Facebook Live Event 7: Seeking New Opportunities

Published March 31, 2020 Views: 4


Ed continues to answer your pressing questions on the tactical concerns faced by business owners at the moment. He also warns of the risks associated with stand downs and redundancies, and how to avoid them.

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 7: Seeking New Opportunities

  • Transcript

    Ed: …here for our daily midday briefing, question-and-answer session about all things workplace relations relating to COVID-19 and the challenges that you are no doubt facing at the moment in employing your staff. So, a couple of shout outs just to start off with…of clients of ours that have hit my radar in the last 24 hours. Really interesting one for me, a security client of ours called SX Protection that we work a lot with and have done since when we started the business.


    I was having a chat with their owner and founder [inaudible 00:00:38] about whether there were any opportunities for him in things like security on supermarkets which you are now seeing in countries like the UK where they’re actively restricting the number of people in spaces like that and so forth. And he told me he’s already seeing that, and there are some great opportunities out there if you’re looking in the right places for them in his particular case. So, well done, those guys.


    And then the second one was, last night I spent an hour or so on a webinar with another client of ours called TradiePad, a platform for tradies, training platform for them. And it’s fascinating. Loads of tradies on a webinar speaking to us about the various problems. They had some different speakers on not just workplace relations, looking at the accounting side of everything, and other aspects of the challenges that businesses are facing.


    So, just two shout outs there. I thought it really great that TradiePad had set that up and were helping their clients in that particular way, and people seemed very engaged. There might even be a few that have found themselves on here today as a result. And if I repeat myself, too, I apologize.


    So, just gonna cover a couple of things today before doing a Q and A. Setting up for next week to start talking more and more about opportunity and moving perhaps away from the immediate tactical concerns that people have had. We will continue to answer those questions as things change. I suspect I’m not…I don’t have a crystal ball. I suspect that we’re going to see a big change over the weekend here in New South Wales and in Victoria. There’s a lot sort of murmuring and rumoring that there’s gonna be a stricter form of lockdown here. Don’t go rushing to make decisions on the back of that.


    I say it because of that mantra that we here are following, which is, prepare for the worst and hope for the best. Preparation for the worst here is that we know that if there is a stricter lockdown here in New South Wales and Victoria or elsewhere even, we will see a spike in calls as a result from our clients. And rather than deal with any chaos on Monday of people not being here available to answer calls, we’re gonna make sure that those that are still in the office are sent home at the end of day today so that they’re sitting ready and waiting on Sunday and Monday should there be any changes. That’s our version of preparing for the worst and hoping for the best. I recommend that you do that yourselves.


    The second thing that I’m going to just flag is that there’s quite a lot of conflicting information at the moment about the stand-down piece. I know we’ve talked about it quite a bit here, but I wanna keep banging the same drum because there is so much confusion. It’s not aided by the term being used pretty liberally and loosely in the media at the moment. There’s a bit of confusion as to what stand-down is. So, on the one hand, you’re seeing in the media today reports about some of the big retailers taking a proactive decision to shut their stores. And consequently, they’re talking about how they have stood down their staff.


    Now, there may be a possibility in the enterprise agreement that they’ve got running that they can stand down in those situations. But technically speaking, that’s not a stand-down under the Fair Work Act here in Australia. I’m not privy to the advice they’re getting on that, but what I can say is this. If you are unilaterally telling your staff that they are not going to have work…they’re permanent staff and they are not gonna have work, and you’re therefore essentially putting them unilaterally on unpaid leave, there is a risk for you if that’s not a proper stand-down that in the future, those staff members work that out and subsequently seek to recover unpaid wages from you. The last thing that we want is for small businesses to be on the other side of this when they’re trying to bounce back like that spring that we’ve talked about, and they find themselves subject to employment relations claims in the Fair Work Commission.


    So, guys, don’t read the paper and assume that that can replace very technical advice on this. I’d express caution before rushing to a stand-down. I don’t know what advice those big retailers have got, and they may have some permission negotiated in the EBA. But generally speaking, the better article that I’ve read today on this was bout a barber here in Sydney who is saying, “Please, can you close me down in order that I can stand down? At the moment, the government is sort of tying one arm behind my back and telling me that I’m restricted in these ways, social distancing, which seems faintly farcical in the context of cutting someone’s hair.” They said half an hour, then they retracted half an hour. He’ getting cancellations, and he’s trying to call those cancellations back when he can carry out haircuts for over half an hour. And it’s a mess.


