Thinking | 31 March 2020

COVID-19 update for employers

By Fay Calderone and Stevie Bladen

Changes to the Long Service Leave Act

In this update, our Employment team looks at some of the changes made to legislation and awards because of COVID-19 that employers need to know about.

Many New South Wales employers have been asking how much notice is required to direct employees to take long service leave.  While under the Long Service Leave Act 1955 (NSW) the requirement was a month’s notice, a recent change may assist businesses to ease the burden of COVID-19.

On 25 March 2020, the Treasury Legislation Amendment (COVID-19) Bill 2020 (NSW) was assented to and commenced.

What does this mean for employers?

Employers can now give less than one month’s notice to take long service leave if the worker agrees to that lesser period of notice.  In addition, by agreement with the worker, an employer may also grant a period of long service leave that is less than one month.

Employers should also consider their existing entitlement within the Long Service Leave Act 1955 (NSW) to agree with an employee on a period of long service leave of more than one month.  This may also be taken wholly or partly in advance before the worker has become entitled to any long service leave or to the amount agreed to be given and taken.

When will these changes operate?

These new flexible arrangements will be available until at least 25 September 2020, but potentially up to 25 March 2021.

Why does this assist employers?

The benefit of these new measures is that they enable employers to respond to changing conditions by allowing long service leave to be taken with little notice, and also to allow long service leave to be taken in a manner to supplement other varied working arrangements (for example, in periods of one or two days).

Changes to the Hospitality Award 2010

The hospitality industry has been hit hard by COVID-19.  Government initiatives to curb the virus have resulted in the implementation of tight restrictions and, in some cases, forced closures of businesses.

From 23 March 2020, opening restrictions were placed on pubs, registered and licensed clubs, casinos, entertainment venues, night clubs and hotels.  Restaurants and cafes were restricted to take away and/or home delivery.

Businesses have fewer customers and reduced employee needs as a result.  Employers across the industry are grappling with the downturn and its impact upon their employees.

On 25 March 2020, the Fair Work Commission delivered a decision regarding the variation of the Hospitality Industry (General) Award 2010 (Hospitality Award) in response to the COVID-19 epidemic. In this article, we explain how the flexibility of the new provisions are intended to help hospitality industry businesses manage their staff.

Classification flexibility

The new provisions allow employers to direct employees to perform reasonable duties outside their usual classification.  These duties must be safe, must be within an employee’s skill and competency and the employee must be licensed and qualified to perform them. Where an employee performs higher duties they will need to be paid accordingly.

Flexibility in hours of work

The changes to the Hospitality Award also allow employers to direct full-time and part-time employees to work less hours and be paid on a pro-rata basis accordingly.  However, the reduction in hours must not be less than 60% of the employee’s usual hours.

Employers should note that leave will continue to accrue and be taken based on an employee’s usual hours.  Before taking these measures, employers need also consult with the affected employees about the changes to rosters or hours of work and provide as much notice as practicable.

Annual leave flexibility

Under the changes, employers may now also direct employees to take annual leave on the giving of 24 hours’ notice.  Again if an employer is taking this measure they must consult with the impacted employees and their representatives and provide as much notice as practicable.

The changes do not affect the ability of the employer and employee to agree to the employee taking annual leave with shorter notice than 24 hours.

In addition to notice periods, employers and employees may now also agree that the employee takes twice as much annual leave at half rate of pay for all or part of the leave.

When does this commence?

The Fair Work Commission’s decision came into operation on 24 March 2020. However, it does not take effect in relation to a particular employee until the start of the employee’s first full pay period that starts on or after 24 March 2020.  These arrangements will be in place until 30 June 2020 and can be extended upon application.

The way forward

These changes provide employers with greater flexibility, so that they will be able to retain as many employees as possible while easing the financial burden of COVID-19.  This will enhance the ability of businesses to resume smooth operation when the epidemic eases.

The decision of the Fair Work Commission can be found here: https://www.fwc.gov.au/documents/decisionssigned/html/2020fwcfb1574.htm

Employers may also be interested in the helpful summary within the decision about other packages available to assist them through this time.

