IS YOUR BUSINESS EXPERIENCING A DOWNTURN IN DEMAND? 

  • The federal government has introduced an economic support package which provides assistance for small business to keep people employed until the coronavirus crisis (‘COVID-19’) has passed.

DO YOU NEED TO STAND DOWN YOUR EMPLOYEES?

IF YES, ARE YOU RESPONSIBLE FOR THE STOPPAGE OF WORK?

  • If YES, i.e. if you are responsible for the stoppage (or it is as a result of a downturn in general economic or trading conditions), stand down the employee with pay.
  • If NO, i.e. you are not responsible for the stoppage, for example, because the Government has mandated the shut down of your business, then stand down the employee without pay. You may choose to pay your employees during a period of stand down, but this is voluntary under these circumstances, it is not an entitlement (see section 524 of the Fair Work Act 2009 (Cth)

Initially, some business Managers will take the view that there is not enough or no work available for some employees and limited work available for the other employees of the business. In circumstances such as these, what should a manager do?

  • Talk to the employees who do not have enough work and introduce these changes to them and explain the likely effect of these changes and inform them that they may be stood down with or without pay.
  • Talk to employees that have some work available and see whether they are prepared to reduce their working hours. If so, implement the reduction in working hours by giving notice to the affected employees, discuss the introduction of changes and the likely effect of the changes and any measures that have been adopted to avoid or reduce the adverse effects on the employees. Ensure that the new arrangement is documented in a separate agreement so there is no uncertainty or dispute later on about the new deal.

IF STANDING DOWN YOUR EMPLOYEES IS NOT AN OPTION, CAN YOU EMPLOYEES BE USEFULLY ENGAGED IN SOME WAY DURING THE COVID-19 CRISIS?

  • If NO, do you need to terminate some employees?
    • The dismissal will be attributed to redundancy as it occurred not on account of any personal act or default of the employee, but because you no longer wish the job the employee has been doing to be done by anyone.
    • The redundant employees must be provided with all the minimum entitlement on or before the last day of their employment. These entitlements will include their accrued unused leave, notice period, and the redundancy pay as per the National Employment Standards (“NES”).

NOTE: With regard to notice, look at the employment contract or the NES whatever is the greater:

Period of continuous service Minimum notice period
1 year or less 1 week
More than 1 year – 3 years 2 weeks
More than 3 years – 5 years 3 weeks
More than 5 years 4 weeks

Redundancy / Severance as per the NES:

Period of continuous service Redundancy pay
At least 1 year but less than 2 years 4 weeks
At least 2 years but less than 3 years 6 weeks
At least 3 years but less than 4 years 7 weeks
At least 4 years but less than 5 years 8 weeks
At least 5 years but less than 6 years 10 weeks
At least 6 years but less than 7 years 11 weeks
At least 7 years but less than 8 years 13 weeks
At least 8 years but less than 9 years 14 weeks
At least 9 years but less than 10 years 16 weeks
At least 10 years 12 weeks*

What to do next

Call us on 1300 88 23 86 and talk with one of our experienced and friendly lawyers.