    And consequently, what he has is reduced inflow of business and still has staff to pay. That reduced inflow of business doesn’t amount to a stoppage under the stand-down provisions. He knows that. He’s worked it out. Maybe he’s worked…well, they watch this livestream. But if he has, it would be…I’d be doing my job and giving him the appropriate health warnings about necessarily using…or sorry, inappropriately using stand-down when there is not a stand-down situation.


    So, I’m gonna keep banging the drum on that health warning because I think it’s one of the biggest risks that will face small businesses when it comes to bounce back. And we want to make sure that we’re protecting you as far as we can. Whether or not you’re clients, that’s what these livestreams are all about. Ultimately, it’s to try and help you through this really difficult time.


    Now, on that note, what I’m gonna do now is I’m gonna spend a bit more time today than usual going through all the various questions and answers. I’m conscious that we’re getting such a volume of questions that we are struggling to keep up with them on a daily basis. And we wanna just make sure that we’re actually doing you the service that you’re asking for here and answering those questions rather than having me prattle along about what it is I wanna talk about. So, on that note, I’m gonna turn to Stu [SP] and he’s gonna hit me with some of the questions that are coming through.


    Stu: These have come through over the last 24 hours, too, as well.


    Ed: Correct.


    Stu: If someone gets sick after being stood down, are they entitled to sick leave?


    Ed: If they get sick after being stood down, they’re on a no-pay position. So, no. But if they are sick before, there is an expressed provision that says that if you stood…say, someone was sick on Monday and was signed off for the rest of the week and you stood down your employees on Wednesday, then they carry on being on sick pay until their return date. The Fair Work Act expressly deals with that, but it doesn’t talk about what happens if you get sick after stand-down. But the reality is that you’re on leave without pay, which trumps the consequent sick leave.


    Stu: Are retail tenants in a shopping center with no full traffic at all allowed to renegotiate their rent?


    Ed: So, that’s what a lot of the media has been about today. I think that those that have perhaps got more clout with landlords, big retail groups…I noticed one. I think Premier said in the press today that they’re simply saying to their landlords that they won’t pay. And the landlord has responded and said, “We’re businesses, too,” which is very much a reality. There are big and small landlords out there. So, simply stopping your pay to landlords is likely to be contractually dubious. I’m not a property lawyer, and I’m not gonna stray too far into that. But the better practice, like any supplier, and indeed to your employees and as suppliers of labor to you, you should be looking to negotiate with people rather than to simply take strong unilateral decisions that might cause you problems.


    Stu: If you do stand down staff, can you then ask them to come back to do some casual hours?


    Ed: If you do stand down staff, can you ask them to come back and do casual hours? The casual hours wouldn’t be financially…assuming these are permanent employees that you’ve stood down, wouldn’t financially be the best way to do it. It would be by bringing them back in on the terms of their existing employment. However, if there is work for them to do, it does seem to suggest that there hasn’t been a stoppage of work in that way, which is what causes a stand-down. So, I’d query there whether there’s a true stand-down situation. If you have casuals who have been not given any further shifts… I’m tripping myself up now in trying to avoid saying the word stand-down because that’s not technically what that is if you just decided not to give casuals shifts because there’s a reduction in work. But then you have some work that’s coming through and you’ve maybe overbalanced and taken out too much of your workforce when you need them to support, then you can bring them back in for those shifts.


    Stu: I have a permanent staff member currently out on work cover. Can they be stood down due to the downturn in work?


    Ed: So, I’ve been asked this question a bit actually. So, someone’s already on work cover and they’re getting paid and the insurance provisions, they’ll carry on getting paid even if there is a stand-down. That’s a matter there between them and the insurer, and you and the insurer at that stage. But you should be picking up the phone to your insurer to explain to them what’s going on.


    Stu: What if an employee wants to stop working even though our industry is not shut down? Are they entitled to leave?


    Ed: If an employee wants to stop working even though the industry is not shut down… So, let’s look. There’s a couple of variants of this I’m seeing a bit of. One of them is an employee says, “I do not want to work because I’m protective of my safety. I don’t wanna get sick. I think I’m gonna be more exposed to illness if I come to work.” Now, if you are able to work within the parameters of the government guidance and that employee is able to work within those parameters as well but they’re being extra cautious, then strictly, what they’re doing is asking you for leave without pay. There is no obligation on you to pay them to not work if they’re able to do it. You might, as an employer, say, “Okay. Why don’t you take some of your annual leave,” again, if the permanent employees accrue annual leave. And they might accept to do that, or you could just say, “Okay. Can you do some of this work from home, if that’s possible?” So, that’s one range of variance around that.