Changes to the Clerks - Private Sector Award 2010

On Saturday, 28 March 2020 the Fair Work Commission amended the Clerks - Private Sector Award 2010 (Clerks Award) following a joint application by the Australian Chamber of Commerce and Industry and the Australian Industry Group, which was supported by Australian Services Union, the Australian Council of Trade Unions and the Commonwealth Minister for Industrial Relations.

The amendments to the Clerks Award are set out in ‘Schedule I—Award Flexibility During the COVID-19 Pandemic’, which operates from 28 March 2020 until 30 June 2020 (unless extended on application).

The impact of these changes are significant, with approximately 10 per cent of Australia’s workforce, or 1.3 million people, being covered by the Clerks Award.

Flexibility for employees to work across classifications

An employer can direct an employee to perform any duties within their skill and competency, regardless of classification.  These duties must be safe, the employee needs to be licensed and qualified to perform them, and their pay will not be reduced as a result of performing these duties.

Changes to ‘ordinary working hours’

The changes allow administrative staff working from home to request irregular hours in order to manage the schooling of their children whilst maintaining their jobs.

Where an employee requests and the employer agrees, ordinary hours would be redefined as 6 am to 11 pm on weekdays and 7 am to 12:30 pm on Saturday.  Importantly for employers, no penalties for overtime outside of regular business hours will apply (although weekend penalty rates still apply).

Changes to minimum hours

Where part-time and casual employees are working from home, they may be rostered for a minimum of two hours on any one shift.

In addition, an employer and the full-time and part-time employees in a workplace or section may agree to temporarily reduce ordinary hours of work, however this must not be less than 75 per cent of their normal hours.  To enable this, the approval of 75 per cent of the full-time and part-time employees in the relevant workplace or section is required.

This employee approval must be obtained by way of a vote.  The voting process requires, among other things, notification to be provided to the relevant union/s and to the Fair Work Commission and that employees are provided with the ASU COVID-19 Information Sheet prior to the vote.  Employees also have the opportunity to obtain advice from the ASU.

The vote cannot take place until at least 24 hours after the relevant requirements have been met.

While an agreement to reduce hours in this way may be beneficial for employers, it is likely not to be a quick process.

Given this, an employer may instead seek to agree individually with each employee to move temporarily from full-time to part-time.  This should be done in writing (including electronically) with a suitable reduction in the minimum weekly wage to reflect the reduced hours.

Implications of changes to minimum hours

If the part-time and full-time employee’s minimum hours have been reduced by agreement, leave accruals will continue to be based on the employee’s weekly ordinary hours of work.

In addition, the employer must not unreasonably refuse an employee’s request to engage in reasonable secondary employment and must consider all reasonable requests for training, professional development and/or study leave.

Directions to take leave

Employers may direct employees to take any annual leave they have accrued by giving at least one week’s notice, subject to considering the employee’s personal circumstances.  A shorter period of notice may also be agreed.

Importantly, the direction to take annual leave cannot result in an employee having less than two weeks of accrued annual leave remaining after the employee takes leave.

The requirement to take annual leave can also apply where there is a close-down of the employer’s operations.  Again the employer must give at least one week’s notice and a shorter period of notice may be agreed by employer and employee.  During this time, the employee is allowed paid annual leave for the period for which they have accrued sufficient leave and unpaid leave for the remainder of the close-down.

Employers and employees may also agree for an employee to take double leave at half pay.  This can apply to any agreed or directed period away from work, including a close-down.

When will these changes operate?

As noted above, the changes will operate until 30 June 2020, unless extended further by the Fair Work Commission.

Why do the proposed changes assist employers?

The radically shifting economic environment means that employers need to be agile in the way they manage staff and operate their businesses.  Increased flexibility in awards helps employers adapt to this environment and keep their operations moving more efficiently.

The decision of the Fair Work Commission can be found here:
https://www.fwc.gov.au/documents/documents/awardmod/variations/2020/am202010-summary-dec-280320.pdf

Further information

For more information on employer options during this challenging time, please see our previous articles on cost-saving measures and stand downs:

https://hallandwilcox.com.au/thinking/covid-19-cost-saving-options-for-employers/

https://hallandwilcox.com.au/thinking/covid-19-update-for-employers-can-employees-of-organisations-providing-non-essential-services-be-stood-down/

The article was written with the assistance of Stevie Bladen, Graduate Lawyer. 

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