Premier Daniel Andrews’ most recent statement announced the shut down of all non-essential activity across Victoria to combat the spread of coronavirus. This includes the immediate closure of all restaurants, pubs, casinos, gyms, places of worship and entertainment centers, leading to the displacement of many employees. On the other hand, general worksite employees are left in the dark about the future of their employment and many employers are making drastic changes to ensure the longevity of their companies.
REDUNDANCY
Companies within the hospitality, retail and travel industries are facing the first wave of economic loss due to the restrictions of COVID-19. This has seen changes in the operational requirements for many companies, leading to redundancies.
At this stage, there are no new laws regarding redundancies. However it is still an employer’s responsibility to take the appropriate steps to minimize any loss for their employees and ensure all redundancies are genuine.
To read more about what processes a company should follow before making employees redundant see, here .
Unfortunately, redundancy entitlements under the National Employment Standards do not apply to small businesses workers. This means that employees who work for a company with less than 15 employees and have no other contractual rights to redundancy payments are only permitted to notice entitlements. Additionally, employees who work on a genuine casual basis are not eligible to any entitlements.
The COVID-19 lockdown measures will remain in force until at least 13 April 2020 meaning that redundancy entitlements will likely not cover many employee’s during their period of unemployment
ALTERNATIVE OPTIONS
In such an unprecedented time, employers and employees can consider find alternative approaches to reduce the amount of jobs lost to redundancy. Alternative approaches include:
- Redeploying staff to other roles or businesses;
- Encouraging staff to take annual leave or long service leave, including at reduced pay;
- Implementing a reduction in hours;
- Offering unpaid leave;
- Reducing remuneration or benefits; or
- Temporary layoffs.
ENCOURAGING ANNUAL LEAVE
Employers are entitled to direct employees to take annual leave where the request is reasonable. This is usually in situations where an employee has accrued excessive annual leave or when an employer’s operations are temporarily shut down.
However, and employer and employee can agree for the employee to take annual leave at any time. Accordingly, if an employer is considering redundancies it can offer annual leave as an alternative.
ALTERING TERMS OF AN EMPLOYMENT CONTRACT
It is illegal for an employer to change the terms of an employment contract without consent from the employee. Specifically, it is an employer’s obligation to consult their employees before altering any essential terms which include hours of work, rate of pay or employment benefits.
Employers should consult their employees on the provisional changes that they may wish to make, invite employees to give additional recommendations and consider the impacts any changes may make to their employee’s wellbeing.
Due to the severity of COVID-19 and potential liquidation of many businesses, employers and employees may consider temporary changes to employment agreements. Such an arrangement would need to be in writing and agreed upon by both parties and not provide the employee with conditions less favorable than their minimum entitlements.[1] These could include temporary changes to an individual’s rate of pay, employment benefits or hours of work which may make a difference to a company’s overall survival during this period.
REDEPLOYING STAFF OR TEMPORARY LAYOFFS
Many companies are required to make structural changes and if reasonable redeployment within the company is unavailable, businesses should consider offering redeployment to alternative positions (unrelated to their current role) or redeployment to other companies with the capacity to take on new employees.
If an employee has a stand down clause within their Enterprise Bargaining Agreement or contract of employment, employers are obliged to abide by those terms. To read more about stand down procedures see, (attach link for Steph’s article).
Alternatively, redeployment to other companies may be provided as an option for employees to elect. This involves the relevant negotiations between companies to redeploy individuals to areas that are in high demand. This option was exercised by a United Kingdom theatre and a local city council who worked together to provide 200 theatre employees with new positions in the local council.[2] While many of the theatre employees will be required to carry out duties unrelated to their initial contract, this means that employees are still able to receive a steady income and potentially return to their positions following the lockdown.
[1] https://www.fairwork.gov.au/How-we-will-help/templates-and-guides/Best-practice-guides/use-of-individual-flexibility-arrangements
[2] https://www.thestage.co.uk/news/2020/coronavirus-eden-court-to-redeploy-staff-in-community-roles-as-part-of-council-tie-up/