After a crisis, you may need to decide if you can continue to employ your staff in the short, medium and long-term.
During the recovery phase, here are some tips on how to manage your staff:
- make a thorough appraisal of the short, medium and long-term situation
- stay calm to avoid your staff becoming anxious
- listen carefully to staff advice and concerns
- keep everyone informed
- maintain normal procedures as much as possible
- take charge and show leadership.
Three key areas to consider are:
1. Reviewing your staff structure
If the success of your business is closely tied to the skills or reputation of yourself or your managers, then this may give you some flexibility when deciding whether to retain staff during and after a crisis.
Questions to ask include:
- Should the existing mix of skills in your business be retained or broadened?
- Can any critical skills be outsourced to contractors, rather than retaining permanent staff?
- Will training be required if we ask remaining staff to take on broader responsibilities? Would this involve external or on-job training?
2. Managing a staff restructure
Before considering retrenching staff, explore all the options that may enable the business to retain staff.
Option 1: Invite employees to take accrued leave
If a business is confident that the impact of the crisis is only short-term, it can invite employees to take their accrued leave entitlements with the understanding that once the business gets past the short-term period, the employees will be able to return to their roles again.
This option allows a business to buy time in getting the business up and running again without losing valuable staff members.
Option 2: Negotiate leave without pay or part-time
If the business does not want to lose valuable and knowledgeable staff and does not have the cash flow to maintain the current staffing roster, it can negotiate with staff members to take leave without pay or have full-time staff members work part-time.
Again, the business would need to be confident that the impact of the crisis is only short-term and that staff would resume their roles again in the long term.
Option 3: Consider contracting arrangements
To reduce the ongoing commitment of paying regular wages, a business can consider changing staffing contracts by switching from a permanent arrangement to a contracting arrangement, which will allow staff members to potentially earn other income.
However, there must be genuine prospects and intent for contracted staff to attain other work; a simple arrangement whereby a business avoids its responsibilities as an employer by engaging dedicated contractors may not be conscionable nor legal.
Option 4: Find staff other temporary employment
Negotiate with other local businesses to employ your staff on a temporary basis. Note, this option can have legal and practical complications if the location of the work is less accessible to the staff member, or if the job requirements are substantially different from those of your business.
3. Making your staff redundant
If you have established that the business can no longer retain all staff members, and the crisis impacts will likely affect the long-term viability of your business, making staff redundant could be an option.
If you choose this option, you will need to consider the following:
- Check the Industrial Award, the Employment Agreement, or the business's own Terms and Conditions of Employment, to be sure of your legal obligations in negotiating with staff or making any changes to their employment arrangements.
- Seek advice from an employer organisation such as the Victorian Chamber of Commerce and Industry
When making an employee redundant, you will also need to consider:
- specific redundancy payments
- the potential for unfair dismissal claims
- accrued leave and entitlements
- your ability to make it clear that the retrenchment is necessary due to a downturn in business, rather than the unsatisfactory performance of the employee
- the way in which the retrenchment is communicated to the employee
provision of adequate notice and support to the outgoing employee, such as references.
It's recommended that you discuss the changes with affected employees before putting the changes in place.
If you decide to go ahead with restructuring, make the process as easy as possible on staff by explaining why the restructure is happening, allowing time for one-on-one feedback, and providing a process that supports their mental well-being.
You'll also need to make sure that staff who have not been made redundant are also supported and are kept informed so that they are not left feeling disillusioned or uncertain about their own future.
Further support and resources
Under the Fair Work Act 2009, businesses affected by a natural disaster may be able to change their employment arrangements, including standing down staff.
The Fair Work Ombudsman has information on employment entitlements during disasters or emergencies.
For further information, visit the Fair Work Ombudsman, or contact the Fair Work Infoline on 13 13 94.