Redundancy or another option? Tough decisions for employers – Coronavirus

The past few weeks have been a testing time for many businesses, particularly service-based business such as travel, events and hospitality operations where redundancy has featured heavily and casual workers have lost incomes. Industries outside these though, have now begun to be hit. Our most frequent enquiry this week has been from non-essential service businesses wanting to understand whether they can reduce employee hours lawfully, rather than redundancy.

Many are feeling or predicting a downturn in business and are looking at expenses, to consider how they can reduce operating costs and make it through this difficult period. However, the expense that has the human element – employees – is always the most heart-wrenching of decisions to make. Most business owners and leaders are acutely aware that the decisions made in this regard will heavily impact employees and their families, and we are hearing that many are losing a lot of sleep over this.

Going through a redundancy process is one option. Redundancy applies when a position is no longer required to be performed by anyone. Although it is clear that redundancy may be a valid pathway for many businesses, there are strict laws which outline how a redundancy must be carried out and also notice and redundancy pay may apply.

Whether going through a redundancy process is the right option for your business will depend on a number of factors which you will need to weigh up and seek advice on. There are other options though, depending on how heavily impacted your company is and how long it is able to weather this storm. Many businesses are preferring to consider other options at this time, including letting go of casuals and exploring the idea of temporarily reducing hours of permanent staff. Be warned though, in most circumstances, employers cannot reduce hours or permanent staff without agreement. Attempting to force an employee to accept conditions they aren’t comfortable with could lead to the employer facing the Fair Work Commission.

It is important to note that your decisions now are subject to laws and legislation and there are severe penalties for getting it wrong – Coronavirus will not be a valid excuse. The above points do not constitute advice, therefore before acting speak to a professional such as Industryus HR who can help you navigate through this complex time.

We offer a free Introductory Call for new enquiries. Get in touch so we can discuss your situation in confidence. 07 5655 4047 or book your call here.

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