Facebook Live Event 3: Update On Tightened Government Restrictions

Published March 31, 2020 Views: 6


An update on the new government restrictions, including the shutdown of “non-essential” businesses and how this affects our clients.

To help your business navigate the COVID-19 crisis Employsure’s founder and Managing Director Ed Mallett is hosting live events on Facebook, to discuss the latest events, burning questions Employsure’s clients are asking and to offer business and management tips. At the end of every session, Ed will answer a few questions that come through the comment section.


Facebook Live Event 3: Update On Tightened Government Restrictions

  • Transcript

    Ed: Ed Mallett here, MD of Employsure. I assume that if you’re tuning in again today, you maybe have seen one or two of the previous live streams that we’ve done. And thanks very much for tuning in again. I promised you today that what I’ll do is focus on stage two of the four-stage process that I’ve proposed. And just a quick reminder as to what those four stages are, the first is that stage zero, you’re in denial that COVID-19 is happening and it’s going to affect your business. I think on a public level, we saw quite a bit of that at the weekend with the problems around social distancing in places like Bondi. A lot of people in denial about the fact that this is happening. Again, if you’re tuning into this, you’re probably not one of those people.

    Second stage was crisis management. I’m gonna come back to some of that today because the situation is so fast moving, we need to make sure that we’re covering that incrementally as well. The next stage after that is planning, making sure that you’re doing business-planning effectively, so that we can move forward as business owners through this troubling time. And the final stage, which we’ll come to in the coming days, and maybe weeks, we’ll be talking about opportunity. Pretty hard to talk about that today, to be honest, given the way a number of business owners will be feeling right now.

    I’m not afraid to admit that it was a pretty hideous weekend, to be honest, as a business owner. I went contrary to my own advice on a couple of occasions, which was worrying is not thinking, and also that teacup principle that I’ve talked about before, think clearly under pressure. I had a heck of a lot of frustration yesterday with the way that we, as business owners, were communicated to by the government. Our business is national. Our head office happens to be here in Sydney, but I’m fairly furious, to be honest, as a business owner, at the inconsistency in the communication between the state and federal governments in respect to what’s going on. And even today, I think huge amounts of confusion rain as to what is and isn’t permitted to be open under the current shutdown procedures that were proposed by Scott Morrison late last night.

    We, as an employer, spent most of last night after 10:00 p.m. at night chasing around, trying to explain to our staff that we were working business as usual today, albeit under some incremental procedures about working from home and so forth. The fact that our staff couldn’t understand what was going on really only just underlines how poor the communication has been from the government here in Australia. It’s been better in New Zealand. I have to say, really impressed with the way the New Zealand government seems to be handling it at the moment, but I’ve also got an update for you as to what’s going on over there if you are a business owner in New Zealand.

    So, I’m just focusing quickly on the government responses and where we’re up to at this stage and what that means for you as a business owner and, particularly, an employer. So, we heard last night that a range of businesses are being shut down across the various states and territories in Australia. And those include businesses, in large part, where people congregate publicly. So, for example, pubs and clubs, cinemas, theaters, indoor sports, including gyms and fitness industry, businesses, and other businesses that fall under the category such as cafes and restaurants, albeit that those two core employers in the Australian economy are permitted to do take away.

    So, for example, if you’re a café, and I think it’s really worth reinforcing this, you can carry on doing your takeaway service, which may well be a large proportion of your business. So be very careful at this time not to overreact to what’s just happened and, consequently, end up cutting off your nose to spite your face almost and causing yourself problems by doing more than the government is asking at this time. How long those restrictions will be in place is, unfortunately, anyone’s guess at the moment. There’s some media this morning from Scott Morrison saying, “Be prepared for six months,” but that’s quite different to a mandate that this is for six months or shorter or longer. We don’t know at the moment. We’ve got to remain open-minded, dynamic, and work through this as business owners.

    So, I’ll respond to any specific questions that there is about shut down in due course, but for the moment, stay abreast of the news. Be careful not to over apply it to yourself. I was surprised, for example, this morning that I swim at a local ocean pool near where I live, and they were shutting down, for example. But on my reading of the restrictions that they’re not an indoor fitness activity and they could be staying open if they wanted to do that. They may choose not to, for perception reasons, but the government advice at the moment was that they could carry on business as usual, subject to social distancing, keeping one and a half meters between yourself and others, and other social distancing measures, but they’ve chosen not to. That’s had a knock-on effect on the cafe that is next to the pool. They’ve then said they have to close down, they can’t even do takeaways. So be careful about these consequential effects of what’s going on. As business owners, follow the government advice is my strong recommendation.

