With the JobKeeper legislation released it is important for businesses to ensure that they understand the legislation applies and what the can and can’t do especially in relation to employment law.
There is also a little more clarity now about who will be eligible for JobKeeper and the benefits.
The legislation outlines two eligibility tests that will be used to determine if a business is affected by the Coronavirus pandemic.
These two decline in turnover tests are determined by the Australian Taxation Office (ATO). There is the Basic Test and the Alternative Test. Both can be viewed in detail here.
The basic test is simple and compares a similar month or quarter a year ago. The Alternative Test is decided by the Commissioner of Taxation and gives companies the chance to be considered in circumstances where the same month or quarter in the previous year is different. This can be due to the company having differing cashflow months, made acquisitions or scaled up. They must have also dropped in turnover around 30% (but not necessarily 30%). The treasury website also indicates that the commissioner has discretion to grant the JobKeeper to companies that are close to the 30% drop in turnover.
This will allow eligible employees to receive the higher JobKeeper payment paid via the business.
It is important that employers abide by the laws to ensure that they don’t open themselves up to a Fair Work claim.
Fair Work have also recently amended 99 Awards has introduced unpaid pandemic leave and the ability for employees to take twice as much annual leave on half their normal rate if the employer agrees.
It is important to note many of these amendments are temporary and some apply until 30 June 2020 while others until 28 September 2020.
Changes have also been made to a few Awards to allow for more flexibility during the coronavirus outbreak such as:
It is important to check the Award and ensure that it applies to your circumstances.
The Fair Work JobKeeper changes have been implemented and these only apply to those employers who are a part of the Government’s JobKeeper program. This is an important distinction to ensure that you are eligible for JobKeeper in order to direct your employees under the new temporary laws.
The Victorian State Government has announced a plan to assist residential tenants and landlords during the COVID-19 period. There is an offer for a 25% reduction in land tax as well as a subsidy for renters who are eligible. This proposed legislation will be introduced next week to State Parliament.
In relation to businesses who qualify for Jobkeeper, there will be a six month ban on evictions and for both commercial and residential tenancies.
For Commercial Landlords and Tenants the Mandatory Code has been released. Again, the benefits under this scheme are tied to the JobKeeper eligibility.
SME COMMERCIAL LEASING PRINCIPLES DURING COVID-19
Again, for businesses who qualify for Jobkeeper, if an agreement can’t be reached between the landlord and the tenant mandatory mediation must take place. It is important that any amendments agreed to during this time are in writing and properly drafted.
These plans will go far to assist struggling businesses to remain in business.
Still, the conversation not being given much air-time to date is that all these measures may not be enough for some businesses struggling with high overheads and other contractual obligations; for some, insolvency or closure of the business may be the only option.
If you are in a position where you cannot meet all your obligations due to the Coronavirus pandemic then you should act early rather than later to consider all your options. The earlier you start with renegotiation of debt or contractual obligations then the higher the rate of success typically is.
Given the uncertain and mostly unpredictable nature of the COVID-19 pandemic it is difficult to navigate a path forward. Knowing what options you have and understanding more about the process of administration and liquidation are can help you be better informed.
Restructuring or voluntary administration are ways that can help companies to restructure debts and contractual obligations and move forward. Things may not be as grimm as they seem. Early intervention may save the day ie., your business.
Our lawyers are experienced in commercial law and can assist your business navigate the changes that coronavirus has imposed on us. Contact one of our lawyers today to confidentially discuss your issue in further detail if you require further assistance.
Please note: The above is not intended to be legal advice. Every circumstance is different. Always seek legal advice in relation to your individual situation.
© PCL Lawyers 2020