We’re all aware of the huge disruptions and changes COVID-19 has brought both our personal, but professional lives over the last six weeks. We are all collectively working our way through the feelings of chaos and uncertainty. As a business owner, you have to also shoulder the responsibility of managing employees through this time. They are looking to you to lead and provide guidance to ensure the business survives these unprecedented times.
In this piece, we touch on some critical areas of your business that may have been impacted by the changes with an emphasis on your employees and your rights and obligation as an employer.
No doubt your inbox is full of articles and resources relating to COVID-19 but unless you’ve had the time to keep abreast of all the changes daily I’m sure the content is now out-dated. This speaks as to why Trekk Advisory has been incredibly selective in the content we are providing our clients as we want to ensure it’s both relevant and comprehensive.
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Redundancy vs Stand-Downs
If your business has been significantly impacted by the effects of COVID-19 and you’ve had to close your doors (or re-think your business model entirely), leaving some employees roles dispensable, you’ve likely considered both these options. Often in times of panic, we are making decisions in a reactive mindset which isn’t ideal - you need to ensure you are still complying with the applicable industrial relations laws.
A genuine redundancy according to the Fair Work Commission (FWC) is when the person’s job doesn't need to be done by anyone. Therefore when considering this option to deal with the crisis you need to ensure this role will not be required once this pandemic passes. The redundancy road can be a costly one, with the risk associated if the circumstances don’t constitute a genuine redundancy.
Before this pandemic the term ‘I was stood-down’ from my employment was rare, but it seems daily we are hearing about big corporations like Qantas & Myer standing down their employees in the masses.
Although a stand-down clause isn’t covered in any modern awards it can be covered in an employment contract or enterprise agreement – so check these firstly for requirements concerning notice and consultation.
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The employer has a statutory right to stand down an employee without pay under the Fair Work Act (2009). If you intend to use this option for part or all of your workforce due to COVID-19 it is recommended to exercise this right vigilantly. You must be able to prove that one of the following circumstances applies to you to enforce this provision.
- There is a complete stoppage of work (government-enforced shut-down);
- The employee cannot be usefully engaged in any other capacity in the business (this includes a parent company);
- The cause of the stoppage is outside the control of the employer.
You may be one of the businesses that have seen a significant downturn in work during this past couple of weeks, leaving you with too much capacity. Generally in these circumstances, the advice from the FWC is that an employer cannot stand down an employee due to a deterioration of business conditions.
Other approaches for employees who have had a down-turn in trade
There are other options you should explore with your employees before considering redundancy or standing them down. It's best practice to work together with your employees to find suitable solutions that benefit both the needs of the individual and business.
You may ask your employees to take their annual or long service leave entitlements (in some awards this may be taken at half pay – we will visit this further down as an option) – generally, the taking of leave should be mutually agreed upon between the employer and employee (placed in writing can be done informally over email).
However, in the current circumstances, it may be necessary to proactively encourage employees to take paid leave as an alternative to unpaid leave or stand down without pay.
You may be able to explore temporary changes to the terms and conditions of their employment including;
- temporarily varying hours (together with a pro-rata reduction in pay);
- temporarily reducing salary or wages or;
- taking a period of unpaid leave;
Reductions in hours or salary should be by agreement, any variation to the employment contract should be confirmed in writing.
Keep in mind that your employee could be used in an alternative position within your business. This would constitute a new variation to their original contract, so make sure this is captured in their employment records.
The FWC’s new provisions for qualifying business for JobKeeper payments
In this section, I won’t provide details on the eligibility, obligations or the application for businesses for the Jobkeeper payments, but I will talk to what changes the FWC has introduced for qualifying businesses. (Head to the treasury website for all latest updates).
The FWC has recently amended the Fair Work Act (2009) to account for the introduction of the JobKeeper wage subsidy scheme. Qualifying business of the scheme will now have the ability to enable the following;
- Temporary and partial stand-downs;
- Temporarily alter employees’ usual duties and locations of work;
- Allowances to alter employees days and times of work and the use of annual leave;
Therefore, businesses that qualify for the scheme, can now direct employees to work fewer hours or none at all this is now referred to as a JobKeeper enabling stand down direction.
For example, if I’m a permanent employee and my ordinary hours are 38 hours a week, but due to the influence of COVID-19, my employer can only usefully employ me for 20 of those hours. The employer can now use the JobKeeper stand-down provisions to stand me down for the remaining 18 hours a week.
They can request employees to perform their usual duties on different days or times outside the scope of their contracts.
They can request that an employee takes paid annual leave (if they keep a balance of at least 2 weeks). An employee can’t unreasonably refuse a request from their employer to take annual leave that is a business that qualifies for the JobKeeper payments.
