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How Employers Can Manage the 'Human' Element of COVID-19

Written by Angela Bernardi . April 28, 2020

Welcome to BLG's first podcast! We have also included a transcript of it below so you can read and refer back to this information if you need to.

In this episode BLG Director, Angela Bernardi speaks to Amanda Smith from Purpose. People Solutions to answer some common human resources questions so many employers are asking during COVID-19.

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Transcript

Angela Bernardi 0:33
I'm Angela Bernadi from BLG and I've got with me Amanda Smith from Purpose People Solutions. Amanda, can you tell me a bit about yourself?

Amanda Smith 0:43
Yeah, hi, Angela. It's good to see you, especially in this Coronavirus world to put a face together. So I'm the owner of Purpose People Solutions and we help small and growing businesses who don't have dedicated HR support with all of their people needs. So from hiring practices, protecting and enabling businesses to have productive teams.

Angela Bernardi 1:11
Okay, fantastic. And I know you've helped a fair few of our clients today and are probably going to be helping a lot more in current times. So the purpose of today's video for our clients is to pretty much go through some common questions that we've been getting asked, and to see how you can help with those questions. So I think the first thing we might do is start with the changes to Fair Work and if you can go through what's happened in that space, and what we need to be aware of.

Amanda Smith 1:41
Yeah, sure. So the Fair Work amendments came into effect on the 9 April. So really, you know, very, very recently, only a couple of weeks ago. There has been such an enormous amount of change that's been going on at a government level, as we all know, and across a whole range of legislation. Which I think is fantastic as a response to the climate that we're currently working in. However, in an already incredibly complex industrial relations system that we work in normally, we've got another layer of complexity that has been imposed and introduced for very good reasons that we're all left working out - how they all hang together and how they fit and who qualifies and who doesn't. So one of the challenges the Fair Work Act had, prior to the ninth of April, was employers who wanted to be able to stand down their employees because of the economic downturn. And technically that wasn't able to be achieved under the Fair Work Act in the past. There were a couple of criteria, but there had to be basically a stoppage of work or government direction, in order for employees to be stood down as such. An economic downturn was not enough. So the JobKeeper changes that have come in under the Fair Work Amendments or the amendments to the Fair Work Act, are now enabling employers to have greater flexibility around issuing directions to their workforce to try and accommodate and preserve jobs into the future and when businesses do recover, or when we are able to recover. So some of those changes that we are now seeing that allow employers who do qualify and are able to receive JobKeeper payments, they'll be able to vary terms or employment terms such as reducing hours of work. They will be able to direct employees to work on perhaps days that they couldn't work in the past, and they can change duties or tasks. So that you can still usefully employ somebody but it may not be in the role that you had initially employed them to do.

Angela Bernardi 4:02
Okay, so we can't change the ordinary rate of pay, but we might be able to change things like their hours, their days.

What we thought might be practical in this situation is to come up with a few hypothetical scenarios and go through some common questions that we've been asked from our clients. So, for example, we might start with a firm that might be called BLG, funnily enough! I've got a staff member at BLG who's permanently employed. His name's Michael, and I'd like to change his hours of work. I need to reduce them because we don't have enough work for him. Can I do that?

Amanda Smith 4:42
So the first question is, is BLG actually eligible and receiving JobKeeper payments, and that really is the first test as to whether you can make any of those changes as outlined earlier. If an employer is receiving and eligible for JobKeeper, you are able under those directions, to talk to Michael about reducing his ordinary hours of work.

Angela Bernardi 5:10
Okay. And if BLG is not eligible to receive the JobKeeper payments, but we have experienced some downturn, (we've just not experienced enough of a downturn to meet the JobKeeper payment eligibility) can I still talk to him about varying his hours?

Amanda Smith 5:28
You can absolutely still talk to him. What you can't do is give him the direction that the JobKeeper changes, under the Fair Work amendments, allow you to do. So it's a consultation process if you don't qualify for JobKeeper. There is a chance that Michael might refuse to make any changes to his employment contract and that would be reasonable on his side. But obviously, that can put an employer in a really challenging position when there is that economic downturn.

Angela Bernardi 5:57
So at BLG, can I request my staff take annual leave?