    If an employee is simply wanting to leave the business, that’s business as usual. Someone’s free to resign during this time. If they resign when they’re on stand-down, that’s fine as well. They’re perfectly entitled to do that. There’s nothing stopping…an employee’s not handcuffed to you just because they’re on stand-down.


    Stu: Interesting question this one. Part of our business is essential, part of it not essential. Can we implement a partial stand-down? And what if staff refuse to reduce their hours?


    Ed: Well, I’ll answer it in two ways. I’d assume, first of all, that that’s from New Zealand because of the essential services question. So, New Zealand currently has a list of essential services, which are the only businesses that are entitled to be operating at the moment, have a look at whether your business falls into that definition.


    Over here in Australia, as at this time, the essential services definition is being given by federal government, Scott Morrison particularly, where he said, “Everything is essential.” So, there would be no such thing as something that is currently essential and something that’s not. There might be something that has been shut down by the federal government at this stage, part of which is still capable to run. So, the classic one is a restaurant or café that can do takeaway. So, the kitchen is still running, but on some reduced capacity. Wait staff are probably not required. Front-of-house staff might be needed in some capacity. So, in that case, our advice has been that there is the capability to do a stand-down on staff because there has been a stoppage of a certain type of work, mainly in-house dining. The fact that you’re able to carry on another form of work — takeaway — we think there will be a very practical view taken, and that you won’t be prevented there from stand-down.


    Stu: What if staff members choose to take leave without pay for, say, a month?


    Ed: A key on that question, Stu, is that the staff member chooses. So, yes, a staff member can choose to do that, and that’s an agreement between you and the staff member. They’d say, “I would like to take leave without pay,” or you ask them if they will and they say yes, and they consequently go out on leave without pay for a month, in this case. Good to define the boundaries of that time. The question I’m seeing a lot coming off the back of that is, does that staff member then have access to Newstart?


    Now, the government hasn’t been clear on this. What I would say and what I’ve been saying to people is this, is that you can agree with the staff member to say, “Why don’t you go on leave without pay and take Newstart? That is an agreement that we are making between ourselves subject to you getting Newstart.” So, if you go to go and get Newstart and they say you’re not eligible because you selected leave without pay, then come back and talk to me, and we’ll start talking again about what we’re gonna do. So, again, some consistent themes here, lots of talking, lots of openness, making sure that you’re being transparent with your employees, and we’ll start moving forward. We’re working to new sets of rules here, revolving sets of rules. And we wanna make sure that we’re constantly communicating with people.


    Stu: Can an employee access accrued leave while waiting for results from a COVID-19 test?


    Ed: Can they access accrued leave? So, if an employee has been sent home on the basis that they have evidenced some signs of COVID-19, then essentially, they’re on sick leave, and they should be paid if you’re saying they’re not fit to do the work. If they are showing no signs of it but they’ve self-isolated on government restriction and so on. Technically speaking, that’s because the government is stopping them from coming to work, not you stopping them from working and the employee is technically fit to. So, they would not get paid during that time on a baseline basis, but you can agree with them that they can access some of their leave if you’re amenable to doing that as their employer.


    Stu: Does super accrue during a stand-down period?


    Ed: Yes. During stand-down, all accruals and entitlements are there.


    Stu: A crystal ball question. How do businesses generally prepare for a total lockdown?


    Ed: How do businesses generally prepare for a lockdown? So, I’d almost ask some of you to respond from New Zealand to those businesses in Australia. One of the things I’ve loved seeing on here is businesses starting to talk to each other about this and offering up advice to each other around what’s happening in their particular location or what they’ve seen or what they’ve heard. Where I think that advice is not quite on point, I’m trying to jump in and make sure that we’re not heading off in the wrong direction.


    But in New Zealand, they had a total lockdown as of Wednesday at midnight. Now, in that case, what has happened is a list of essential services, which has been a term that’s been used and misused in Australia so far has been listed. Every other business has been shut down. You are able to operate from home if you can. But bear in mind, things like, you know, one of the classic ones as a consumer you might think doesn’t have a background set of circumstances, but you think, “Well, I can shop online, and I expect people to deliver to me online.” Now, there’s obviously a whole sequence of logistics and warehouse management and everything that sits behind an online retail business like that that would be stopped in New Zealand, say, for people that are in the supply chain for essential services, typically.


