There is no doubt that the COVID-19 virus has brought with it great uncertainty for most businesses.  Not only are organisations struggling with how best to keep their employees safe at this time, the various steps that state and federal governments are now taking to slow down the spread of the virus means that many businesses will do it tough for some time to come.  For some, the unfortunate reality is that survival may depend on standing down or letting go of some employees.

For those in the not-for-profit space where funding arrangements (and the needs of their clients) require certain service delivery levels to be met, the COVID-19 situation presents an additional challenge.  (See Nicole Shenfield’s article Contracts and COVID-19: does your force majeure clause cover it? in our latest Not-for-profit bulletin for further information about such clauses in this context.)

When it comes to considering staffing levels, the first response is often to temporarily stand employees down.  However, this is not an option when the reason for the stand down is simply a downturn in business or profitability, whatever the cause.  Stand-down provisions under the Fair Work Act 2009 are generally only available where an employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible[1] such as a government-imposed industry shut-down.

With the current state of play, most organisations in the not-for-profit sector remain providers of services which are not affected by government-imposed industry shut-downs.  Given that many not-for-profit enterprises provide what are likely to be deemed “essential services”, the stand-down provisions are not, and will not likely be, available.  If staffing reductions are required, redundancy may be an option which must inevitably be considered.

However, prior to considering redundancies, there are various options to which employers and employees may agree upon as an alternative to wholesale redundancies.  For example:

  1. explore and put in place working from home arrangements where possible and appropriate;
  2. employees may agree to use some or all of their accrued annual leave or long service leave, either at full or half pay (with the balance being taken as unpaid leave);
  3. employees may agree to job sharing arrangements on a temporary basis;
  4. employees may agree to take additional leave without pay; or
  5. voluntary redundancies in selected areas may be offered.

Also, employees with excessive leave accruals may be directed to take annual leave.  Whatever option is taken, it is important to consider the terms of the relevant award to ensure that doing so is permitted and that any requirements are met.

It is equally important to safeguard those employees who will remain in the workplace.  Employers should be guided by state and federal health department advices in that regard.  Lastly, employers should ensure that they communicate with all staff about potential outcomes, what’s required of them (in either working from home or the workplace) and when and how they can expect further updates from management.

[1] Including because of industrial action or a machinery or equipment breakdown for which the employer is not responsible.