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SESSION 1: LIVE Q & A 
COVID-19 Obligations.

With everything going on, it’s normal to feel unsure about what your obligations are as an employer. To help answer some of those worries, your hosts and industry experts will talk through:

  • Employees’ rights to leave and pay 
  • Employer duty of care when employees are working from home
  • Forced redundancies
  • Forced stop-works and;
  • Will also be answering your questions live.

Watch now.

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Meet the Masters

Ben Thompson

Ben Thompson is the CEO and founder of Employment Hero. He is an employment laywer, a businesses owner and has well over 20 years experience in the Australian employment landscape. A self confessed geek, Ben has boundless curiosity, enthusiasm and ambition. He thrives on creating innovative solutions, industry firsts and disruptive offerings that redefine markets.

 

Simon Obee

Simon Obee is the Principal Lawyer at EI Legal, General Counsel & Head of Professional Services at Employment Innovations. He has over 15 years experience as a lawyer in the employment law space - he is an absolute power house when it comes to understanding employer obligations and navigating the complex Australian employment laws.

 

Transcript

Ben (00:00:01):

 

My name is Ben Thompson on the CEO and founder of Employment Hero. I have Simon Obee with me. I'll introduce him again in a moment. Thank you for joining our webinar. It’s difficult times and Employment Hero and Employment Innovations have come together to look after the community or to look after our community, HR professionals, employers and payroll professionals. We realize that the situation is incredibly fluid. So we've received hundreds of questions, literally five or 600 questions in the days prior to today. And so I have gone through those questions and attempted to get down to the ones that we think we can answer best. But as recently as half an hour ago, we were still adjusting answers based on the information coming from the government about shutdowns and schools and that type of thing. So this is very fluid.

 

This will be the first in a series of events to answer questions. I think everyone realizes that there's so much uncertainty. The more that we can answer the questions that people have, the better for everybody. So we'd like to keep these sessions happening and keep you informed as best we can. Employment Hero and EI are happy to put these sessions on and we'll bring in any other ways that we can to answer the questions, keep people informed. But for now I'll introduce Simon and we'll get into the answers that we have. Simon is the Head of Professional Services at Employment Innovations and is responsible for the teams that provide workplace advice and outsourced HR services. He's also the principal lawyer at EI legal, a law firm focused solely on providing advice and representation to clients on employment law. Welcome Simon. 

 

Simon (00:02:30):

 

Thanks Ben. Good morning.

 

Good morning to everyone who's joining us today and a warm welcome to all of our clients. As Ben said, we have been receiving an unprecedented amount of questions about the current situation with coronavirus. And thank you to our clients for being patient with us during this time, if we're taking a bit longer than normal to get back to you. The big bit of news in the last 24 hours has been the announcements about certain types of businesses being ordered to close down and from midday to today. So we'll be talking a lot about what that means for those businesses in terms of their obligations and to their staff and how to handle that.

 

We'll also be talking about other businesses. I have to note within those groups, what are the rights and responsibilities at this time? Are they able to ask employees not to come to work and they reduce employees hours, that kind of thing. We'll talk a bit about redundancy. If there's time and also with the potential for schools closing and we'll also talk about employer's obligations to staff who might need to take some time off to look after the children. If there's time at the end, we'll try and get to some of the questions that you can ask through the chat function. 

 

Ben (00:04:45):

All right, thanks. We might kick off with that first question then. So the government has ordered that many businesses cannot open. What does this mean for the staff or for those employers? 

 

Simon (00:05:05):

 

Yeah, thanks Ben. So, the government has, as I'm sure most people have seen from midday today, a number of businesses nationwide must not open, including registered and licensed clubs, licensed premises in hotels and pubs, but not the accommodation side of hotels, to close. Entertainment venues, cinemas, casinos and nightclubs. Restaurants and cafes will be restricted to take away and delivery services. Indoor sporting venues including gyms will have to close as well as places of worship. And with what we're expecting that could be wider spread restrictions on other businesses opening that will be announced in the coming days. So a lot of what I'm going to talk about now it's potentially relevant to businesses affected now. 