    So, what I’d expect if there is a total lockdown is a real contraction of the sort of businesses that can, A, open their doors at all, B, if they can’t open their doors, can usefully work from home, which may create more and more stand-down situations. And the reality is, I think that what we’re seeing in terms of the queues in Australia with Newstart are really the beginning of it largely through a casual workforce that has been stood down through hospitality particularly. And as that swells now potentially into retail and so forth, you’ll see more casual staff, and then you’ll see a wave of permanent staff, some of whom will have already unfortunately been affected. But you’re gonna see wave after wave now more and more people needing access to those benefits.


    Stu: Again, a general scenario question. You’re working from home as the employer. How do you maintain morale and efficacy?


    Ed: That’s a really good question. So, we’ve had parts of the business now at home for two weeks. I can tell you now the general theme was that after about three days, there was a lot of buzz and excitement. There was even talk internally about, “Wow, maybe we don’t need such big offices in the future. We can work from home more readily and so forth. I can tell you now that after two weeks, we are starting to deal with questions of frustration, potential disengagement with staff who are losing social contact. Remember, they’re in particularly difficult circumstances because it’s not just that they’re not working in the office, but they can’t go to sit down in their coffee shop, they can’t go to their gym. All of the other social points of contact that people would have if they were working from home typically starting to be eroded. So, how do you stop that?


    The basic principle is communicate, communicate, communicate. Do it frequently and with as much detail as possible. We’re doing some other things here like using social media to engage with our staff, doing some quizzes, doing online exercises challenges. We’re using an app that we can all log into to challenge each other to do exercise each day and those sorts of things. So, there are some creative things that you can do, but do start thinking about it because this…we don’t yet know how long it’s gonna go on for. But I can tell you now that human nature will be the enjoyment of working from home will start to wane.


    Stu: With regards to sales business, in particular a real estate business scenario, is in stand-down, what if the sales people are stood down effectively working from home are still taking and fielding calls from clients?


    Ed: So, if you’re a sales person and you’re working from home and you’re taking calls and actually working, then you’re not being stood down. You’re actually working and you should be recording and should be getting paid for that time. If you’d been told you’re stood down and it’s a genuine stand-down again because there has been a stoppage of work, but clients are still wanting to contact you, what I suggest is that the employer and employee speak to each other and say, “Hey, it seems that there are things that I need to be doing,” which is actually one of the questions you should be asking of your employee before you stand them down anyway. “Is there any work that you can be gainfully employed doing?” as an alternative stand-down. And if there is work that as an employer you want them to complete, you’ll need to pay them to complete that.


    Stu: Question to you. As the founder of the business and time is proving very elastic at the moment, what have you learned in the last week?


    Ed: What have I learned in the last week? I think a lot. We’re all moving quickly. I think one of the things that I have that I’m sure everyone else does as well is a certain level of disbelief that when I wake up each morning and then it’s almost like a start at that point and then a build during the day up to high level of belief and understanding and actually starting to make hopefully some good decisions, I’m sure, amongst some mistakes as well. We’re all moving so quickly that you’re not gonna do everything perfectly at this time.


    But one of the things I’ve had to learn to carefully do is to manage myself so that I am in turn able to manage my staff effectively and lead them. And part of that is ensuring that you are giving off a sense of control and understanding and leadership so that there is no spread of any concern or worry amongst your staff. Now, that’s not the same thing as pretending. It’s about appraising yourself with information and making well-informed decisions, and doing it confidently to convey that message to your staff.


    And one of the things that I do as a tool, I suppose, to try and measure or remind myself to do that is if I’m able to sort of slipping into victim or drama or catastrophe about what’s going on, I ask myself what the 50-year-old version of myself will think about this situation, in my case, 10 years’ time. That’s a… If anyone’s looking at me and saying, “That bloke’s 50 already,” it’s probably just because of the couple of weeks we’ve had.


    But the reality is I’d look back on it from that imaginary place and I say, “In 10 years’ time, I will look at this as a learning opportunity. I had absolutely no doubt about that.” Whatever the impact on my business, this will be a learning opportunity. And in 10 years’ time, well, it will have moved on and up from here in terms of what I’m doing. And I’d urge you all to do your own version of gaining perspective like that.


    Stu: Can people access long service leave even if they haven’t hit the necessary [inaudible 00:24:04] points?


