Strategies and advice for businesses to stay in control through COVID-19 and get ahead of the pack

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COVID-19 Business Continuity – 14th April

I’m here with the COVID-19 business continuity update for today, Tuesday 14th April.

In today’s briefing:
1. JobKeeper eligibility: is your business in JobKeeper or out?
2. Changes to Fair Work for JobKeeper businesses

1. JobKeeper eligibility: is your business in JobKeeper or out?

The JobKeeper program offers a genuine lifeline for many businesses. As businesses over the next month we need to be more diligent than ever in forecasting our revenue. Businesses will be split into two categories:

A. Those that cruise through this period and maintain or grow with no decline compared to their 2019 comparison months, or

B. Others and the majority, that will experience a small to large decline in revenue over the next six months.

The plans and tactics you implement will be vastly different depending on the path you take.

The key point I want to make today is that if you do experience a decline in revenue you need to be acutely aware of your 2019 comparison period and the revenue figure at which your revenue will have declined by 30%. In the past we as business coaches have encouraged you to strive for higher revenue targets. Things are different now. If your revenue is declining, you should be strategic with taking on additional work to fill the revenue hole. Taking work at low margins with inherent risks might actually turn out to be a lot less profitable than passing on it.

Whether you are in or out of the JobKeeper program will define your business model. This is why your business coach is working on your financial model and revenue forecast with you – it will enable you to understand if you’re already eligible for JobKeeper or if not, what your options are.

If you are eligible for the JobKeeper program, your model will include different scenarios showing your revenue, costs and profit, it will also include rent reductions and government payments.

If you are eligible to participate in JobKeeper you get access to an ever-increasing range of financial and strategic benefits:
– Wage subsidy, being the $1,500 per fortnight per eligible employee (announced on 30th March)
– Special arrangements and rent relief for your commercial tenancy (announced on 7th April)
– Flexibility to scale down your workforce to suit your business’ needs: hours, duties and location, days and times and annual leave (announced on 9th April)

These benefits are ONLY available to JobKeeper businesses; if you’re not eligible and registered for the program, you don’t get access to any of these.

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2. Changes to Fair Work for JobKeeper businesses

On 9th April, the Fair Work Act was updated to provide greater flexibility for business owners under the JobKeeper scheme Enabling Stand Down Directions. The changes only apply to businesses that are part of the JobKeeper program. There are four key aspects that give business owners greater powers to scale down their workforce in order to manage their business during COVID-19:

1. Reduce hours or days of work
2. Work different days or times
3. Change of duties or work location
4. Direction to take annual leave

1. Reduce hours or days of work (temporary and partial stand downs)
The most important aspect is that it provides you with power to mandate a reduction to your employees’ hours. Previously, business owners were required under most awards to reach a mutual agreement with each individual employee on reduced days or hours. That is no longer required under “JobKeeper enabling stand down directions”. Now you can discuss with your employees the need to reduce hours or days to the level the business requires (including reducing to zero hours or days) and then implement the change after a 3-day notice period. Employees can waive the right to the notice period if they agree to it.

All changes must be in writing but you do not require the employee to acknowledge or endorse the written notification. Speak to your business mentor about the legislated process you must follow to be compliant.

The ability to use this process to reduce hours ONLY applies if you are in the JobKeeper program. If you are not in JobKeeper, then you will still need to comply with all aspects of FWA for changing hours.

My advice is to use this flexibility to your business’ advantage:

For your senior executives or people in office roles: consider adjusting their start and finish times but keep them on for the 5 days. For example, you may still need someone to manage scheduling or logistics every day so don’t give that person every Friday off. Instead, discuss the option of starting later by 2 hours every day. Consider staggering start and end times to provide full coverage over the day.

For your front-line or hands on staff: look at reducing the number of work days but don’t give everyone the same day away (e.g. Friday). Instead, spread non-work days across the week; this way your business will still have coverage to service clients every day of the week. Your business coach can give you guidance on about how to handle times when you have more work for specific roles (in excess of the reduced days).

2. Work different days or times
The new provisions in the Fair Work Act also enable you to change the days and times that your employees perform their usual duties and hours. (e.g.: change an employee’s usual work day from Friday to Tuesday). This is different from reducing hours – there’s specific wording for that.

3. Change of duties or work location
Another aspect of the FWA changes give you the ability to change employees’ roles and locations.

Role changes: You can direct people to perform roles and tasks that are not part of their normal duties as long as the tasks are reasonable and safe. My read is that this new flexibility with job roles is focused on employees whose role fits into classification levels covered in their award.

Change of location: You can now direct an employee to work at a different location as long as it is reasonable and safe to do so.

Again, you need to discuss changes with your employee and give them 3 days’ notice. All changes need to be in writing.

4. Direction to take annual leave
Under the FWA change, you can request your employees to take paid annual leave and you can also agree that it is taken at half their usual pay rate. The employee must keep their leave balance at least 2 weeks.

While the new provisions under the Fair Work Act provide employers with flexibility and options to support their business, this is not a free-for-all. There are still due processes that need to be adhered to.

To support you in making changes to your workforce, we have prepared a range of templates for each variation. Your business coach will provide you with the appropriate form so speak with Arjen, Mace, Lee or me.

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More and more we’re seeing greater support for small businesses to enable them to trade through these coming months. I encourage you to keep abreast of the changes and your eligibility, and work with your Tenfold business coaching mentor to find the business model that will see you through.

Stay safe,

Ash

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