Amanda Smith 6:05
Again, you can always ask and consult to do that. So as an employer, you're able to do that you can request somebody to take leave, and I think given that strong position as to why you want to have that happen, is really important starting place. Because you won't be able to get people understanding the overall context as to which you're working in and the importance of it. The employee does need to actually consider your request quite well, and they're not able to unreasonably refuse your request. Keeping in mind, are you qualifying for the JobKeeper scheme? Okay, and the employee needs to maintain a leave balance of no fewer than two weeks in their accruals.

Angela Bernardi 6:54
Okay.

Amanda Smith 6:55
An important thing to note as well is that there has been massive change across the modern awards over the last month or so. As well as seeing changes, something like 99 of 122 modern awards, which is phenomenal. You would always encourage an employee to go back and check their applicable modern award, to make sure that the award will dictate what can be done for that worker who is covered under that award. Because there could be some variation from one award to another.

Angela Bernardi 7:26
At BLG, I've got a couple of long term employees who have some large long service leave balances, and ideally, this would be an appropriate time to get them to take their long service leave or force them to take it. So for example, I've got Scott and Clayton sitting there with some huge balances. Can I make them take their long service leave?

Amanda Smith 7:46
Yeah, but there's also been changes to the New South Wales long service leave legislation as well. Again, in this context to provide stronger flexibility over the next six months between all parties. So normally an employer needs to give at least a month's notice of any kind of change or request to take long service leave. If you can sit down and talk to Scott and Clayton about their long service leave accruals and starting to reduce them, by mutual agreement, that notice period can be waived. The other thing that can happen now, is that smaller periods of time to use that long service leave can also be applied as well.

Angela Bernardi 8:26
Okay. Under the JobKeeper payment, if I've got a casual employee and they usually only work a couple of days a week, (so it doesn't really amount to the $1500 a fortnight, but I've got to pay them the $1500 a fortnight in any case, to then get reimbursed by the government) can I ask them to work more hours to bring them up to the $1500 a fortnight?

Amanda Smith 8:52
That's a really interesting question. So casuals as we know, a true casual has no expectation of regular ongoing employment. Their hours of work can change. You can engage them for shorter or more amounts of work from time to time. So actually under this arrangement, you can talk to the casual and offer them more hours than they might normally do in order to bring them up to that $1500 amount, which I think is is quite a useful option for employers at this point in time. But just remember, casuals don't have to accept that offer of work. Every shift you offer a casual work does not have to be accepted. But yes, you have that flexibility for a casual.

Angela Bernardi 9:38
Okay, So at BLG I do have a casual employee and his name's Phil. He's actually returning from extended leave and it would be ideal for me if I could exclude him from the JobKeeper payment, so I don't have to fund that. Am I able to do that?

Amanda Smith 9:57
So if he's been, if Phil's been away for quite some time, it's unlikely he would qualify under JobKeeper in the sense that he, we would need to look at the detail more closely. But there's a chance that he hasn't been employed regularly and in a systematic way. As a result of that, keeping in mind, depending on whether he actually had been employed for 12 months at the 1 March as well, he may not qualify at all for JobKeeper.

Angela Bernardi 10:29
Okay. I've actually got a few casual employees at BLG. I've also got another employee called Pete, and he hasn't been given shifts in a few weeks, but he has been employed for over a 12 month period. It's just that I haven't given him some shifts in the last couple of weeks. Is he still entitled to JobKeeper payment?

Amanda Smith 10:50
Hmm. So he's been employed for 12 months?

Angela Bernardi 10:55
Yes.

Amanda Smith 10:56
Yeah, and he hasn't had shifts for a few weeks. Again, it'll come down to that definition of regular and systematic if that's a normal experience for him. But he would expect to come back and have some work in a period of time, then potentially, there's something systematic about that. But you would just need to double check as to how regular and systematic his employment actually was. But there is a chance that he may not apply.

Angela Bernardi 11:22
This concept of regular and systematic is posing some issues to a few people because we just don't quite understand what is defined as regular and systematic. Do you have an answer for us?

Amanda Smith 11:37
Look, it's where, and I think it gets trickier on a case-by-case basis, but it's where a worker has usually been provided with regular shifts and has an expectation of ongoing work. So I may not get a lot of work, but every Wednesday I know that I need to turn up to the BLG offices and I'm there for half a day, and you may not actually invite me to do that every week, but you're expecting me to be there. That half a day every Wednesday. That's regular and systematic.

