EOFY 2020 | Looking ahead to a new financial year

by | Jun 30, 2020 | COVID-19 Blog, Employment Law and Workplace Relations Blog

As the 2019/2020 financial year draws to a close, it is important that employers and employees alike reflect on the changing economic and occupational landscape in the wake of COVID-19. We recommend that employers remain vigilant to the upcoming modifications to any applicable Awards as well as the emerging compliance issues that are highlighted in this Alert.

Key issues

  • Panel to discuss potential IR reform;
  • Amendments or cessation of JobKeeper payments;
  • Changes to various Modern Awards;
  • Increases, including the minimum wage and Fair Work Commission filing fees; and
  • WAIRC IR reform one step closer.

Agenda for IR reform

The Australian Government now has an enormous task to rebuild the economy following COVID-19 and has proposed 5 working groups – each one chaired by Industrial Relations Minister, Christian Porter and including union leaders, employers and industry groups.

The groups will propose changes to the existing industrial relations system aimed at creating more jobs and stimulating the economy focussing on:

  • Modern Awards simplification and Enterprise Agreements making;
  • Providing greater security for casuals and fixed-term employees;
  • General compliance and enforcement mechanisms; and
  • Greenfields agreements for new enterprises.

The working groups have until September 2020 to confer with the view of implementing any changes before the delivery of the budget which is currently expected in October 2020.

Review of the JobKeeper Scheme

On 8 June 2020, the Australian Government announced JobKeeper payments will cease for childcare employers from 20 July 2020.  Instead, the Government will provide a $1.6 billion Early Childhood Education and Care Relief Package.  Childcare employers were originally told they may receive JobKeeper payments until September 2020, so the changes proposed for July are especially worth noting.

The Child Care Subsidy (CCS) and Additional Child Care Subsidy (ACCS) in place prior to COVID-19, will be bolstered by a $708 million ‘transition payment’ for the period from 13 July 2020 until 27 September 2020, subject to child care centres maintaining employment levels and current fees.

Though JobKeeper is legislated until 28 September 2020, we expect many industries’ eligibility for JobKeeper will be reviewed at the end of June 2020.  It remains to be seen whether announcements similar to the one concerning the childcare industry will be made.

Compliance with minimum wage rate and penalty increases under applicable Modern Awards

Modern awards prescribe minimum requirements, including loadings and penalties that may apply, subject to when employees are rostered to work.  If you have employees covered by a modern award, it is important to ensure that minimum pay rates, penalty rates and loadings are correctly applied.

Notably, the Fair Work Commission has increased these penalty rates and loadings for some modern awards effective 1 July 2020.

For example, a casual employee under the Social, Community, Home Care and Disability Services Industry Award 2010, who was previously entitled to a 150% penalty loading for ordinary hours worked between midnight Friday and midnight Saturday, is now entitled to a 175% loading from the first full pay period starting on or after 1 July 2020.

Employers should revisit any applicable modern awards prior to the new financial year to ascertain whether any increases may be payable to employees from July to ensure they do not underpay employees or breach any modern awards.

For more information see:

National minimum wage increase

The Fair Work Commission has ordered that the National Minimum Wage will be increased by $13 per week to $753.80 per week (from $19.49 per hour to $19.84 per hour based on a 38-hour week) from the first full pay period starting on or after 1 July 2020.

Award wages also increase by 1.75% (plus rounding), although the increases are staged. For example, increases to the Aged Care Award 2010 and the Health Professionals and Support Services Award will apply from the first full pay period beginning on or after 1 July 2020, whereas the ‘second’ group of Awards will commence from the first full pay period beginning on or after 1 November 2020 and the ‘third’ group from 1 February 2021.

Employers in aged care and health, such as medical and dental practices, who pay employees at the level of the award minimums (or close to) should review their employees’ pay rates to ensure that they will be compliant with the new rates in the new financial year.

Filing fees and high-income threshold increase

From 1 July 2020, the application fee for dismissals, general protections and anti-bullying applications made under the Fair Work Act 2009 will increase to $74.50.

Additionally, the high-income threshold in unfair dismissal cases will increase to $153,600 and the compensation limit will be $76,800 for dismissals occurring on or after 1 July 2020.

WAIRC Reform

The Western Australian Government has flagged legislation to implement changes recommended by a general inquiry held in 2018 and a wage-theft inquiry held in 2019.

The changes proposed by the Industrial Relations Legislation Amendment Bill 2020 were described by WA IR Minister Bill Johnston as:

  • ensuring WA’s employment laws apply to all employees in the State IR system by removing some current exemptions;
  • allowing the WA Industrial Relations Commission to make orders preventing workplace bullying and make equal remuneration orders (both features of the Commonwealth Fair Work Act 2009);
  • bringing all local governments under the State IR system;
  • making changes to the Long Service Leave Act 1958 (WA);
  • increasing penalties for non-compliance to match those faced by federal system employers;
  • prohibiting ‘cash-backs’ (agreements which require employees to pay back part of their wages); and
  • increasing powers for WA industrial inspectors.

Key takeaways

In summary, we recommend that employers:

  • stay up to date on the latest information concerning the JobKeeper Scheme to ensure their ongoing eligibility;
  • ensure they are compliant with the new minimum wage and penalty rate increases that come into effect on 1 July 2010; and
  • monitor WA industrial relations changes if they are currently operating outside of the Federal IR system.

Please contact our employment and workplace relations team on (08) 9321 0522 should you require any advice on the abovementioned changes and how these may impact your business.