Finding ways to continue delivering services while subject to social distancing has led to the most significant changes to employment since the second World War. While being forced to work from home has had its challenges, the most difficult ones facing employers may be around what measures they need to take for their business to survive and how that impacts on retaining staff.
However, on the assumption that:
- life will return to normal at some point, and
- no one wants to lose good staff, but
- the financial reality means that your company must look at all measures available in order to stay viable,
it is important to look at options and opportunities. However, not all of them will be applicable, and you may need to seek legal advice before being particularly creative.
Employers and Employees Eligible for JobKeeper Payment
The JobKeeper Scheme has revolutionised the employment landscape. Not only does it provide money to retain staff, it provides money for employers to retain staff who have no work available to them. In addition, the Fair Work Act has been amended to allow previously unheard of flexibility for an employer in relation to those employees who are receiving the JobKeeper Payment.
The JobKeeper amendments to the Fair Work Act allow the following actions:
- directions to reduce hours and days of work – including standing down employees without pay (other than the JobKeeper Payment)
- directions to change usual duties or work location (this must be reasonable and it is reasonable for the employer to believe that the direction about duties or location is necessary to continue the employment of one or more employees)
- agreement to work different days and times (an employer can request and an employee cannot unreasonably refuse)
- agreement to take annual leave (the employer may request and the employee cannot unreasonably refuse, although a minimum of two weeks’ annual leave must be retained), or take twice the amount of annual leave at half pay.
This new flexibility is restricted to employees who are recipients of the JobKeeper Payment and at this point the JobKeeper Payment and the Fair Work Act changes are only available until 28 September 2020.
Words of warning were sounded in a recent article by Corrs Chambers Westgarth that points out that employers embracing the JobKeeper Payment should first consider whether a record that a company continued to incur debts after acknowledging a 30 per cent or 50 per cent drop in turnover may be damaging in subsequent litigation and, for listed companies, applying to the scheme (and acknowledging the relevant drop in turnover) is likely to be market-sensitive information that must be disclosed.
Employers and Employees Not Eligible for JobKeeper Payments
Where an employer does not claim the JobKeeper Payment for an employee, any changes to an employee’s duties, hours and conditions, will still need to be navigated through existing legal frameworks including Awards, Enterprise Agreements, and each employee’s contract of employment. As well as the JobKeeper scheme, the Fair Work Commission and governments have been making ongoing changes to improve flexibility, so it is very important to stay up to date with any changes.
Almost all Awards, except those in mining, construction and maritime services, were amended on 28 March 2020 to provide for:
- 10 days of unpaid pandemic leave
- the ability to take annual leave at half pay for twice the period of annual leave.
The Clerks (Private sector) Award was amended in mid March with temporary changes to operate until 30 June 2020 that include the ability of employers to direct employees to move to alternative duties (without loss of pay), reduce minimum shifts, and direct them to take annual leave with only one week’s notice. Ordinary hours can be reduced by up to 25 per cent where agreed by staff following a vote.
The Awards relating to retail and hospitality were also amended to increase flexibility.
Employees Covered by Enterprise Agreements
The Fair Work Act Regulations have been changed to slightly expedite the rules for changing Enterprise Agreements midstream, but they are still rather onerous. Compliance with Enterprise Agreement conditions relating to stand downs and changes to hours, duties, and location is still required, although the Individual Flexibility Arrangements (IFA) within all Enterprise Agreements may provide an opportunity to negotiate changes with individual employees. Remember that the “better off overall test” will still apply so that the IFA does not leave the employee worse off than if the Enterprise Agreement condition/s were followed, although it may be argued that reducing hours or changing duties will still leave many employees better of overall than losing their job in the middle of what looks like a recession.
The Fair Work Commission is expediting hearings in relation to changes to current Enterprise Agreements.
Stand down Provisions
The Fair Work Act provides that standing down staff – directing staff to take leave without pay – is only permissible where there is a stoppage of work and the employee cannot be usefully employed as a result of something for which the employer cannot reasonably be held responsible. The most recent advice from the Fair Work Ombudsman has broadened the reasons justifying a stand down to include (and they specify that this is not an exhaustive list):
- the business has closed because of an enforceable government direction relating to non-essential services (which means there is no work at all for employees to do even from another location)
- a large proportion of the workforce is in self-quarantine meaning that the remaining employees can’t be usefully employed
- there’s a stoppage of work due to lack of supply for which the employer can’t be held responsible
- a “qualified employer” is using a JobKeeper enabling stand down direction in accordance with the new temporary JobKeeper changes to the Fair Work Act.
The Fair Work Ombudsman also points out that employers cannot generally stand down employees simply because of a deterioration of business conditions or because an employee has COVID-19. Employers are warned to exercise this option with care as employees may apply to the Fair Work Commission to challenge the stand down direction and seek any unpaid wages.