 

Simon (00:06:23):

 

And the big question is what happens when businesses have to close their doors in these circumstances. What do they do with their employees? Is there an obligation to keep paying them? And the short answer to that is no, but i’ll unpack that more now. And obviously everything that I'm saying is, essentially, it's general in its nature. And if you have any kind of concerns or a query, if you should obviously seek your own professional advice. 

 

Simon (00:07:36):

 

How the law operates in this area, in non emergency times I suppose, there isn’t an ability to say to permanent employees ‘we don't want you to come to work and not get paid’. But in emergency situations, in times like this, that is an exception under the Fair Work Act, which enables employers to do what's called stand down permanent employees, which is the ability to ask them to remain away from work and there would be no obligation to pay them. I should stay full for casual employees, the situation is, is most straightforward in a way. If you have any casual employees in your workforce, it's generally open to the employer to roster them on as, as when they're needed. In a situation like this where the government is saying to your business, you can't open your doors, you would just not offer casuals more shifts, but for permanent employees going back to them the Fair Work Act, allows you to stand down employees without pay.

 

But there are a couple of criteria to satisfy. But the first is that there needs to be a stoppage of work for reasons outside your control. And that clearly would apply in a situation where the government is saying to your business, you can't open your doors and that's clearly a circumstance outside the employer's control. The other criteria is that if you are asking employees to remain away without pay, there must be no useful work that you can get them to do within the business. So for lots of businesses, this will be fairly kind of an easy question to answer. I suppose if you have a Barman and bar person and your pub can’t open, there's probably going to be limited other work. You could get other employees that might be potentially to work from home or work from a different location.

 

If there is other work you can provide them, then you should do so. But for many businesses it will be fairly clear when they’re told to shut the door to the gym, or the hotel or whatever the business is, that there aren't going to be roles for the employees to perform. That gives you the right to stand down employees, which is in essence a right to temporarily require employees to remain away from work without pay. Obviously, if you are able to pay employees this time, you can come to those sorts of arrangements. But, for a large number of employers that can find themselves in the unenviable place of sending employees home, I expect you’ll be saying you'll be unpaid for this period.

 

Ben (00:10:44):

 

So just to, just to clarify and list questions in the Q and A section, which I'm sort of trying to address here. If you own a business and it's covered by the list of occupations that the federal government has stated must shut down, then you are automatically entitled to use the shutdown provisions under the act. But if you're not included on that list and you decide to shut down for some other reason, then you most likely would not be able to rely on the shutdown provisions under the fair work act.

 

Simon (00:11:34):

I'm not sure I'd put it as you have an automatic right to be able to stand down employee to feel on that list because you would still need to, not satisfy yourself that you couldn't give the employees any other work. You couldn't get them to work from another location. You couldn’t get them to work in a part of your business, which isn't perhaps closing down that sort of thing. But it is fairly clear that if you can't give the employees some other meaningful work to do, if you're on that list, you're going to be entitled to stand down employees without pay. The second point is the other businesses who aren't on that list who are obviously severely impacted by coronavirus, does that give them the right to stand down employees and the short answer to that is no, and this was going to be one of the questions that we were going to address later in the webinar.

 

As it's come up now, I'll address it now. A lot of businesses are finding themselves in a situation where coronavirus is obviously having a major impact on the business, they’re not as busy as they used to be. If we think of, say a retail shop, that type of business is not on the list at the moment of businesses who have to close. You might be finding yourself having a severe downturn in trade, you know the people aren't on the streets, people aren't coming into shops to buy. Does that give you a right to stand down employees? And the simple answer to that is generally it's not going to. The law has consistently differentiated from between a downturn in business that is admittedly caused by circumstances outside of your control and one where there's a stoppage of work and if you're in the category where there's been a downturn of business but it's caused by coronavirus, that's generally not going to allow you to, to stand down employees without pay. If you're in a type of situation where your doors can't open because of some directed from the government, that is going to be a stand down situation. And I suppose if you're a business that's in the category of having a downturn in work and that meaning that you are struggling to continue to employ the same level of staff or continue to provide your staff with the same hours or pay, you're really looking, I suppose at trying to come to an agreement with those staff to take a period of unpaid leave, to reduce their hours or to reduce their pay, those sorts of things. If you can get agreement from the staff, then generally you have a great amount of flexibility for what measures you introduce, but there's no kind of general right in those circumstances to stand on employees to put them on unpaid leave or to reduce hours or reduced pay.

