Business’ should prepare for wage subsidies to end on 28 March 2021 under the JobKeeper scheme, with the Prime Minister Scott Morrison unlikely to extend the program in its current form. This means that employers relying on JobKeeper will need to make some hard decisions about their business’ future, and how this may impact their employees.
We suggest that you consider the following cost saving options before making your staff redundant.
- Can you reduce your office footprint, move to a smaller premises or re-negotiate your lease to reduce rent costs?
- Can you cut discretionary expenses such as travel, food and beverage, entertainment or event costs. And/or are there supplier contracts that can be re-negotiated, subscriptions that are no longer needed?
Once the above options have been exhausted, there may no choice but to look at your staffing costs. Where Directions under JobKeeper provided some flexibility for employers in relation to directing employees to stand down, take leave, reduce their pay or their hours, you will now need to refer back to the Fair Work Act 2009 and the relevant Award, industrial agreement or employment contract in place.
Redundancies and stand downs may be inevitable as you look to make cost reductions. The difference between a stand down and a redundancy is that a stand down of employees without pay occurs when employees cannot be usefully employed due to no fault of the employer. With the Covid pandemic under relative control in Australia, this may not be an option. In the event of a government ordered shut down, employers may the need to rely on the stand down provisions in the Fair Work Act 2009. We have provided a detailed overview of these provisions in a previous article available here.
If you are considering redundancies, remember that these are relevant to the employee’s role. If a redundancy is challenged by an employee at the Fair Work Commission, you will have to demonstrate that you have consulted with the employee and all efforts have been made to redeploy the employee. It’s important that these processes are taken seriously, and ensure that you consult with the impacted employee/s because if someone is about to lose their job, they may come up with innovative ideas on how they can continue working with you.
If you’re unsure which Award applies to you, we have recorded a great webinar that explains award coverage in further detail. You can access the webinar here.
For more information on the above, please contact us on 1300 887 458 and speak with one of our HR Consultants. If you are interested in learning more about our HR services, including HR Outsourcing, HR Consulting, HR Advisory Services, contact us at firstname.lastname@example.org.