Angela Bernardi 12:12
If I wanted to make this process a bit easier for myself, and with these casuals Pete and Phil, would it just be easier for me to give them a termination notice?

Amanda Smith 12:23
Hmm. It's, again, risk. A risk assessment. So we're looking at the two key criteria for the casual pieces is the 12 months of employment. So were they employed on the first of March, and have they been there for 12 months prior? So that's one element of it. And again, that regular and systematic nature of the employment relationship. So if there's any pattern in the way that they have been engaged over that period of time. What this legislation is highlighting is what already existed in place around casuals. Could they argue that there was an element of permanency to the relationship.

Angela Bernardi 13:03
So I have a little bit of a troublesome employee. His name's Michael and BLG have complied with all the JobKeeper enabling criteria, and he is refusing to follow the enabling direction. What can I do in relation to this?

Amanda Smith 13:18
Yeah, look, it's interesting. We've had a couple of those questions as well. And, look, the first advice I would give you is to try and sit down and work through are, what's stopping Michael from getting on board with the changes that you're doing? Is there something about the context he doesn't understand? What is it that's a troublesome spot for him? But I guess if you cannot get to some point of resolution with Michael around this, the employee has the opportunity to lodge a dispute with Fair Work. So they are able to take that to Fair Work and talk to them about their situation and why they don't believe that direction to be reasonable. I mean, we are considering that the directions do need to be reasonable and they need to be safe. But if an employer has issued a direction on the JobKeeper, that's what we need.

Angela Bernardi 14:14
So, prior to COVID-19, I had offered one of my employees Clayton a pay rise, and it was effective from 1 March, but unfortunately, I really can't afford that anymore. What options do I have available to me?

Amanda Smith 14:31
Hmm. Look, I think if the pay rise was communicated before this period of time, then I think the only option you've got is to sit down with Clayton and explain the situation, and talk to him about the sooner the business is able to see ourselves through this time and then to recover, that the pay rise will be honoured. The timeframe will be deferred as to when that is implemented. I think the challenge would be if the pay rise actually was implemented, then that is already in place, and that would be the employees new rate of pay.

Angela Bernardi 15:05
Okay. So at BLG we're experiencing some tough times, and as a last resort, we just want to understand the legal position as to when and how, if we needed to, we could stand down our staff.

Amanda Smith 15:22
Yeah, sure. So if an employer is qualifying under JobKeeper, you're in a position to be able to stand down.

Angela Bernardi 15:31
Yes. If we're not qualifying under JobKeeper...

Amanda Smith 15:36
Yeah, if you're not qualifying under JobKeeper, then that is the tricky spot. You're not actually under the Fair Work Act pre-JobKeeper changes. Economic downturn was not a reason to be able to stand down employees. There needed to be a complete stoppage of work, or some other reason why you couldn't keep working. But a decline in its own right wasn't enough to stand in an employee. You would go through a process of consultation with your workers and see whether, by mutual agreement, you could reach some other arrangements, such as reducing hours or any of these other options that are being enabled under JobKeeper. But they can't be directed.

Angela Bernardi 16:19
Okay. So let's say we actually did stand down our staff. How does annual leave, sick leave, long service leave... what happens in relation to those during that period?

Amanda Smith 16:34
Hmm. All of the leave types accrue as they normally would, as though JobKeeper didn't exist. That's probably the simplest way. So the rates of pay, and the rates in which they accrue, don't change.

Angela Bernardi 16:48
All right. Well, I think from our point of view Amanda that answers a lot of the common questions we've been asked. So I want to thank you from the point of view of giving us some time general advice in relation to that. Did you have anything you wanted to add?

Amanda Smith 17:05
No. Look, I think there is so much, so many variations at the moment and it is incredibly complex. So I would encourage employers to reach out and get the right accounting advice, the right HR advice along the way. We are all in this together to try and work out the best way forward. And there is so many things that are changing day by day.

Angela Bernardi 17:29
Excellent, thanks for that. Just as a note to everyone watching, we're going to be including website links in the video so that you can click for additional resources. We're going to have a transcript of what Amanda and I have spoken about, and we'll be including some extra details that Amanda has sent through to our office. Thanks everyone!

Kristy Hickey 17:55
Thanks for listening. Find out more at www.blgba.com.au.

*The above information was correct at the time of publishing and subject to change*
Written by Angela Bernardi . April 28, 2020

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