 

Ben (00:15:32):

Okay. Thanks Simon. I think another couple of technical questions that have come through the Q and. A, if you do stand down, are employees entitled to their paid annual leave, long service leave, other paid entitlements whilst they're stood down? And there was a supplementary there around public holidays as well. So maybe you could just outline if a company is standing down its employees, what paid entitlements are employees entitled to?

 

Simon (00:16:06):

Yeah, that's a really good question and one that has come up a lot. In terms of paid leave and entitlements, which is governed by the Fair Work Act - so annual leave, personal and carer's leave or some people refer to it as sick leave and public holidays, everything I suppose apart from long service leave, which is state based, is governed by the Fair Work Act. The Fair Work Act is pretty clear that when an employee is stood down, they still have access to those paid leave entitlements which are governed by the Fair Work Act -- so principally annual leave, personal/carer's leave and public holidays. So what that means practically is when an employee is stood down, if they are sick themselves or they need to use carers leave to look after a sick member of their family or household or to take care of a child or something like that.

 

That is subject to the normal rules about satisfying the employer that that requirement is genuine, such as medical certificates, etc. Annually leave is also available to employees who've been stood down. Annual leave is slightly more complicated in the sense that  employers have a right to refuse requests for annual leave if that refusal is reasonable. So often that would come up in a normal working arrangement and an employee might ask for annual leave without giving you enough notice or, or you might have three employees who want to take annual leave on the same day and you can't accommodate that because someone needs to be there to man the reception or open the shop or whatever it might be. 

 

The questions that we're getting asked in the current scenario is if a business needs to stand down employees, and employees want to take that annual leave because they want to get paid. If a business has difficulties in being able to have the money in the bank to pay a large group of employees who want to take annual leave at the same time. Is that a reasonable reason to refuse employees taking annual leave? And, and I don’t think that question has really been completely clear. We would hope there would be some guidance from the Fair Work Ombudsman in the forthcoming days about refusing annual leave in those circumstances. But I suppose that the general point is if employees want to take annual leave during the period of stand down and you can make that work and then you should, you should let them do it. If long service leave for employees during periods of stand down. The requirements for how employees have to take long service leave sort of varies from, from state to state. So it’s more general about that, but that is it's still available, available for employees to take. The last point was public holidays and equally when the Fair Work Act it was, it was made clear that employees still got the benefit of public holidays when they were stood down. So coming up with Easter, if employees would have ordinarily worked on a public holiday, but they are stood down for example, they would be entitled to be paid for those public holidays.

 

Ben (00:21:03):

Great. Thank you. So I think we should just move to the next question that we had lined up, which is how should I communicate to my employees that they are being stood down?

 

Simon (00:21:16):

Yeah. This is an interesting question that the Fair Work Act doesn't provide any guidance on that. So really vicious. It's kind of more of best practice advice. But I would've thought if, if an employer is communicating to its staff and it needs to stand them down, you're gonna want to make clear that you're doing this as a direction from the government. I think you want to make clear that the employees are still employed and they haven't lost their job. You might want to also say this is a temporary measure. And I think if, if you are in a situation where you're not going to be able to offer the employees any pay during this period, you want to make that clear. I would try and use in the messaging this is a stand down and I would try and use that language of stand down so that if employees want to look up what their rights are and be assured that what you're doing is, is something kind of proper and they're going to be able to do that just by looking up, stand down on the Fair Work website, etc. 

