Following on from last week’s update, this article explores the alternatives to “stand down and stoppage of work” if your business is not in a position to do so.
Agreed reduction in hours and/or pay
You may agree with your employees (or individual employees) for a reduction of hours or days worked (and an associated reduction in their wage) or to a pay cut (with the same hours continuing to be worked). For casual employees, a reduction or variation in hours can be done without agreement, provided the variation is within the terms of the employment contract and relevant Award or enterprise agreement.
For those covered by the Hospitality Award, the Fair Work Commission has very recently approved changes that provide for this type of reduction, including that annual leave will continue to accrue at the previous number of hours.
Agreed paid annual or long service leave
You may agree with your employees for them to access their paid annual or long service leave during this time. Some Awards also provide for an employer to direct its employees to take annual leave in particular circumstances.
As with stand down, employees will continue to:
- accrue their leave entitlements during this time;
- be able to access their personal leave entitlements (provided they comply with the notification requirements); and
- maintain their entitlement to public holiday pay.
Agreed unpaid leave
You may agree with your employees for them to take unpaid leave during this period. You should carefully consider whether there are any provisions in your Award, enterprise agreement or individual employment contracts that may impact on the process of doing so.
As with paid leave, employees will continue to accrue their leave and public holiday entitlements during this time however the usual obligations on an employee (such as notice requirements) remain in place during this time.
So what happens if your employees will not agree to any of the above options and stand down is not available to you?
For full time and part time employees, if a role is no longer required to be performed by someone then an employer may commence the process of making that role redundant and terminating the employment of employees. Employers should ensure that they follow the notice provisions in the relevant Awards, and make the appropriate payments (both notice and severance payment). These amounts and process will differ from employee to employee depending on the role they provide and the duration of their employment.
Generally speaking an employer with less than 15 employees will not be required to make redundancy payments, however, payment of the relevant notice period and any outstanding entitlements is still required.
If an employer is unable to pay the redundancy payment, an employer may make an application to the Fair Work Commission or the Western Australian Industrial Relations Commission to reduce the specified amount. Alternatively, an employer may not be required to pay the redundancy amount if you are able to obtain other acceptable employment for the employee.
Termination for misconduct or underperformance
Employers continue to maintain their right to terminate (or take other disciplinary action against) an employee for misconduct or as a result of underperformance, however, we would strongly advise employers to seek legal advice before doing so to avoid any risk that an employee may claim they more properly should have been stood down or made redundant.
HHG Legal Group can assist
For over 100 years HHG Legal Group has been proudly serving Western Australian families, business and individuals. Never before has the State seen such a crippling time for many small businesses and we are committed to supporting the communities in which we operate. If you require advice relating to your obligations as a small business employer in the time of COVID-19, or have any other employment law queries, we are offering unprecedented initial consultation fees to assist in these challenging times.
You can send us an enquiry to book a virtual meeting with an employment lawyer or call us on 1800 609 945.