Managing Your Staff and Costs
We share this information as a guide and is not the entire post, but an excerpt and is not industry specific and suggest if you have Real Estate specific questions you refer to your State industry body or Employers Federation.
What are the options for managing labour costs?
We suggest that organisations who are experiencing a reduction in work or anticipate that they may experience such a reduction, consider the following options:
1. Consulting with employees about a temporary reduction to days or hours of work for some or all employees (typically by individual agreement with each staff member). Typically, consent is required;
2. Requesting employees to take annual leave, long service leave (where available) or unpaid leave for all of part of their working week. Consent is required;
3. Directing employees with “excessive annual leave” to take annual leave - certain rules are in place and procedural steps must be followed depending on whether the employee is award/agreement free or covered by an award or enterprise agreement. This requires careful forward planning. For most award covered employees, 8 weeks’ notice must be given and an employee’s resulting annual leave balance after taking leave must be at least 6 weeks. Consent is not required but legal requirements must be met;
4. Transferring employees from quieter parts of the business to busier parts of the business - this may be within the scope of an employee’s current terms and conditions of employment or it may be by negotiation with each staff member. It may involve the employee’s remuneration remaining unaltered or may involve an agreed temporary or permanent reduction when moving to lower paid duties. Typically, consent is required unless the contract permits the change;
5. Standing down employees for a fixed period of time – where an employee or group of employees cannot be usefully employed because of a stoppage of work for which the employer cannot be held responsible, you may be able to stand down those employees without pay. The precise requirements may vary depending on the situation: a) The Fair Work Act 2009 (Cth) contains provisions that allow an employer to stand down an employee during a period in which they cannot be usefully employed, unless an enterprise agreement or contract of employment applies that provides for stand down for the circumstance of stoppage for work; or b) where there is a stand down provision in an applicable enterprise agreement or contract of employment that deals with the circumstance of stoppage for work, then that provision must be complied with. Stand downs authorised by the Fair Work Act effectively overcome the contractual obstacles identified above, and operate as an alternative to termination of employment due to redundancy with its associated costs. Consent is not required, but careful consideration needs to be given to whether all the legal elements for stand down can be satisfied, because a wrongful stand down will expose an employer to legal liability.
6. Redundancy plans – at such time as it becomes apparent that redundancies are required, there are a number of requirements to ensure a genuine redundancy and avoid a successful unfair dismissal claim. These requirements include a fair consultation process where required by a modern award or enterprise agreement (which may involve consultation with unions), and the provision of redundancy entitlements. Consent is not required but legal requirements must be met and redundancy must be consistent with the terms of an employee’s contract.
For employers who cannot pay an amount of redundancy pay, there is the possibility to apply to the Fair Work Commission for an order to vary the amount of redundancy pay that is payable. Don’t take short cuts!
Notwithstanding any urgent need for change, we caution against taking short cuts, to avoid exposure to legal, financial and reputational risk. Apart from the risk of unfair dismissal claims, an employee who has suffered loss or damage because of a contravention of the Fair Work Act may seek court orders for remedies including reinstatement, compensation and penalties.