 

Ben (00:22:50):

I think it raises another area where we can help. So we might try and get a template letter and list that on the Employment Hero and Employment Innovations websites as a template that people can access. We'll get that up there as soon as possible. Just as a piece of guidance. We've also got polling's running during today's session, I'm going to launch the first poll and as we move to the next topic, if you can have a look at that poll and give us your answers and then we'll just see how many people are affected. So the first poll should be up on your screen now 

 

“Is your business included in the list of businesses that must not open?” 

 

And just while you're answering that I am going to get Simon to move to the third topic, which is - if I have to down employees, can they still access paid leave? So we've actually covered that off already. You can access it but you do have the right to refuse to pay it if your reasons are reasonable. And, and there's no real guidance about what is reasonable. 

 

Ben (00:24:18):

 

Okay. I've just cut off that poll now and we can see that on the call we'd have about a thousand participants on the call. And about 92% of them aren't affected by stand down by the stand down arrangements and, and prohibited businesses. 8% are affected. So good to say at this stage that most of the people in the call can still continue operating. And yeah, let's hope it stays that way for as long as possible. So then the next point, Simon is can I require employees to take leave during the stand down? I think there's been a number of questions cause they're about 130 questions lined up, but can I require employees to take leave either during the stand down, but even even now maybe if we can sort of broaden that a little and talk about how the options that businesses might have to run to require employees to take leave and get some of that off their balance sheet.

 

Simon (00:25:18):

This is a question that's come up a lot. I guess principally we're talking about annual leave here. Whether or not an employer can require an employee to take annual leave and will be dictated by whether a modern award or enterprise agreement applies to the business and I'm sure that everyone will know a modern award is, is a set of industry or occupational specific rules that apply to the majority of employers in Australia. Which, yeah, it's dictated by the industry you're in or the occupations that your employees are in. Modern awards and contain provisions or most modern awards and contain provisions and detailing when an employer can require an employee to take annual leave. Most of them, where they do have an ability for an employer to require employees to take annual leave, will have some rules about the notice that must be given to employees. They might say that you can require them to take annual leave. 

 

I think most, if not all modern awards also have provisions about requiring employees to take annual leave when they have excessive leave, which is generally defined as eight or more weeks of accrued leave. So it's important to check what your award says about requiring employees to take annual leave. If the award is silent on that question, then you're not going to be able to force an employee to take annual leave. If you're not covered by an award or your employees are not covered by an award, then the test is whether it is reasonable or not to make that requirement of an employee. That I suppose is going to depend on a number of factors including how much leaves they've accrued, how much notice you give them and the requirement.

 

Simon (00:27:58):

One would think in the kind of circumstances we’re facing, an employer would have a good argument that requiring employees to take annual leave at this time would be reasonable. I suppose the other point to remember of course is as, as I said sort of earlier, if you can come to an agreement with your employees about taking annual leave, then that is the best way to approach things. And if you can come to an agreement, whether the employees are award free, covered by an award etc - if you have their agreement do to that, you can basically do what you like really. And so you know, maybe this is the time to be having those kinds of difficult conversations with employees about the need to ensure businesses future viability and maybe that involves them taking leave this time. Long service leave and agains the varies from state to state. So a lot of the long service leave legislation does have an ability for employers and employees to come to arrangements about when the leave is taken. But you would need seek some sort of bespoke advice about that depending on where you're based in the country. 

 

Ben (00:29:42):

The next poll leads into this next topic, which is can I reduce my employees hours or wages because of the impact that coronavirus is having on my business? Look, I know that a lot of people on the call will need to adjust their cost base, obviously attempting to retain as many of their employees as possible. But maybe you can talk us through, can I reduce my employee's hours or wages because of the impact that coronavirus is having on my business. Simon, can you sort of address some of the more flexible arrangements that were saying people take in terms of four day workweeks and things like that. What, you know, what's possible?



