As economic pressure continues to mount, Baker McKenzie partner Michael Michalandos muses, there is an increase in employers requesting that staff take unpaid leave or accept reductions in hours and pay, with some also cutting ties with casual staff, reviewing contractor arrangements, and moving to redundancies.

What employers must recognise, Mr Michalandos told Lawyers Weekly, is that even though we are in a state of emergency, they still need to ensure that their responses to the pandemic are compliant with employment laws.

“In the current environment where it will be difficult for employees to find other work, employers should expect that employees are more likely [to] test the termination of their employment before the Fair Work Commission or our courts,” he said. 

“For example, employers do not have a right to simply cut salaries or hours of their permanent staff. Employees need to consent to these arrangements. We are also receiving increasing requests about stand-downs in the current environment. An employer does have the right under the Fair Work Act to stand down employees in certain circumstances.

“However, this right is very limited and in relation to the pandemic, can only be exercised where their employer is able to establish that there is a stoppage of work due to circumstances outside of the employer’s control and the impacted employees cannot usefully engage their employee elsewhere. The right may operate if government restrictions mean that an employer must shut down part or all of its business.”

They are unlikely to operate, Mr Michalandos continued, simply because an employer is experiencing financial difficulties.

“It is important that employers seek legal advice before implementing a stand-down, because getting it wrong can have serious consequences. It is also important that they consider the operation of the new JobKeeper packages just announced by the federal government, so that they can structure their response in a manner which will enable employees to apply for these benefits where possible,” he said.

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Employers should also remember, Mr Michalandos added, that they must consult with their award covered employees on any major changes “which are likely to have a significant impact on their workforce as soon as a definite decision is made to implement changes”.

“Generally speaking, we find that it is those employers who maintain good communication lines with their work force [that] will be better placed when it comes to implementing workplace changes. Most employees understand that we are operating in a difficult environment and are more likely to be flexible if there is open dialogue on these matters,” he said.

“Dealing with employees respectfully, will also likely make it easier for employers to restock the pond when business improves (and it will).”