    Quickly over to New Zealand. They’ve announced today that they’ve escalated up a level as of yesterday that they were in what they’re calling Level 2 Reduce this morning, that they’ve announced that they’re going up to Level 3 Restrict, which shares some similarities to some of the shutdown measures in Australia, and various businesses that are considered to be carrying out non-essential services are being shut down, for example, libraries in New Zealand are one that’s being caught by that. But keep an eye on the government websites to see whether there are specific industries, and I’ll try and answer questions about that in due course as well.

    So, those are some up-to-date positions on, if you like, what’s happening with shutdown in both countries at the moment. I’m now gonna interrelate that to what needs to be happening for you, as a business owner, vis-à-vis your employees. Yeah, I’m not professing to be a consistent service on government updates. That’s not what I’m trying to do. I’m trying to help you with your employees so that you can manage your businesses with success through the COVID-19 crisis. What that means is coming out the other side of this with a business that can kick on to new heights once this has passed.

    So, let’s look at the sort of things that you’re gonna be having to consider for your business at the moment regardless of shutdown. Because let’s face it, it’s not just businesses that are getting shut down that are gonna have challenges with their employee issues at the moment. Their suppliers will also have challenges and the suppliers of those suppliers and so on. The consequential effects of this are, of course huge, and there will be barely a business that isn’t feeling it in some way. Some I set we’ll be getting a positive spike in business out of this, but they’ll be amongst the minority is my belief. And I’m therefore gonna focus on those that are gonna be struggling to understand how they maintain or reduce their costs in regards to their staff over the coming weeks and months.

    So, some options. I’m gonna go through them one by one in terms of your planning. What I, first of all, think that you need to be doing is looking at your staff cost base vis-à-vis the revenue that you’re going to be bringing in over the coming weeks and months. There are a couple of things to bear in mind, particularly in Australia with the relief package that came out yesterday, that I’ll talk about in a moment, as they intersect with questions like redundancy. So it may be, for example, you understand in your business that sales or revenue will go down over the coming period by a certain percentage, you may be planning at this stage. I’ve urged you all to do to plan for the worst and hope for the best. You might be starting to put together business plans that say, “What happens if revenue grinds to a halt over the coming period? What happens if that’s one, three, or six months?” If that is, you’ll need to start reducing your cost base, and that might include your staff costs. I’m not saying it has to include your staff costs.

    Be very careful on this because part of the government stimulus package that Australia launched yesterday relates directly to carrying on employing staff. So for those businesses that qualify for things like the payroll tax rebate in different states, but also at federal level where you have, through pay-as-you-earn, you have a situation where businesses can recover some of the tax that they would otherwise deduct at source through their business activity statements. If you stop employing people, you’re not gonna receive the benefit of those government initiatives. So be very careful with this, that you don’t jump to a conclusion that you need to remove staff, which might, in turn, remove your entitlement to government initiatives.

    But if you do decide that, notwithstanding government initiatives, you do need to look at reducing your staff costs, redundancy is one option. It’s the most atomic of the options, but it is one option. Now, in doing redundancies, what you need to consider is two fundamental things. One, there is a process to follow. That process takes time. It requires you to speak to the staff, consult with them to understand whether they might have a response to alternatives to redundancy before moving on, if there isn’t an alternative to redundancy, and there aren’t any alternative options for them to be redeployed in the workforce and so forth before moving on to a dismissal process. It takes time. It’s something that you can’t rush, and therefore, you need to be thinking quickly now whether that’s a process you should start now.

    It’s obviously very scary and worrying for staff at this time. But don’t find yourself in such a pinch financially that you end up having to cut corners on processes like this. That’s unfair to your staff, and leaves you exposed to Fair Work claims, or, in New Zealand, personal grievances. If you’re exposed to those sorts of things, that would be catastrophic, potentially, for your business. If, in order to try and save money, you found yourself exposed to some legal liabilities in due course, you don’t want to find yourself in those situations. So I’d urge you to start considering now. If you need to be thinking about redundancy, start considering now about whether you need to initiate processes, at least to start consulting and discussing with your staff so that if and when the time comes, you can move relatively quickly.