Simon (00:30:34):

The question about whether you're going to be able to reduce hours, at least it's going to be impacted by what type of employee we're talking about. Casuals, as I said earlier, you have an ability as an employer really to choose when and when not to offer those employees work. So with casual stuff, you have a great degree of flexibility in that regard. The permanent employees, say part time and full time employees, have the ability to reduce hours generally the answer is you can't do that without the employee's consent. They have a guaranteed number of hours and you can't reduce that without getting their agreement. It is important though to check the terms of the modern award that applies to your business because there is sometimes a bit of flexibility regarding reduction of hours, particularly awards which cover the hospitality sector, particularly for part time employees. But yeah, there are provisions which allow kind of flex up and flex down of hours as long as that is within the range of guaranteed hours the employee's are given. But for the vast majority of employees, the answer about reducing and or varying hours is going to be that you can only do that with employees agreement. Similarly with a pay reduction, that is only going to be possible with the agreement employees. 

 

A lot of businesses that we’ve been speaking are approaching this in an open and consultative way with employees and having conversations along the lines of -- if we can't together reach an agreement about how we're going to cope with the the adverse impact that coronavirus is having on our business, then there's a question whether the business will be able to survive, whether they employees and jobs will be able to continue. If you're open with your employees and are able to have those kinds of conversations, it might well be that the workforce as a whole or at least large portions of it will be open to a temporary reduction in hours or, or a temporary reduction in pay if it's expressed in a way that this is business for the greater good and this is to safeguard your jobs going forward. This is to avoid, what is the last resort of the employees being made redundant. So yeah, a lot of our clients are having to have those difficult conversations. 

 

Ben (00:34:35):

Just before you get into those measures, I will share the results of that poll, which showed that 70% of people on the call are contemplating reducing labor costs immediately or within the next three months. So, you know, a very large proportion of the people here are considering that. The point you just made about having the ability to have the conversation with your employees. It's, it's likely to present another question which is, you know, hopefully the vast majority of businesses can enter into a discussion with their employees and make all attempts to preserve the business and as many jobs as possible within the organization. What is the next alternative? I guess if employees refused to make adjustments to salary or hours, does that only really leave redundancy? And then we might as well talk through the redundancy process and issues. So maybe if you can talk about the alternatives to redundancy, the flexibility that we've seen and then we'll move on to how to manage those cases where the redundancy might be necessary.

 

Simon (00:36:08):

I suppose the alternative to redundancy in measures that we were saying people introduce, to try and to avoid that sort of thing -- reduction in hours. So seeing businesses opt for a nine day fortnight and for example, a shorter working day across the days that the employees normally work and the corresponding reduction in pay. I've seen businesses implement a percentage pay cut across an entire business. Where that's worked best has been a kind of uniform thing and saying across all levels of staff from management down. That’s obviously an easier message to deliver if you’re saying this affects us all. 

 

Simon (00:37:22):

You could look at various different arrangements of commission and bonuses and those sorts of things to keep the money going out as a minimum. Bans on overtime to the work that, those sorts of things. There is a wide number of options available. I think in very simple terms the options for avoiding redundancy really fall into three buckets. And it's a reduction in hours with the corresponding production in pay. It's a reduction in pay, but everyone's still doing the same hours, or it’s an agreement that employees take a spread pay cut and reduced working hours. The alternative to that is ultimately letting people go and that would be a redundancy situation. 

 

Simon (00:39:30):

The summary is if you're trying to avoid redundancies, which is the option of last resort. I think you've got kind of three options for reducing, labour costs. There is a reduction in hours for your employees with the corresponding reduction in what they're gonna get paid. A reduction in pay while people continue to do the same hours. Ie, everyone's pay is reduced by 20%. Or there is an agreement that employees take unpaid leave. So any of those three options are completely lawful and unproblematic if you can get employees to agree to them.  But it is much more difficult when you can't get that agreement. So talking about, the last resort. Redundancies. How does that operate? What are your obligations to employees if you go down that route?

 

Simon (00:40:49):

So I guess just in kind of very simple terms, redundancy is a situation where you no longer require a role to be performed by by anyone. And that that often arises in situations where there is a downturn in business. You don't have the same requirements or the same number of staff. If you're facing that situation then redundancy is one regrettable outcome. As an employer there is generally a process you should follow when implementing redundancies in order to safeguard your business from legal claims. A redundancy is a termination of employment and course, and like any termination of employment, those kind of risks that go along with that. So it's important to follow a redundancy process which involves before making the decision to let an employee go, having a process whereby the employee is consulted and that any alternatives to redundancy are explored.

