Circumstances have changed due to the outbreak of coronavirus. Our health system, our social interactions, and our lifestyles in general have changed. However the most important changes that are affecting our economy is the changes surrounding people’s jobs and uncertainty of their employment status.
The new situation may be devastating for the employees but may also be confusing and daunting for employers who are concerned about the survival of their business and their legal responsibilities towards their employees.
Working from Home
Many small and big business have closed their main offices or alternatively reduced the number of employees at work offices and the employees are fully or predominantly working from home.
Obviously working from home is not an option for all business and many employers are left with no option but to stand down their employees or seek that the employees take annual leave or leave without pay.
There are several options that employers may consider which we will look into it from a legal point of view:
Dismissal of Employees
Employers may instruct their employees to seek annual leave, or leave without pay on a temporary basis until their business picks up after the COVID-19 pandemic is over.
However due to the uncertainties surrounding the duration of the pandemic it is not clear how long employers would be able to use this strategy to keep the employees on the book.
Under these circumstances it should be established that there is no useful work for the employee to perform and this exercise requires due consideration and should be decided based on the factual circumstances of each case.
Before making any such decision, the employer should also give substantial weight to the employment agreement and any other contracts the employer may have with the employee.
A stand down may have serious consequences for an employee who may potentially lose their livelihood and income for an uncertain period of time. Hence it is a decision for the employer which requires considering the relevant regulations and agreements to avoid any future lawsuits when all the dust settles.
Redundancy
Whilst redundancy may be a safer option for employees and definitely a more economically beneficial outcome for the employee compared to the “stand down” option, it may not be considered viable for an employer whose business is already suffering substantial loss.
Therefore it would be beneficial for both employers and employees to consider all the facts and options and come to a mutual agreement with outcomes such as temporary reduced salary, part paid leave, or reallocations of the jobs to the employees on a temporary basis to keep them on the payroll.
Conclusion
At the end of the day the government and authorities such as FairWork Ombudsman encourage employees and employers to work together to find the most beneficial and workable solutions that suit their individual workplaces and circumstances.
To do so it is very important that employers and employees seek legal advice and assistance to provide the best tailor-made solution for each individual business.
Please do not hesitate to contact one of our efficient solicitors at Pavuk Legal for advice and assistance.