    The second aspect of redundancy worth mentioning is the obligation to make payment to staff under redundancy provisions that might exist in the Modern Award Enterprise Agreement or just under the National Employment Standards. There are different rules in New Zealand under the Employment Rights Act. But you have to take care on this. You really need advice whether specific employees are entitled to redundancy pay. It depends, for example, whether you’re a small business under the definition of the Fair Work Act together what might individually apply to your industry, but the amounts that employees might receive as full or part-time workers under relevant redundancy provisions could be pretty high.

    So, for example, someone that’s worked for you in Australia that isn’t otherwise Award or Enterprise Agreement effective, but someone that has worked for you for 9 years, might get 16 weeks of redundancy pay. So that’s a lot of money that you’d be paying out and you’ll need to start questioning whether that is really a way of saving money for your business. It may not be, and you may need to consider other options rather than making them redundant. So don’t think that redundancy equals quick savings. It doesn’t always, and you need to start factoring in those calculations into any business plan.

    Please don’t cut these corners. I stress this because not just out of fairness to your employees, it could be really detrimental to your business. I’ve already seen things on social media where, in the UK, people have been cutting corners, firing people by text messages, blanket letters going to staff that are then getting posted online. You don’t wanna be one of those employers with extra problems on your plate on top of the huge burden we’re all facing at the moment.

    So, redundancy is an option. It’s not the only option. It might not even be the best option to save money at this time. One of the other options is stand down, is a term that we spoke about briefly on Friday and you’ll be hearing a lot in the press about. So, stand downs permitted under the Fair Work Act, if there is a stoppage of your work, which is typically caused by something out of your control, say, for example, an emergency, a national emergency. And that trigger has arguably come about for a range of businesses today at midday in Australia, and those businesses are also being shut down in New Zealand, where the government is saying that you simply cannot operate. It’s very different, as I said on Friday and I’ll stress now, very different to a slowdown in business.

    Now, because of the economic environment we’re all subject to, if your business is slowing down, it doesn’t necessarily trigger the right for you to be able to stand down your staff and, in fact, it typically won’t. Stand down your staff, if it is available to you, it means that they are stood down without pay. Sometimes you might choose to allow them to access various accrued entitlements, like, annual leave during that time. But, of course, if you’re trying to save money that doesn’t necessarily solve the problem, if you’re paying out annual leave, when in fact what you need is your wage bill to stop. So, it is an option, but it’s a complex one. You can see what Qantas have been through and doing it in Australia, a huge stand down of their staff last week. They’re subject to a myriad of enterprise agreements that will have various provisions in it. If you’re planning on standing people down, you really do need expert advice on it to help you through that process.

    The third bucket of alternatives before I start looking at some of your questions I can see that are coming through are things like looking to your employees to work collaboratively with them for solutions, avoid redundancy, avoid stand down. Can people share work? Will they work a four-day week, a three-day week during this period? Will they work collaboratively with you to understand what your needs are to reduce your wage bill versus their needs to obviously continue to receive an income? Now, if you’ve got a good relationship with your employees, you should be able to start having conversations about that. So, a classic one would be if you could move to a 4 or a 3-day week, you might be saving 20% or 40% on your wage bill. But at the same time, what you’re doing is enabling your employees to receive more money than they might if you make them redundant, or they’re stood down and they need to start accessing job benefits.

    I know the government has doubled, in Australia, access to what was known as Newstart, but that still may be nowhere near the wages that the employee might get if they were working a three or four-day week for you. And you might still have work that you can constructively get out of people on that reduced wage bill. So, those are the sorts of things that you might start to consider as an alternative to redundancy, remembering redundancy costs money. It isn’t a quick or easy or cheap way to reduce your labor costs. And a stand down may not be available to you unless you’re in an industry that has had a stoppage. So, those are three buckets of ways in which you can start to look at managing your labor costs if your revenues are down.

    The other way, of course, is to start speaking to other costs in your business, and I’m careful not to stray outside my areas of expertise here. I really don’t like that. I have to say I’ve heard it said a couple of times in the last few days about slowing payments to suppliers and so forth. Just, for me, ethically, that’s not the right thing to do. But that’s just my view for what it’s worth on this. Yeah, we’re all in business together. I certainly won’t be slowing payments to my suppliers over this period. I’ll be keeping up with my payments to extend those services or continue to be needed and so forth. But I think that we all owe it to each other not to make our problems other people’s problems as well.