 

Simon (00:42:26):

We have some guidance on our website, on the Employment Innovations website under resources where we have a free checklist for redundancy process. It's a relatively simple process whereby, you’re putting employees on notice that their risk of redundancy, you're consulting with them to find out whether there's any ways to avoid it. And that would usually be the employee agreeing to unpaid leave or a reduction in hours or pay. And you also have a duty to consider any redeployment options within your company or any of its associated entities. It might well be there are no alternative vacancies and alternative roles an employee can perform, but you've got an obligation to to consider those. And at least an obligation to do that if you’re going to avoid a claim of unfair dismissal. 

 

Simon (00:43:32):

If you get through that consultation process and the ultimate decision is that an employee is going to be made redundant, then depending on the employees length of service with the company, and depending on how many employees you have, the employee may be entitled to a redundancy payment. So the general position is that, if the employee has less than 12 months service with the business, then they're not entitled to a redundancy payment. Although that general position can be altered by the provisions of the modern award. So it's important you check that. As a general position, if the employee has less than on year service, unless you're covered by an award with different provisions they won't be entitled to a redundancy payment.

 

Simon (00:44:51):

Also the general position is if you have less than 15 employees in your business, including any associated businesses, there is an exemption from paying redundancy pay. Again, it's important that you look at the terms of any modern award or enterprise agreement that might apply which might have some more generous provisions. That would be the general rule. Redundancy pay isn't available to apprentices who are being let go at the end of the apprenticeship or fixed term work. The other point to remember, redundancy is, as I said, a termination of employment. So employees will be entitled to notice as well. So, a period of notice based on the length of service or payment in lieu of notice. I think that's probably all I need to say about redundancies 

 

Speaker 1 (00:46:18):

Thanks Simon. I think another template that we'll try to get onto the Employment Hero, resources and Employment Innovations resources today, is a template agreement for reduction of hours and reduction of salary, just to give people a guide and some type of template. Another question that is coming up, Simon, and as you started to answer this, I'll launch our third poll. With this morning's announcement from the New South Wales government and also yesterday's announcement in Victoria that schools will be closed in Victoria, but in New South Wales though remain open, however, parents are strongly encouraged to keep their children at home. How does that affect an employees rights to take carer’s leave to look after their kids? And does that mean employers are liable to pay their employees carer’s leave if they're having to look after their kids?

 

Simon (00:47:27):

So full time and part time employees are entitled to 10 days paid personal carer's leave each year which accrues each year and gets carried over from year to year. And that leave can be used either because the employees themselves are sick or because they have to take care of a member of the immediate family or household who is sick or because of an unexpected emergency that affects the member of the household or immediate family. The question arises, If a parent needs to take some time off work to care for their child because the child isn't going to school, Can personal carer’s leave be used for that purpose? It's fairly clear in circumstances where you've got a sick child at home and you need to take some time off to care for them, that that carer’s leave would be available. Say an unexpected emergency might arise like, the childcare is canceled and you need to step into, to take care of them. So I think it's absolutely clear that if the government orders a closure of schools, parents have to step in and look after the children and they would be able to access carers leave. I suppose it's in a situation where the government is just encouraging employees, well parents to remain home and look after kids rather than closing schools. Does that obligation on employees to pay carer's leave still arise? I would have thought, and the answer is probably yes. And if parents need to take time off too to care for children on the advice of, government that this is what they should be doing, I think it'd be difficult to argue that they're not entitled to carer's leave. And again, this, this is obviously a very kind of new announcement that we've heard. So we would hope to get some guidance from the Fair Work Ombudsman on that point in the next well in the next few hours.

