See Fair Work Act 2009 s.789GDB
If a jobkeeper enabling stand down direction applies to an employee, the employer must ensure that the employee’s base rate of pay, worked out on an hourly basis, is not less than the base rate of pay, worked out on an hourly basis, that would have been applicable to the employee if the direction had not been given to the employee.
If a direction in relation to duties of work applies to an employee, the employer must ensure that the employee’s hourly base rate of pay is not less than the greater of the following:
- the hourly base rate of pay that would have applied to the employee if the direction had not been given to the employee, or
- the hourly base rate of pay that is applicable to the duties the employee is performing.
The following example is taken from the Explanatory Memorandum to the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020.
Rachel works as an administrator for a manufacturing business whose retail operations have moved online as a result of significantly reduced shopfront demand and a 30 per cent reduction in turnover, following the Coronavirus outbreak. Rachel’s employer qualifies for the jobkeeper scheme in relation to Rachel and gives her a jobkeeper enabling stand down direction under section 789GDA that reduces her ordinary hours of work from 38 to 32 hours per week. Rachel’s contractual base pay rate is $30 per hour, which cannot be reduced for her hours of work, regardless of how many hours she is directed to work (section 789GDB, which contains the hourly rate of pay guarantee).
As a result of the jobkeeper enabling stand down direction reducing her hours, Rachel’s fortnightly pay has reduced from $2280 ($30/hr multiplied by 76 hours worked in a fortnight) to $1920 ($30/hr multiplied by 64 hours worked in a fortnight).
Rachel must be paid for hours she worked, and as her reduced fortnightly pay is still higher that the value of the fortnightly jobkeeper payment ($1,500) she must be paid that higher amount (section 789GDA, which contains the minimum payment guarantee).
However, under the jobkeeper scheme, Rachel’s employer can apply the value of the jobkeeper payment towards her fortnightly pay.
If the employer does not meet the hourly rate of pay guarantee, they may be liable to pay a civil penalty.
The hourly rate of pay guarantee does apply to legacy employers.
A civil remedy provision is a provision of the Fair Work Act that if breached, means that the person affected can apply to a Court for an order for a financial penalty against the alleged wrong-doer, or any other order the Court considers appropriate such as an injunction.