    So, guys, those are some views from me. I’m gonna turn to answering a few questions that are coming through thick and fast. I should add that it’s been absolute… I mean, the volumes of calls this morning for us have just been off the charts. I know that the Fair Work Ombudsman and the government services site have been down. I presume their sites have crashed from people trying to access them. We’re still here helping clients, and we’ll be 24/7 over the coming period, remembering that we do this all days of the week, at all times of the day, helping people through some really distressing stories coming through. But we’re just doing our best to see if we can help those people through this troubling time. So, over to you. Some questions, Stu, maybe that are coming through online.

    Stu: Yeah, just to encapsulate, I guess, the general narrative coming through. As we know, as of midday, there is a proposed shutdown of non-essential services. What is the definition of non-essential service and where can I get the list of non-essential services?

    Ed: Yeah. So I’ll try and say this without screaming my frustration, particularly in New South Wales at the state premier here. That essential services was a piece of language she used last night in a press release she made before the COAG meeting that they had late last night. There seemed to be a step back from that language in what Scott Morrison proposed today and seems to be being followed by all states as to the businesses that are being shut down. Essential services is no longer part of the narrative in Australia. It is in New Zealand. We’ll come back to that. In Australia, there’s now a specific list of businesses that are being required at midday to shut down. Don’t take my list here as gospel. Make sure that you have a look on the government website to both state and federal will give you this list, but it includes cafes and restaurants, except for takeaway, indoor fitness facilities, gyms, particularly theaters, cinemas. There was places of worship was listed in there as well.

    So, quite a range of different businesses, but it doesn’t include, for example, retail. Why? It’s quite an interesting question. Scott Morrison specifically said today…last night, sorry, that today any ongoing shopping centers would be open. Seems pretty, excuse my language, bloody unfair on the cafes and restaurants in those shopping centers, but the retail elements are allowed to be open subject to social distancing, staying one and a half meters from people, not having more people per four meter squared in any shop, which is gonna be a difficulty for people to work out and manage and place in their workplaces and retail and so forth.

    Stu: Seeing that the time frame here could be several months, what are the options open to employers right now in terms of managing their staff?

    Ed: So, a couple of things. The mantra that I’m following is this is, is that subject to a couple of slips I had over the weekend when I started to worry and panic about it, which I think is probably only human for a business owner at this time. But worrying is not thinking. Take a step back from this. It will feel like the world is coming to an end in some ways for business owners and so forth. I understand that catastrophization of the situation, trying to see a way through this, given the level of communication that we’re receiving is very, very hard. But you’ve got to try and stay rational about it. And that’s why I’d urge you to go through this staging process. Stage one, look at your crisis management.

    What does it mean for your business today? You are a gym owner. The gym right now has just shut down 22 minutes ago in East Coast time. What are your obligations going forward? What does that mean to your cost base from there? Move into stage two, start planning, and looking consistently at communications that are coming out to see how long this might go on for, and trying to help your staff. I know, for example, given how busy we are, I’ve already reached out to my local cafe and my local gym to see if any of their casual staff can come and help us out by at least answering the phones to ensure that our clients are getting someone answering their calls as quickly as we can, triaging them to put them through to our experts giving advice today.

    Stu: If an employee chooses to take unpaid leave, will they still accumulate their entitlements over that period?

    Ed: So, let’s be clear about what’s going on here. If it’s a stand down situation, and an employee is stood down, they do accumulate their entitlements during that period. If the employee asks for unpaid leave and there’s an agreement between the employer and employee on that, they continue to be employed during that period. So there is nothing that interrupts our entitlements during that. So, those are the two positions. Essentially, if someone is going on paid or unpaid leave, they’ve got continuous employment. If they’re stood down, they’ve got continuous employment as well. So, the one exception to that is talking about casuals who don’t typically, if they’re less regular and systematic, aren’t getting those entitlements anyway. And essentially, what they’re not getting during that time is any more shifts, and that’s when they might start looking at Newstart and other support from the government that’s being offered.

    Stu: When it comes to standing down, what is the actual process that an employer should follow?

