Critical Consultation


Critical Consultation

14 September 2020

As government subsidies change in the coming weeks, there may be new decision points for SME owners and managers. Unfortunately, the coming weeks could be crunch time for some businesses who are still dealing with reduced revenue opportunity and now face the end of the moratorium on creditor petitions.
These factors could result in SME employers facing tough decisions again in relation to how to balance the financial needs of the business with legal requirements of managing major workplace change and / or redundancies.

In March, many SME owners and managers watched as larger organisations stood down or made many employees redundant. The view presented by the Media was that this all just happened and assumed that they could just tell employees that there is no longer a role for them and hand the employee a redundancy payout or tell them what would happen to their hours/position. Unfortunately, for some this resulted in even more stress and anxiety as the employee contacted Fair Work.

So, what do you need to be aware of to avoid this? Here are some simple tips.

– If you have employees who are covered by a modern award or enterprise agreement, you will need to consult with employees about any major changes to productions/programs, organisations, structures or technologies that are likely to have a significant impact on employees.
– Major changes are defined as having a significant impact on employees. These are usually defined by the award or agreement and typically include termination, loss of job opportunities, alteration of hours worked, the need for transfer of employment or retraining.
– If you are considering any of these changes, you must hold discussions with the employees (and potentially their union) and give them a genuine opportunity to present alternatives.
– You must provide information about the changes and their potential effect on the employees in writing. While this does not require you to share confidential information, it does require more than a short summary.
While the Fair Work Commission and Federal Courts may be a little more understanding during COVID-19 than in normal years, failure to consult your employees could result in hefty fines. Given the reason for the change, the potential for these fines couldn’t come at a worse time.
To avoid this Impact HR recommends:
– slowing down your decision making so that a reasonable consultation period is included in your process.
– Clearly documenting what the expected change is and why.
– Ensuring that employee suggestions are reviewed with care. Could there be a different solution that you weren’t aware of?
– Act with the right balance of Head and Heart.

If you are considering reducing your team’s hours, changing their role or making them redundant, Impact HR is here to support you and your team through the process to ensure there is no risk of a claim.

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