For businesses affected by COVID-19, one of the most important issues to consider is what to do about staff. Do you tap into JobKeeper or negotiate leave, modify roles or make people redundant? These decisions weigh heavily on even the most experienced business owners.
If you’re grappling with how to manage your employees during the, this guide will clarify each option, helping you make savvy decisions.
JobKeeper: Can It Help You?
This $1,500 fortnightly payment is being rolled-out to help Australian businesses Keep Staff and Carry On. And while it might not absolve you of tough decisions, it can certainly help inform your path moving forward.
✔ Eligible for JobKeeper:
If JobKeeper is something you’re eligible for, you’ll also gain additional benefits thanks to recent amendments to the Fair Work Act (“FWA”). These offer wiggle room when it comes to varying employee duties, location of work, hours of work and forced annual leave, opening up new possibilities that are important to acknowledge.
Has your business closed due to COVID-19, or do you need to reduce staff headcount in the short term? You can direct your employees to take annual leave (provided you leave them with two weeks for the much-needed post-COVID-19 breather).
You can negotiate for the employee to take double their usual entitlement to annual leave on half pay. In this case,the employee remains employed and their take-home pay remains unchanged while you would get a reduction on your leave balance sheet.
Important note: As with all workplace arrangements, being reasonable is key. Be aware that you can’t give unnecessary or unreasonable directions to your employees - especially without consulting them first. And at least three days’ notice must be given before making any directions to take leave.
X Not eligible for JobKeeper:
If your business isn’t eligible for JobKeeper - or the payment simply isn’t enough to cover the cost of wages - you still have options. These include:
● Negotiated leave
● Temporary flexible working arrangements
● Standing down
Let’s work through each one and its implications.
Leave can be a buffer for you and your employees.
Even if you’re not covered by the JobKeeper amendments (as discussed above), some modern awards or enterprise agreements allow employers to direct employees to take leave under specific circumstances (such as where the employee has excessive leave accrued). Look at the modern award or enterprise agreement that applies to your business and see if you’re eligible.
If that’s not an option for your business, you can invite your employees to access their accrued annual or long-service leave, or alternatively, take a period of leave without pay.
Pro tip: The most important things to bring to these conversations are honesty, humility and transparency. Being upfront about your business’s situation usually goes a long way to finding an outcome that works for both parties. Always check the relevant modern award or enterprise agreement.
You can negotiate a variation to aspects of your employee’s role. This might entail reduced hours and/or salary, or a change in their roles and duties.
Before doing so, you must discuss it with your employee. Talk them through the practical implications and potential impacts of any changes, and if they’re happy to go ahead, you’ll need a written agreement.
Here’s an example: Due to current circumstances, you might need an employee to work on staggered days or weekends. The first step is to discuss the change in advance with your employee; let them know why you’re in this position and exactly what your needs are. Next, listen to their response, appreciating any financial (and non-financial implications) it might have on the employee and their family.
Pro tip: Once you reach an accord, be sure to put the arrangement in writing. An Individual Flexibility Arrangement is a great instrument for this, allowing the scope of the original employment contract to be temporarily adjusted to reflect the unique circumstances of your business.
“Standing down” is the legal term for suspending an employee’s work. During this time, your employee doesn’t come to work and they don’t get paid. Think of it like hitting pause.
You can’t exercise this right lightly. The impact to your business must be significant enough to justify a temporary suspension of work, requiring evidence that there’s nothing useful for your employee to do (in their current role, or an alternate role) during the stand down period.
Because we’re living through unprecedented times, these rights are relatively untested in the context of a pandemic. Consider all your options before opting to stand an employee down - and treat it as a last resort, only implemented following legal advice.
Pro tip: The specifics of your stand down rights can be found in the relevant modern award, enterprise agreement, or the FWA. Seek legal advice before standing down employees.
The fallout from COVID-19 won’t evaporate anytime soon. We’re likely to be left with some very real, very long-term changes.
If you can foresee that the impacts to your business aren’t likely to be temporary; or you’ve been forced to pivot, there may be roles in your organisation that end up obsolete. Enter: redundancy.
Genuine redundancy means that the role no longer needs to be performed (by that employee or anyone else), and there’s no alternative role on offer. Before you head down this path, keep in mind that JobKeeper payments stop for any employees made redundant.
Make sure you’ve factored in notice and payouts. Redundancies require specific minimum notice plus a redundancy payout. These vary depending on how long that employee has been with your organisation, but usually fall between 4 and 12 weeks’ pay.
Pro tip: Ask yourself: Is redundancy the savviest solution available? Consider whether the employee is able to work in a suitable post COVID-19 position. Might a stand down and/or JobKeeper payment be a better option until you have a clear understanding of the future? Can you make use of the employee’s leave or flexible working arrangements prior to venturing down the redundancy road? Answer these questions carefully and honestly before choosing to make an employee redundant.
Wherever your choices lead, be sure to keep your employees in the loop. Everyone has families, responsibilities, interests and aspirations at stake - and while it’s impossible to please everyone, you can make decisions with empathy and integrity. And they’re the savviest of all.
If you need any extra information on the above, or want to discuss your options as an employer, simply give us a call on +61 2 8880 9383 or email us at metis_at_metislaw.com.au.