    Ed: A really good question. So, it’s very similar, actually, to the redundancy process. So, I don’t know what specifically happened at Qantas last week, but I suspect that their advisors would have been saying something like this. That, first of all, you should be consulting with your staff before you stand them down. This is happening in terms of the stoppage of work. That is, “Is there anything that we could be doing as an alternative to standing you down? Is there any work that he could be usefully redeployed to do in the time that we would have otherwise stand you down?” If the answer to all those things is, “No, there isn’t,” then stand down is essentially an inevitable action.

    And then, you’d move forward to meeting with each of those employees individually, making sure that you give them the opportunity to respond to any…and you’d answer any questions that they have. And then I’d outline that in writing to them, standing them down. It should typically be for a fixed period, which is one of the curious questions of this, is that because we don’t know how long it’s going on for, stand down procedures get quite murky around that. But what I recommend people do is do it for a fixed period to be reviewed, given that you don’t know how long this is gonna go on for.

    Stu: I’m getting a lot of questions coming through saying, “Does this affect the manufacturing industry or construction industries?”

    Ed: As in, does the economic challenges? Yes, the shutdown, unless they’re in those specific categories of businesses that have been named by the government, then, no, it doesn’t. But I’ve no doubt that there will be consequential knock-on effects into those industries. But yeah, a lot of our clients work in the construction industry, some of them will be doing things like residential construction. So as of right now, subject to social distancing, those businesses are permitted to carry on business as usual. There’s a building site right next to my home. And they were there this morning working. I saw them having their pre-work briefing about, very sensibly, I have to say, talking about what had happened the night before, what that meant for them, what they were gonna do on social distancing. But they can and will carry on work until told otherwise. But they’re not restricted from working under the shutdown that happened at midday.

    Stu: Regarding the shutdown that happened at midday, what about paying rent on commercial premises?

    Ed: A really good question. That’s a matter between the business and the landlord, not one that I can advise on. So, I’d say that I hope that landlords are doing their bit during this to understand the pressures we’re all on and that they’re taking more than a short sighted view on the need to get rent. And at the moment, there doesn’t seem to be other than the prospect of getting loans from the government, sorry, from the banks, which may well be indemnified by the government, as I understand it. There’s no opportunity to pay rent if you’ve got no income, unless your landlord says you don’t need to and so forth. But at the moment, it hasn’t been held over. I know that some of the banks are starting to look at things like mortgage payments, whether they’ll help property owners in that regard as well, I’m not sure.

    Stu: There’s still some confusion around schools going forward. What about parents who have to stay home now?

    Ed: Good question. So I’ll tell you quickly what we’re doing here. So, we’ve asked all our staff in advance who would be affected by their children not being able to go to school. So, we’ve got some sense as to the percentage of our staff that will have carer’s responsibilities. The current status, as I understand it, is this, is that last night, Scott Morrison said in Australia that schools remain open. It’s been discussed in New Zealand at the moment as to what’s happening with schools. But within the states, the ACT and Victoria from tomorrow will be shutting schools in advance of their upcoming Easter break. In New South Wales, the recommendation has been that the schools will stay open, but you’re recommended to keep your children at home unless you need them to be at school.

    Again, excuse my language, but just a bloody awful bit of communication from the government as to what I’m gonna be doing. The lack of clarity is mind-boggling. I don’t know if my own three kids, are there social pressures for me not to send them to school? They’re at school today, shouldn’t they be tomorrow? So, there’s a lot of confusion about it. Let’s assume for a moment that that means that if you’re not in frontline services, medical, fire, police, for example, and therefore, needing the support to your schools, that if your kids are staying at home from tomorrow, carer’s responsibilities potentially kick in, in that, if you’re not able to complete your duties, I expect most employees to take quite an adult view on this. You might have children present with you at home, but you might be able to work from home and carry on.

    But if you’ve got carer’s responsibilities that stop you from doing your job, then you need to be speaking to your employer about getting carer’s leave, if it’s available to you, remembering, as an employer, that carer’s leave is available to someone who’s needed to be a carer in response to an emergency. I’d expect the school closure or the recommendation not to send your kids to school to amount to that. How long for is a question that is very, very gray in response. It may be 24 or 48 hours, you say, as an employer, “Look, I can give you carer’s leave for that time, but afterwards, you need to be making alternative arrangements to ensure that you can carry on doing your job.” We are saying five days here, but I think that’s a generous response. I’d expect many small businesses to say that carer’s leave is available for shorter periods than that, paid carer’s leave, that is.