An employer must consider the availability of alternative duties to which the employee may be reassigned; employees should not be stood down if they can be “usefully employed” by being provided with alternative duties. Consulting with staff is an important step in finding alternatives to stand downs, as well as being a required step in many Awards and Enterprise Agreements prior to initiating stand downs.
Where an employer is unable to provide sufficient work for permanent staff, one option is for the employee to agree to take paid or unpaid leave. This is an option both where there is no work at all for an employee or where there is still some work for an employee but not enough for their full day or shift.
The conditions for directing staff to take leave or staff opting to take annual leave, long service leave, or leave without pay, are subject to the Fair Work Act and state/territory long service leave legislation, as well as applicable Awards and Enterprise Agreements.
The recent decision by the Fair Work Commission amending most Modern Awards to enable annual leave to be taken at half pay for twice the duration provides additional flexibility.
Using an employee’s accrued long service leave to cover periods where work is not available, is not as easy, as legislation in each state/territory provides that the employee must have worked for a lengthy period (five years, seven years or even 10 years) before they can access any pro rata long service leave. However in the last few weeks the New South Wales Long Service Leave Act was changed on a temporary basis as a response to COVID-19, allowing long service leave to be taken with a much shorter notice period as well as in shorter blocks (one day at a time) where this has been agreed between the employer and the employee. The Victorian Long Service Leave Act already allows for long service leave to be taken one day at a time, or for twice as long as the period to which they are entitled, at half their ordinary pay.
It is also worth discussing with employees whether they would prefer to take leave without pay for the balance of time when they cannot be gainfully employed, for example, where they need or want the time to care for children who are not at school or childcare.
Changes in Hours
Some staff may welcome the opportunity to reduce their hours temporarily or move to part-time work to be with children who would normally be in school or childcare. The added benefit is that, if staff who are fully employed wish to reduce their hours by moving to part-time, the slack could be taken up by job-sharing with staff who are not fully employed.
Changes in Duties
Providing alternative duties for employees where the employee’s role is completely surplus to requirements or where their duties are no longer sufficient to maintain their original hours of work can be an excellent way of building skills and sustainability by having a number of people able to perform particular functions and roles– which is particularly important should key people become ill.
Where the employee is not subject to a JobKeeper Payment, duties can also be changed but in the case of permanent staff, this is subject to any restrictions in their applicable contract of employment, Award, or Enterprise Agreement. However, much can be achieved if this is done in consultation and by agreement with affected staff.
The usual requirements still apply when assigning new duties: the employee must be able to perform the work safely, and it must be within their capacity, expertise and any necessary qualifications/licensing/registration requirements. Staff may require further training and supervision to enable this to be done successfully. Naturally, any Working With Children Checks or equivalent must also be observed.
Rates of pay may need to be considered in relation to casual staff who may be asked to perform work which attracts a lower pay rate.
Where staff have the ability and now have the time, this is an excellent opportunity to complete those projects which were ‘nice to have’ but for which there was no time during ‘normal’ times. This could be an excellent time to develop online registers such as risk registers, compliance registers, chemical registers or hazard registers. This is also a good time to conduct audits, such as an audit of the personal information collected and retained by the company, reviewing processes or policies and reviewing and cataloguing records. It is also a wonderful opportunity to go through the mysterious boxes at the back of the storeroom to see if they contain useful information that should be converted into electronic format or shredded.
Perhaps the most positive way of using spare time is looking at areas of professional development that would assist the organisation and its staff to better meet the needs of the future. This can be done strategically so that future needs, including when resurfacing after COVID-19, can be workshopped and planned.
This is also an opportunity to discuss expanding the skills and duties of some staff which may improve their longer-term career prospects as well as benefiting the organisation. The JobKeeper Scheme is a particular boon as employees who cannot be gainfully employed will still be paid until business picks up, so they have time to undertake upskilling/cross-skilling which may not have been possible under normal busy conditions. Online courses, both short and long, are becoming more prevalent as more and more organisations adapt to the COVID-19 restrictions and opportunities.
Interim Final Thoughts
COVID-19 has forced the most dramatic review of how we conduct our work. Not only do we have to manage the challenges of finding creative ways of delivering our services within the restrictions of social distancing and dire financial pressures, but also find ways to navigate the needs of individual staff members who themselves may be balancing hugely changed working conditions while simultaneously supervising their own children, all while ensuring they have enough toilet paper.
As with all disruptive events, there are opportunities. Some staff will welcome reduced hours because this will give them more time with families or their hobbies. Some will welcome the opportunity to learn new skills or take on new duties that they would not otherwise have had the chance to do. This won’t work for everyone but it is enough to start a conversation which could lead to better outcomes now and in the longer term.