The FWC is attempting to adapt its legislation to suit market conditions, so we can be confident there is going to be more changes that will come out, but this will be a moving feast.
Unpaid pandemic leave & annual leave at half pay
With the continued theme of the FWC trying to keep up with the volatile situation, they have also passed down changes to 99 modern awards (full list here) to insert temporary clauses to provide employees with 2 weeks unpaid pandemic leave and the ability to spread out their leave entitlements at half-pay.
As of the 8th of April 2020, the pandemic leave is available to all employees under the relevant awards and the full 2 weeks do not need to be accrued and can be taken until the 30th of June 2020.
It can be utilised by employees who are required to self-isolate (government or medically enforced) but be mindful the leave doesn’t cover individuals who are caring for someone with the virus – this is where personal carer’s leave can be applied.
Under the new schedule, employees can request to take their annual leave entitlements over a longer period at half-pay. For example, if I was to have 6 weeks' annual leave accrued with my employer and my role is subject to one of the applicable awards I may take 12 weeks' annual leave at half pay for each pay run period with the employers' approval (agreement must be in writing).
I’ve also written a blog about the annualised wage arrangement changes that occurred earlier this year, read here.
Policies and procedures you should have in place during this pandemic
The events over the past few weeks have made us all re-group and re-think our internal policies and procedures to help not only with protecting our businesses but also our employees to ensure we all know what to do in the unlikely event that one of our employees was to test positive to COVID-19.
If you haven’t already, you need to introduce policies and procedures around COVID-19 to your workplace. This is critical, and its intent isn’t to alarm your employees but to ensure everyone is prepared if one of your employees was to be diagnosed.
Queensland Health has some great resources that can assist with the creation of your policies and procedures – you may wish to have it reviewed by us to ensure you haven’t missed anything before distributing to your tribe.
Secondly, with the majority of us that can now work from home (WFH), you need to have comprehensive policies and procedures to help facilitate this change. In Australia, the workplace health and safety laws still apply when employees are working in their home offices.
Employees should be asked to undertake a self-assessment of their WFH set up’s and sign off on a working from home policy and agreement. Comcare has a great checklist that you can use to model your self-assessments on and other areas of concern like mental health and wellbeing.
If employees are using personal devices are they safe? Can they access social media? What does your social media policy say? These are risk areas that need assessing and appropriate measures put in place to safeguard your business.
Mental health and well-being during these difficult times
“It is only in our darkest hours that we may discover the true strength of the brilliant light within ourselves that can never, ever, be dimmed.” – Doe Zantamata
It’s a tough gig being in small business at the moment, but it’s the path we have chosen. Those of us that come out the other side of this troublesome time will be stronger for it.
Mental health and well-being during these times is a critical part of the success of the business and people who undervalue this statement will no doubt have a difficult time surviving. You have a responsibility to yourself and your staff to provide a safe and healthy working environment. This includes both the physical and psychological safety of employees.
Unfortunately, we are all isolated from friends, family, and colleagues that would most likely pick up on the changes in behavior (sometimes even before we do), so I encourage everyone to implement a daily mental health check-in to assess yourself honestly – the Black Dog institute run through in this article how to perform these assessments.
For you, the business owner, it is imperative you remain positive and calm during this crisis period as staff will often mimic your behaviour. To provide comfort to your tribe, it’s important to keep them in the loop with any changes and keep up communication daily here are a few tips to assist.
- Use video conferencing daily to communicate with your team (watch body language and any changes in behaviour);
- Book a 1 on 1 meeting weekly to check-in to see how they’re traveling (doesn’t have to be flash, just a few questions to get a gauge on their mental state);
- Encourage staff to reach out if anything is bothering them or if they need to take a day off to recuperate;
- Be vulnerable yourself and acknowledge that these are new circumstances for all and it’s okay not to ‘be okay’;
- Encourage staff to use the time they would commute to work in the morning to go for a walk with the family, read a book, yoga/meditate – time for them;
- Encourage staff to establish a work routine similar to the office i.e. 10 am morning tea break, 1 pm lunch break & 5 pm knock off time.
- Encourage clear boundaries between work and home life and that you don’t expect them to work outside of ordinary work hours unless it’s warrant.
All of these items can help assist keeping employees happy and engaged.
I’d also suggest providing articles to your employees from creditable mental health providers such as;
If any of the above has struck a chord with your business, reach out to us here a Trekk Advisory we’d be happy to assist.
Jen is our HR super-star of Trekk Advisory. She has a Bachelor in Business (Human Resource Management) & is a certified member of the Australian Institute of HR. She operates from our Brisbane office, and enjoys a good thriller or fantasy novel in her down-time.