 

Speaker 1 (00:50:28):

I think as we were all experiencing the same issues at the same time. And employment Hero and Employment Innovations are trying to do everything we can to support the community. From the results of that most recent poll showing that 99% of people have found today's session useful. What we would like to do is continue running these events as frequently as we can and answer questions as they come in and also as the situation continually evolves from hour to hour that the types of questions that you as employers will be dealing with will vary very rapidly. You know, in the coming weeks we'll be dealing with a lot more illness and how do we manage the workforce for those who are attempting to maintain business continuity went up to 10 to 20% of their employees might not be able to work through self quarantining etc. 

 

So, these things are going to rapidly evolve and we want to be here to help as many businesses as we possibly can. I'll just shortly start to go into rapid fire questions through our Q and A section. Before I do that, I'd like to mention a number of other things we're doing to try and help. Employment Hero is proud to announce that today, we are making Employment Hero free with all of our platinum features that support working from home for any business with less than 20 employees. And we are upgrading every account to platinum again to give every existing client access to all of our features that facilitate working from home. So if you're interested in that, you will receive an email following today's session giving you a link to register for Employment Hero for free for three months, if you have less than 20 employees. If you have less than 20 employees, if you have more than that, let us know if we can help. Otherwise it's an upgrade to platinum for everybody. 

 

In Employment Innovations case, they run an employer hotline, which is a subscription service. Ordinarily that is a 12 month subscription. But given the circumstances, they are making that available on a month to month basis. So they will also be a link to the Employment Innovations employer support service unlimited questions answered through, through that hotline or employers. You will need to register to become a member of that employer support line. And now I will just open the polling, the Q and A. There's 263 questions here, Simon. So we've got five minutes to get through as many as possible. I'll just start to sort of call out the ones that I could tell you.

 

Q: Is the implication of a 20% reduction in load and pay also a 20% reduction in leave accruals.

 

Simon

Well, I guess the question being asked there is if you agree with employees to a 20% reduction in pay or working hours, how does that affect the leave entitlements? I think it's going to vary from type of leave to type of leave. I don't think that's a straightforward question. Some types of leave is based on your pay at the time you take the leave, some types of leave looks back -- so long service leave in some states looks at an average of earnings and hours. There's not a one size fits all answer to that I'm afraid. That’s a complex area. I think you'd need to seek some advice before getting the position on that with a definitive answer. 

 

Ben (00:55:19):

Another common one here, just looking through the questions is if employees agree to a reduction in hours and pay,  is there a notice period that applies or can they agree just to move immediately to a reduction?

 

Simon (00:55:40):

Yeah, I mean, I think with all of these things, if you can get it, whatever you agree with, the employee kind of goes. So if, if you can get a sign off for an immediate reduction in hours or pay then that's fine. I suppose practically speaking, I would have thought employers are going to have a much better rate of success with implementing these changes, which are obviously significant and difficult things for employees. I think there's going to be a higher success rate if what is being presented is open and Frank discussion, which isn't we need to implement this tomorrow. 

 

Ideally, you'd want to have a conversation with employees and get their input in the measures of what you’re implementing. Give employees as much notice as you can of the changes that you're going to implement. Because if it's a reduction in pay, that that could have kind of significant impacts on employees in terms of, you know, their financial outgoings and what obligations they have. So there's no, there's no set requirement to give them a period of notice if you're doing it by agreement. But I would have thought of makes practical sense to give as much notice as you can.

 

Ben (00:57:22):

Another question here is can an employee use different options for different parts of their workforce based on business level activity. Yes. You know, extraordinary times call for extraordinary measures. You can enter into individual agreements with individual employees. You can enter into arrangements with groups of employees or you can hopefully agree with the entire business if that's necessary. You would want to do it in writing to make sure that you can confirm, after this was over it was by agreement. Definitely want to try and do this with a written agreement. You can, you can certainly make different arrangements for, for different people. If you stand down staff, can they claim unemployment benefits or is it only if their employment is terminated?

 

Simon (00:58:24):

Yeah, that's a really good question. And I was looking at this very briefly before we came on and as I understand it, the new incentives which have been introduced for employees will apply whether they've lost their jobs or, or been stood down. So, I think people need to check that themselves and the relevant government websites. But my understanding is that the type of employee benefits which you would get ordinarily if you, if you've lost your job, will be available to employees that have been stood down. The devil's in the details, so you need to check that.