    Stu: This is an interesting question. Can elderly staff be addressed first regarding standing down without buying into discrimination?

    Ed: Again, a really good question. I spoke to a friend who happens to be a client as well and runs a grocery store, and they wanted to do that, thinking that they were doing the right thing by elderly staff. There is a risk of discrimination. Unlike the UK at the moment where there has been particular isolation guidance from the government with respect to people over a certain age, that hasn’t happened in the same way here yet. So, if it’s a staff member that wants to be at work, and you are complying with your health and safety obligations, to protect those staff by self-isolation and so forth. There’s nothing from the government at the moment that suggests that you should send them home for being older.

    It might be slightly different for pregnant staff. By the way, there seems to be a particular risk relating to pregnant staff. I’d urge small businesses to consider their obligations in terms of safety to any pregnant staff members and to whether you need to help them by allowing them to self-isolate. But again, that’s not the government advice at the moment, so be very careful not to go over and above the government advice.

    Stu: One straight from the site here, Ed, why isn’t Employsure staff working from home if they aren’t very busy? Is Employsure not able to provide the social distancing requirements?

    Ed: No, a really good question. So, our company position is this, and I’d urge you to use this yourself as well as that we are working to government advice. We will not go below government advice. We’re not going to ask our staff in any ways to compromise safety at a level below what the government is advising. On top of government advice so that we have our own operational requirements as you will with with your businesses. So, that’s our two stages for us. So, we predicted that our calls from clients would go through the roof last week. And what we wanted to avoid happening was limit or reduce the risk of happening was someone coming into our workplace and infecting all the other staff with COVID-19. The best way to limit that happening for our frontline staff that we needed to take those calls from clients was to reduce the number of people in the office. So our first stage was to send people home to work from home that weren’t frontline, for example, our finance team, IT team, HR team, internal HR team.

    The second phase has been to say, “Okay, now we’ve got just the frontline staff in the office, let’s get them home as well.” Because if they’re not working together, then we reduce the risk of cross-infection as well. So, that’s why we’ve sent people home. It’s not that we couldn’t do self-isolation at work. We could, albeit that having lots of people in similar roles in offices risked cross-infection, even with self-isolation measures, and we wanted to reduce that further so that we can carry on helping our clients.

    Stu: During this period, can we ask our employees to do different roles than what they were actually originally employed for?

    Ed: You can certainly negotiate that with them as part of a consultation with them, so asking them to do reasonable alternative work. A lot of contracts, if you have them in place with your employees, will have a provision relating to that as well. But you can sit down and say to staff, “Look, these are our problems that we’re working through. We need to reduce our wage bill. Or, “Your job currently doesn’t have work coming into it.” So, I think, for example, some businesses might have their sales cycle entirely interrupted. So if you have staff that specializes in sales, it may be that there’s no work that they can be doing at the moment, so you might look to speak to them about redeploying them into other aspects of the business, and you can consult with them on that.

    Stu: Getting a fair few questions coming through from close-contact employers, such as beauty and hair, etc. Can we let staff go because of the downturn in trade, even if we’re not one of the businesses forced to actually close?

    Ed: Again, good question. So, Scott Morrison specifically said last night that hair salons, beauty salons, and so on, are not affected by the shutdown. So, the first thing to stress is that you are permitted to be open subject, again, to social distancing requirements. How you do social distancing if you’re doing someone’s hair is a very tricky question for me, I don’t know how you do do that, but that’s the current position. But I am appreciative that notwithstanding the rules or the oddities in them that people are seeing a reduction in business as people social distance themselves. Now, if they are social distancing, you’re seeing a reduction in business. First of all, you don’t have a stand down situation.

    There hasn’t been a stoppage of work, because you haven’t been caught up in the shutdown provisions. But you do have a slowdown potentially in your revenues, which then leads on to the question of, maybe you could do redundancies, maybe you’ve got casual staff and you can give them notice that you’re not gonna be able to offer them more shifts, they can go on to Newstart and so forth. Maybe you can negotiate with your staff about alternative hours, if they’re full-time or part-time, so that they can start to share the pain with you a bit.

