When Australians went into lockdown back in March, we collectively imagined it would be a tough few months but by July we’d be back to normal. And in some states, this seems to be the case, but in Victoria – and to some extent, NSW, restrictions have returned, making it challenging for residents to go about their business, go to work, and also for business owners to continue to operate. In Melbourne, many shops and restaurants had been open just several days, when they were forced to close their doors again.
If you’re a business owner, and the future is looking bleak, what options do you have to continue to pay staff; fulfilling your legal obligations, balancing your personal and moral responsibilities with your commitment to the future of your business, and your own financial stability?
Firstly, laying off staff can be the last resort. Not only is it upsetting to do, but it can also be risky. Go in too hard, and what will you do when business – hopefully – starts up again? Particularly if you’ve invested in training these people, you don’t want to have to find additional information to recruit and upskill a new workforce? For example, you’re in the travel industry and you’ve grown an excellent, knowledgeable team. If you stand them down, they may get snapped up by a competitor when travel restrictions ease, and you’ll then have to start all over again to find your talent.
There’s been a great deal of discussion around the end of Jobkeeper – the good news is access has been extended to the end of the year, although the amount will be reduced. Regardless, the source of support is still an option, so any eligible business owners should pursue this option while they can. This temporary subsidy is for businesses significantly affected by COVID-19. Eligible employers, sole traders and other entities can apply to receive $1,500 per eligible employee per fortnight. While this won’t go on forever, it should buy you some time to keep paying staff, and increasing chances of them staying with you.
If you’re a small business based in Victoria, you may be eligible for the support package the state government has recently launched. This includes cash grants of $5,000 for eligible businesses in metropolitan Melbourne and Mitchell Shire, which are currently undergoing strict restrictions, meaning many enterprises are unable to operate. You will need to be already enrolling in the JobKeeper scheme, and be responsible for employers – it’s not open to sole traders. Businesses have until 19 August to apply via the Victorian state government website. In NSW, small businesses can also apply for a recovery grant of up to $3,000 – details here.
Reducing hours – this tactic has been taken by a lot of firms, particularly in office-based jobs who have seen projects dry up or clients withdraw their business. This is definitely an option if your team understands the reason behind it, agree to it, and if it goes hand in hand with reduced hours, so resentment or lack of motivation doesn’t build. Try and cut as little as you can – anything more than 15 per cent could really sting.
Other options could be to negotiate unpaid leave – while this isn’t ideal, some employees may appreciate the option to have more time off, particularly if their caring duties have increased, for example if their children’s schools are closed.
You may even have to consider redundancy, but this can feel like the final option. It can also be fairly expensive, if you have to pay out a member of staff for a lengthy notice period, which can increase if they are over 45. However, there may be team members who would welcome redundancy, so offering it on a voluntary basis could be mutually beneficial.
Remember, there have been temporary changes to workplace laws during coronavirus, introduced in March 2020 so there may be more flexibility in terms of the extension of temporary award flexibility provisions and extension of unpaid pandemic leave in some awards. Awards that have been temporarily varied include Restaurant, Clerks, Hospitality and Education Services (Schools) General Staff Award among others. Keep an eye on the Fair Work Commission website to see if any of these relaxed laws could work in your favour.
As many Australians felt they were coming out the other side, coronavirus came back to surprise us. This has been challenging for many business owners, who not only have their personal and family’s situation to consider, but their staff’s financial security and wellbeing. Whatever you do, a knee-jerk reaction is inadvisable, explore all the options for government support that you may be eligible too, before making any drastic changes.
Kayte Lewis, director and principal, The Voice Lawyers