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Can I change or scale down my businesses operations in response to COVID-19?

March 27, 2020

This information sheet contemplates some scenarios that may arise in your business if work reduces or a stoppage is enforced. The information provides options that you may want to consider to help manage staff in the appropriate way to protect you and your business. 

If you are considering scaling down your operations for any reason please seek specific advice prior to making any changes.

Modern Awards such as the Building and Construction General Onsite Award 2010 (Onsite Award) sets out a range of requirements regarding working hours, working arrangements and redundancy that may impact your decision making regarding these matters.

Q. What should I do if I want to change or scale down my business operations?

You must firstly consult with your employees about any potential views:

  • Major workplace change. 
    A major workplace change includes changes in production, program, organisation, structure or technology that are likely to have significant effects on employees.
    Significant effects on employees includes:
    o Termination of employment, major changes in the composition, operation or size of the employers workforce, alteration of hours of work, the need for employees to be retrained or transferred to other work or locations or job restructure.
  • Changes to rosters or hours of work.

Q. How do I consult with my employees?

Consultation must comply with the requirements set out in the relevant modern award or enterprise agreement. It is important that a consultation process is genuine, this means  that employees have the opportunity to provide feedback to influence the outcomes, and employers consider such feedback before implementing any changes.

Example: You are considering making some staff redundant as result of a downturn due to COVID-19. Before taking this action, you should take the following steps:

  1. Consult with your employees about the potential for redundancies.
  2. Provide your employees with an opportunity to give feedback. This might include alternative options, e.g. - reduced hours of work agreed across all of the workforce, to effectively eliminate the need to make employees redundant.
  3. Genuinely consider this feedback before making the decision to implement any change.

Where consultation processes are not followed, terms within modern awards and enterprise agreements provide for a Dispute resolution process, through which disputes can be referred to the Fair Work Commission for resolution.

Q. How can I reduce my staffing arrangement?

Some options include:

  • reducing employee hours by, for example moving full time employees to part time by agreement;
  • directing employees to take excessive annual leave. An employee will have excessive annual leave if they have accrued more than 8 weeks paid leave; 
  • allowing employees to take annual leave in advance of accruing it by agreement;
  • asking that employees take any accrued portable long service leave (if eligible) or accrued annual leave; or
  • agreeing to work without a Rostered Day Off.

If you would like further information on any of these options please contact a Workplace Adviser.

Q. Can I varying hours of work? 

Yes, however penalty rates may apply.

Under the Onsite Award ordinary hours of work are 38 hours per week between 7am and 6pm Monday to Friday.

Hours can be worked outside of these times, however will be considered overtime and must be paid at the rate of time and half for the first 2 hours and double time thereafter.

Employers can only require an employee to work reasonable overtime. In order to determine if overtime is reasonable the following must be taken into account:

  • any risk to employee health and safety from working the additional hours;
  • the employee's personal circumstances, including family responsibilities;
  • the needs of the workplace or enterprise in which the employee is employed;
  • whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
  • any notice given by the employer of any request or requirement to work the additional hours;
  • any notice given by the employee of his or her intention to refuse to work the additional hours;
  • the usual patterns of work in the industry, or the part of an industry, in which the employee works;
  • the nature of the employee's role, and the employee's level of responsibility;
  • any other relevant matter.

Q. Can I make an employee redundant?

Yes, however before making any employees redundant it is important to ensure that the redundancy is a genuine redundancy, in order to protect you from potential unfair dismissal claims. 

It is a defence to an unfair dismissal claim if the dismissal is a case of genuine redundancy, which occurs when the employer no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the business. 

A down turn or slowdown in business would be considered a reason to support a genuine redundancy. However a dismissal will not be a genuine redundancy if it would have been reasonable for the employee to be redeployed in the business (or an associated business of the employer). 

Under the Onsite Award an industry specific redundancy scheme applies and full time and part time employees made redundant are entitled to a redundancy payment.

The amount of redundancy pay will depend on your employee’s length of service in accordance with the following:

Length of Service Redundancy Payment
less than 12 months 1.75 hours pay per week of service 
1 year but less than 2 years 2.4 weeks pay plus, for time worked in excess of 1 years, 1.75 hours pay per completed week of service up to a maximum of 4.8 weeks pay 
2 years but less than 3 years 4.8 weeks pay plus, for time worked in excess of 2 years, 1.6 hours pay per completed week of service up to a maximum of 7 weeks pay 
3 years but less that 4 years 7 weeks pay plus, for all service in excess of 3 years, 0.73 hours pay per completed week of service up to a maximum of 8 weeks pay. 
Worked more than 4 years 8 weeks pay 

If you choose to go down this path you will also need to provide notice of termination or payment in lieu of notice in accordance with the following:

Period of continuous service Notice 
Not more than 1 year 1 week 
1 year but less than 3 years 2 weeks 
3 years but not more than 5 years 3 weeks 
More than 5 years 4 weeks 

Should you require further information on this topic please call a HIA Workplace Adviser on 1300 650 620.

Coronavirus Response

Date: 27 March 2020
Reference Number: NFSIRR1317