    Stu: We’ve touched on this, but it’s a very specific question, again, can you ask staff during this period to voluntarily take a pay cut?

    Ed: You can ask. There’s no obligation on the staff members. So, again, I think the key to all of this is in employment relations, we call it consultation, which is sort of it’s such a technical word that sort of mystifies it all a bit. Ultimately, what it’s saying is you need to communicate with your staff. Make sure, by the way, that you’re documenting these communications. Communication under pressure is such a difficult thing. You could end up with miscommunication, people hearing one thing when you say another, so make sure you document it. You have people there. Maybe it’s a colleague sitting, taking notes of the meeting and so forth. But you can ask staff as an alternative to future provisions or outcomes like redundancy, “Would you consider a wage cut?” Subject, of course, to minimum wages. Be very, very careful not to start slipping under minimum wage rates.

    Stu: Again, Ed, you’ve touched on this, but it’s coming through as a narrative. Again, in order to maintain cash, should we be putting off paying invoices?

    Ed: Look, I’m not claiming to be your business mentor here. I can only tell you what I’m doing, which is not doing that. I will be paying all my invoices as and when they become due until I have challenges with my cash flow. And in which case, I’ll be having to look at which costs I can reduce in the business. I’ve just never been a fan of delaying invoice payments. Just as matter of principle, I don’t do it. We’re a subscriber here to the Australian Business Association scheme, whereby we pay small businesses on time and make sure that we do that.

    Stu: A very specific question. Can a medical receptionist refuse to wear a mask?

    Ed: Refuse to wear a mask? Yeah, it’s funnily enough, this came up for me internally today. I got asked by one of our staff members whether we could provide masks. And my response to that is we are complying with government advice on this. I’m not aware of government advice being that in any industry, there is a requirement to wear masks. So, the short answer is yes, someone can refuse to wear a mask because there is not a requirement from the government that you have to wear masks in those circumstances unless it’s normally part of the requirements in your industry, such as for nurses, dentists, medics. That’s a different question. But in the situation of the COVID crisis, I’m not aware of the government requiring anyone to wear masks.

    Stu: Again, we’ve touched on this a bit. It’s a very specific question. What are the legal ramifications if I retrench now?

    Ed: If you just click your fingers, send a text message, whatever, to give a call to your employees and say, “I’m retrenching, making you redundant, will await pay whatever my obligations are,” the legal ramifications are significant. You may well get sued for unfair dismissal, if that was available to the employee, in response to that. You could get sued for other factors, such as discrimination, if it was felt, that you picked, say, one particular staff member and not others. So let’s say you picked a female staff member versus a male staff member that you could equally have taken action towards. And you could find yourself liable for significant expenses from the Fair Work Commission.

    Stu: Things are moving very, very fast. What is the best way to handle the rate of information coming through and to basically dispel any confusion?

    Ed: So, for me, I’m doing a couple of things. First of all, I communicate with my staff every single day without fail. I found that quite a useful tactic. I’ve seen that the UK government is doing it, and it seems to be working well as a communication tool. It’s not being done so well over here. But just having a consistent time each day that I send out a written communication, an email one, just giving some insights to what we’re doing, what our position is, giving some comfort around that. And really a call to rallying the troops to say, “Guys, we’re doing a really important thing here in helping small business. I know it’s stressful. Thank you very much for that.” So, high communication touch points.

    On top of that, I digest and review the media streams and look at the government websites, particularly for updates on that. And in so far as they are relevant, I have a 8:30 meeting every morning with my management team. We digest that information, and we work our communication plan over and above my daily message. So, for example, on the school stuff this morning here, we have to go and digest what that actually meant. Then, we went out to our staff to say, “This is what’s happening. What does it mean for you? Please speak to your manager and so forth.” Look, there’s a fine balance here, but I’d always err towards overcommunication, but try not to stray into drama with your staff would be my message. Everyone’s under a lot of pressure at the moment, and I think that just as a matter of leadership, it’s our responsibility to maintain some calm in our workplaces.

    Stu: And a very specific one. There is talk in our workplace of resignations and taking their accrued entitlements with them, which could actually hurt our business. What are our rights as employers?