    Ed: It depends on awards and coverage. I’d need to look at that in detail on a specific case. I’d be loath to answer that. I just wanna say as well, I think I’m concerned I’ve prematurely answered a question earlier about super accrual. Let me go and have a look at that. Don’t take my advice on that as right for the time being, which is, does super accrue when you’re on stand-down. I’m going through it in my mind as we are talking. I just wanna go and check and make sure I haven’t sent you in the wrong direction on that.


    Stu: If I take my children out of child care, can I refuse to pay the necessary contracted payments?


    Ed: I got a notification from the Child Care Center that one of my kids goes to this morning. There are hardship payments that you can apply for that they were saying to me this morning. So, have a look at those sorts of options first. It’s a bit like… The funny version is a bit like the landlord question earlier on. I was debating this with my wife last night. What’s your obligation to carry on making payments for services you’re not getting anymore?


    I’ve actually been quite surprised at the approach of small business. We are here, we’re trying to give alternatives to our clients, particularly those in need. And we’ve got a program of alternatives in place. But a lot of small businesses I engage with as a customer have taken a very generous view of just simply shutting down my payments to them and saying, “I’m not giving you service.” And there’s a bit of me that says, “Well, it’s not their fault.” I want to, as far as I can, contribute to their ongoing success because I don’t want this to finish and for them to not be there.


    So, I mentioned yesterday that example of a gym who is asking if their clients will pay 50% now and then for as long as they’re shut down, they will charge 50% to those clients going forward, just to keep the cash flow up.


    And we’re hearing some other versions about in gyms like renting out equipment and other aspects of ingenuity that’s coming through. I mentioned one yesterday of a business pivoting to make new product. I’ll try and think first. We’ll talk more about this next week in terms of opportunity. Before you rush to stop paying whichever small business that you’re engaging with, remember that we’re all living in a holistic connected world. And that’s part of the problem here is the more dominoes you knock over, the bigger effect, really.


    Stu: I’ve lost my job as a teacher. Can I put my admin person in my other business on part-time hours so I can work there instead?


    Ed: So, lost my job as a teacher. Can I put my admin person that I employ in a business I have on part-time hours so that I can go and do that work? The answer is, if they agree to do so, assuming there’s no stand-down situation. But just because you are short of work there, doesn’t mean you can go and then bump that admin person without their agreement.


    Stu: If you resign during a lockdown, does the resignation period stay the same?


    Ed: The resignation period does, but you work depending on how long the lockdown goes on. It could trigger an extra length of resignation period under the national employment standards. But in terms of the pay for your period of notice, you could still be on a stand-down if that’s what’s happened.


    Stu: We’ve answered this one again, but it keeps popping up. Permanent employees are in a stand-down situation. Do they continue to accrue leave?


    Ed: On a true stand-down, yes, accrue leave. If we’re using that word, that phrase colloquially and I urge you to not use it, then no, there’s no accrual of leave during a period of agreed unpaid leave.


    Good. So, lots of questions coming through thick and fast. I’m just gonna wrap up and do one more. I can see here one from Rebecca Chin who is a client of ours. Rebecca says this. We have a jewelry retail store who’s currently trading following the guidelines. If we are deemed closed by the New South Wales government, will this allow us to stand-down staff legally? Yes, if you are put into a position where you cannot trade, there’s a stoppage of trade. That’s the position. As of today, if you were to shut, you wouldn’t be able to stand down those staff. You would be able to agree things like leave without pay. My recommendation would be to wait and see what happens over the next 48 hours because it may well be that you can stand down your staff.


    Good. So, we’ll, as ever, look at the questions. The other thing I’ll do is I’ll put a comment on here about that accrual of super during stand-down to go and check what that is. It sort of crosses over with accounting advice, and it’s a bit tricky. I wanna make sure I get it right because it’s not an insignificant cost if it is accruing. And I’ll put a comment up there to make sure I get that right for you.


    Thank you very much, guys. So, I’m just seeing all these comments coming through. I wanna make sure I’m answering them. I feel bad turning it off at this stage, but thank you very much. We will be here again on Monday. A couple of final shoutouts, employsure.com.au/coronavirus, employsure.co.nz/coronavirus. Lots of resources there. We’re updating them regularly. Have a look on there. We’re also… There’s the opportunity for certain affected businesses to get some at-cost help from Employsure if the service we’re providing here isn’t in enough detail.


    Thanks, guys. Good luck.

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