hours was in place, they continued to work the reduced hours for the notice period. This applied so long as their qualifying employer wanted them to stay employed during their notice period.
Working no hours under a JobKeeper direction
If an employee was given notice of termination while not working because of a JobKeeper direction, they stayed stood down for the notice period. This applied unless the direction finished or was revoked before the end of the notice period. The employee’s employment ended at the end of the notice period.
For the time they were still employed and the JobKeeper enabling stand down direction still applied, the employee needed to be paid the greater of:
- the applicable JobKeeper payment, or
- their usual pay for any work they perform during that fortnight (including any leave payments or public holiday pay they are entitled to).
Payment in lieu of notice
Employees of a qualifying employer may have been paid out notice instead of being asked to work during the notice period. This is called payment in lieu of notice.
If this happened, the employee’s final pay was calculated on their full pay rate and usual hours and days of work, as if the JobKeeper direction hadn’t been given. For example, an employee who was entitled to 3 weeks’ notice, received 3 weeks’ pay at their full rate of pay for their usual hours.
Redundancy happens when:
- an employer doesn’t need the employee’s job to be done by anyone, or
- the business becomes insolvent or bankrupt.
The JobKeeper scheme didn’t change the rules for calculating an employee’s redundancy entitlements. When an employee’s role is made redundant, they may:
- get notice (or payment in lieu of notice)
- be entitled to redundancy pay (also known as severance pay)
- need to be consulted about the redundancy before it happens.
Redundancy pay is paid based on an employee’s original and usual rostered hours, not the hours under any JobKeeper direction. For example, an employee working fewer or no hours under a JobKeeper enabling stand down direction still received redundancy pay based on their ordinary and rostered hours before the stand down direction was given.
Final pay and JobKeeper payments
The Australian Taxation Office (ATO) oversaw the types of payments that could and couldn’t be covered by the JobKeeper payment. This included the types of payments a qualifying employer needed to pay an employee in order to remain eligible for the JobKeeper payment.
Accumulated leave entitlements (such as annual leave and long service leave) that are paid out on termination counldn’t be used to cover or ‘make up’ the JobKeeper payment.
When an employee resigned
An employee could resign when they received JobKeeper payments from their qualifying employer. This also applied if there was a JobKeeper enabling direction in place including to work fewer hours, change duties, or change work location.
When an employee resigned, they may have needed to give their employer notice. Employees should have checked the rules about giving notice in any award, enterprise agreement, employment contract, or workplace policy that applied.
Notice period when an employee resigned
An employee’s notice period could have run at the same time as a JobKeeper enabling stand down direction applied and any rostered work. Employment ended at the end of the notice period. It could also have ended earlier if the employer and employee both agreed.
During the notice period, an employee was paid the same as if they hadn’t given notice. For an employee that received JobKeeper payments from their employer, this was the greater of:
- their applicable JobKeeper payment, or
- their usual pay for any work they perform during the notice period (including any leave payments or public holiday pay they are entitled to).
If a JobKeeper enabling stand down direction ended or was revoked before the end of the notice period, the employee’s pay would have gone back to normal. This could happened if the JobKeeper enabling stand down direction was withdrawn by the employer or the JobKeeper scheme ended during their notice period.
Calculating employee entitlements
Employees working under a JobKeeper enabling direction continued to accumulate entitlements (such as annual leave) as if the direction had not been given. For an employee working reduced hours under a JobKeeper enabling stand down direction, entitlements when employment ends were calculated based on their usual ordinary hours before the direction was given. This included notice and accumulated leave. Annual leave continued to accumulate as though the direction had not been given, including if the employee has been directed to work no hours under a JobKeeper direction.
Final pay and JobKeeper payments
The ATO oversaw the types of payments that could and couldn’t be included in the JobKeeper payment. This included:
- the types of payments an employer needed to pay in order to remain eligible for the JobKeeper payment
- some amounts payable to an employee at the end of their employment (such as leave or redundancy).
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