 

Ben (00:59:18):

Can an employee refuse to stand down and request a redundancy instead? And if an employee refuses to reduce their hours, if you're trying to attempt an agreed cost, saving across the board, but an employee refuses is redundancy, is redundancy the only alternative? So there's two questions there if you've got them.

 

Simon (00:59:49):

I think if you're talking about the stand down provisions which apply for example, to a business that needs to close its doors as a result of these new government and directives affecting the hospitality industry and most other businesses we mentioned at the start, the employee can't refuse that. It's an employer's right to impose a stand down without pay. So they can't refuse that. You also mentioned could they be asked to be made redundant. They could be, but then there'll be no obligation on the employer to agree to that. But certainly a voluntary redundancy process might be something which would work for some employers. 

 

Ben (01:00:56):

If an employee refuses to reduce their hours, is redundancy the only option.

 

Simon (01:01:04):

I don't think I'd say it was the only option, but it might well be, depending on the circumstances of the business. I'm getting a lot of questions about if we try and introduce a  series of cuts across the business, I try and get employees to sign up to a wage reduction or reduction in hours. If some employees go for it and some employees don’t, are we able to select the ones that don't go for it, for redundancy or is something kind of inherently unfair about that? I think it's as a business owner, you have the flexibility to, to choose people for redundancy broadly as you see fit.

 

As long as you're not doing so for discriminatory reasons or because someone has exercised a workplace right to take leave or to make a complaint or something like that. But it's the situation you're left with is, if employee A is costing you more than employee B, because employee B has agreed to a reduction in hours or pay and employee A hasn’t, I think that would be a valid reason to to look at redundancy for employee A. Obviously I am speaking in general and you would need to look at the circumstance facing each employee, but I think as a general position, an employer would have a great deal of flexibility to make whatever decisions about redundancy they want to take.

 

Ben (01:03:01):

That was another question that was raised was if you made an employee redundant because they hadn't agreed to reduced hours, would it leave you exposed to some other type of attributed action because of making a decision based on their entitlements? 

 

Simon: 

Yeah, I think if you're basing it on financial considerations, you have a pretty large degree of latitude as to what you do. 

 

Ben: Look we're now out of time. We have received 283 questions from around a thousand people who were on the call. What we will do is we'll create the templates, the two templates that we've mentioned, one for reduction of hours by agreement. I can't recall what the other one I've mentioned was earlier on, but we will get more resources onto our websites.

 

We will go through those questions and consolidate them down into what we believe are the most useful answers that we can provide. We have another webinar scheduled for Thursday, so that will give us time to deal with the situation as it stands on Thursday, plus the questions we received between now and then. We've extended our Zoom license to host up to 3000 people and we already have close to 2000 registered for Thursday. So if you are on today's call and would value another call like this, then join Thursday's session. We should be able to fit you in. Otherwise, please see the links that we've put into the chat facility there, there is a link to the Employment Hero offer. There are links to Employment Innovations templates and other resources. We are going to do everything we can as a group to support as many employers, and their employees as we possibly can.

 

Ben (01:05:04):

We stand ready to help every Australian SME. You, you people are the backbone of the Australian economy. You're employing 70% of total employees in the economy, and you represent 99% of all businesses in the economy. And so Employment Innovations and Employment Hero are at your service to do everything we can to help. I'm sure we can improve on how we're doing things, but we will do everything we can to support you. And it's our pleasure to be able to help at times like this.



Ben (01:06:00):

Bear in mind, you know, so I'm in as an employment lawyer, has to be careful in how he answers things. This is not advice, it's off the cuff information. And I don't currently hold a practicing certificate so I can be a bit more pragmatic. I'm also an employer with a group of different companies and I'm facing the same issues as many of you are. So I'm happy to sort of lean into and provide pragmatic guidance if that's going to be useful. Thank you everybody for your time today. Let us know how we can help and and do stay in touch.