    Ed: So, if someone is at risk of redundancy or stand down or anything else, they’re just worried, and they resign and they ask you to therefore pay out any accrued leave and so forth. And your rights, as an employer, aren’t great in that situation. They can do that. If, for example, you’re unable to pay that and that would send you into financial difficulty, you can start to speak to the relevant authorities about that. But it’s you have a legal obligation to pay out any annual leave, any other accrued entitlements they’d be entitled to have on resignation, including their notice pay.

    Stu: What about if I had staff on probation periods?

    Ed: Good question. So, if you were looking at making redundancies, staff on probation periods might be the people that you’d consider first in that period. That’s the reality of the situation. It’s sometimes called last in, first out, LIFO. And the reason that you might do that is that they’re typically easier to work through a termination process because the law provides some protection to people that don’t have significant periods of service with you. Sorry, less protection to people without significant periods of service, depending on your size of business and so forth. And it may be that those are the people you first consider to make redundant.

    Stu: A very specific question here on the screen now. We have no income coming in for the next six months, but not a business stated to cease operation by the government. We don’t want to liquidate, but also don’t have resources to pay staff and want them to go to Newstart. Can we just give them the separation certificate?

    Ed: So, you have no income, you haven’t been shut down, so stand down is not available to you, and you want to keep the business dormant essentially until, in six months’ time, where you may be able to reignite it. So, in that case, it may be that you’ve got no alternative to make redundancies if they are full- or part-time people. You have the ability to apply to the Fair Work Commission if you couldn’t afford to pay their redundancy payments to see if you can reduce those. But it may be that you’ve got no alternative, but to make them redundant, give them separation certificates so that they can move on to looking at Newstart. If they’re casual workers, that’s a simpler approach. If they’re full- or part-time, you’d need to go through a redundancy process.

    Stu: If I employed contracted workers and there’s still one to two months left on their contract running, and I have to stand them down?

    Ed: It depends on what the contract says with regard to them. You may have provisions in there that maybe you can bring that contract to an end in shorter term than that. If you don’t, then you’d have a contractual liability to them for the remaining two months, even if you terminated the contract today. It’d be like a contract with any formal supplier in that way.

    I can see, so just one interesting one that’s cropped up here, do we have to, this is Tim Kane, apply for PHYG subsidy, or is it automatically applied by the ATO? The answer is, my understanding to that is that it will applied through your BAS statement. So, if you qualify for the subsidy by virtue of the size of your business and the people you are employing, that will be applied back through the BAS process. You don’t need to individually apply for it.

    There’s a ton of questions coming through here, guys. I’ve got another one here that I’ll quickly answer. I’ve got so many that I’m losing track of them here. I run on maintenance and lawn-mowing business and I always have to work as in a car, should I stop doing this practice? From Mark Stevenson. So, the answer to that is, if you can’t do social distancing within the car, one and a half meters, you’re probably gonna struggle to do that, then, yes, you shouldn’t have two people in there. That’s the guidance given by the government that you should be social distancing one and a half meters, and so forth. So, if you can’t achieve that within in a car, then, yes, you’ve gotta change that practice.

    Stu: If a restaurant transitions to takeaway only and then I have to reduce the amount of staff I have, better to stand down or make redundant?

    Ed: So, quite in the restaurant industry, they’ll be casual staff, so making them redundant isn’t a process that you’d go through. You’d be essentially standing them down, turning them to Newstart. But in the restaurant industry, if… And interestingly, given that you’re allowed to do takeaway, I suspect that you’re gonna be allowed to stand down, that it’ll be considered a stoppage, albeit that really what it is, is a business slowdown, because part of your business has been taken away, not all of it. If you’ve got permanent staff, full-time, part-time, it would typically be better to stand them down if you believe business is gonna return and come back during that period. It will cost you less to stand down than it will to make someone redundant.

    So, guys, these questions are coming thick and fast. It’s only a reflection, I think, of how difficult everyone is finding it. It reflects on how many calls we’re receiving outside today. I’d love to thank you very much for raising those questions. As ever, we’ll get back to you over the course of today and reply to each of your questions on here, and giving you a phone number to call if you’ve got any more questions to see how we can help you. Thank you very much for attending, guys. As ever, employsure.com.au/coronavirus, if you want information. And we’ll do another update tomorrow and keep this going during the week to see how we can help you guys throughout this challenging time. Thank you. Bye-bye.

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