July 9, 2021

JobKeeper & Dismissals

by Illumin8

Your Local Accountant

Keep up to date with changes during this period.

With JobKeeper payments now kicking off we wanted to give some guidance around dismissals; particularly for those on receipt of JobKeeper.


In short, the Fair Work Act has been amended to enable employers to direct employees to:

– reduce hours;
– change duties; or
– change locations.

An employee must consider the request and must not unreasonably refuse it.

All directions regarding those changed must be in writing, a minimum of $1,500 must be paid (“wage condition”) and an employees hourly rate cannot be reduced (“minimum payment guarantee”).

All other laws still apply including those around dismissal.


Valid reasons for dismissal including:

– conduct;
– capacity;
– performance; and
– redundancy.

With the exception of redundancy, it is clear that employees cannot be dismissed if they have been given a full stand-down direction.

Dismissal due to conduct and performance is relatively straight forward; where the line becomes blurred is around capacity. This is where the majority of confusion appears to be arising.

Capacity refers to an employee’s ability to do the job required by their employer and the work they are employed to do, that is, the ‘inherent requirements’ of their position of employment. If an employee is unable or unwilling to perform the inherent requirements of their role then that may be a valid reason to terminate their employment.

Should an employee want to stay home because they have a reasonable concern about an imminent risk to their health or safety, they either need to come to an arrangement with their employer (including leave) or provide evidence (including in the form of a medical certificate) as to why they shouldn’t be present at their workplace. Should neither of these occur, and work still be available, this may be a valid reason to terminate their employment.

During this period, ensure ALL requests are well documented and that you assess the Health & Safety In The Workplace During Coronavirus requirements contained at Fair Work before commencing dismissal proceedings.

See the Small Business Fair Dismissal Code for businesses employing less than 15 people.

For those employing more than 15 people, we suggest seeking independent advice from an HR professional or related advisor.

It’s important to consider where all of your employees stand as JobKeeper payments begin, and some workplaces resume operating.

If you have any questions about your financial obligations in relation to your employees, feel free to get in touch with one of the team.


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