Hi, it’s Ashley Thomson with the COVID-19 business continuity update for Friday 27th March.
In today’s briefing:
1. Possible state-wide shutdown
2. Learning from New Zealand’s shutdown
3. Labour and Rent Costs in the event of a Shutdown
1. The implications of a state-wide shutdown
NSW and Vic have flagged that they may move forward with stage 3 and stage 4 shut downs ahead of the other states. What does this mean for your business?
One of the critical questions our business coaches are fielding is what defines an essential business from a non-essential business. So far, we have had very little visibility of this definition in advance of the previous shutdown notifications.
I think it would be useful to give business owners greater awareness on what might happen so we have been researching the lockdown situation in New Zealand. If we consider New Zealand to be a comparable country to Australia, then this provides a basis for us all to plan for what might happen in here.
2. Definition of an essential business in New Zealand
New Zealand has this definition:
Essential businesses, and those that support them, will continue to provide the necessities of life for everyone in New Zealand during Alert Level 4.
This means food, medicine, healthcare, energy, fuel, waste-removal, internet and financial support will continue to be available.
Read the full details here: https://covid19.govt.nz/government-actions/covid-19-alert-level/essential-businesses/
In particular please note the heading, “Entities providing essential services (including their supply chains)” and the clarifying text, “including any critical suppliers in their supply chains, e.g. a firm repairing IT and data infrastructure for an essential service is okay to remain in operation”.
As an example, Bunnings stores in New Zealand have closed but they have a skeleton staff in their trade sections to sell materials to those essential services that require them.
The New Zealand government has also published this information, “Can I get a tradesperson to come and do essential maintenance at my house? Yes, if this is immediately essential to maintain the necessities of life or critical to safety. This includes electricians, plumbers and builders.”
Business that can work from home can remain open in New Zealand
The New Zealand government has also published this information for their business community, “Businesses operating non-essential services must shut down their premises. These businesses can continue to operate with staff working from their own homes. If this is not possible, these businesses must close their operations.” This explains that a business that has the ability to work remotely can remain operational through the lockdown, but can’t operate from their business premises.
What does this mean for Tenfold clients and Australian businesses?
If Australia adopted similar instructions, many of our businesses would be directed to shut down. Some of our businesses may be able to continue to operate in a reduced capacity as they would be deemed to be part of the supply chain for essential services.
Here are a couple of examples based upon the New Zealand information:
• an electrician providing machine maintenance services to a pharmaceutical manufacturer,
• a food ingredients supplier providing raw materials to the food manufacturing industry,
• a plumber servicing the property management sector who is required to fix safety related issues.
3. Labour and Rent Costs in the event of a Shutdown
There is a lot of uncertainty around how the two major costs for most Australian small businesses will be handled in the event of a shutdown. The Australian government has indicated they are working on a plan for dealing with commercial leases. Due to the complex nature of this it might take a bit of time before we get clarification.
Fair Work Australia continue to update their website regularly on the implications of COVID-19 on workplaces, see; https://coronavirus.fairwork.gov.au/. Please be very cautious about directing your team to stand down before a directive from the Federal or State government. It could have serious financial implications for your business and the Fair Work Ombudsman has published this on their website; “If an employer unlawfully stands down employees without pay, the employees will likely be able to recover unpaid wages”, see: https://coronavirus.fairwork.gov.au/#stand-down. Please speak to your Tenfold business coach before making any decisions and if required we can direct you to a professional with industrial relations experience.
The Fair Work Commission are temporarily adjusting awards to give employers greater award flexibility, they have adjusted the hospitality award in recent days. I recommend that you maintain contact with your industry association regarding possible changes in your industry and to your award and speak to a business mentor or advisor about how you can stay informed as things change.
Reducing an employee’s hours of work remains a good option for small businesses to consider. However, be aware:
• The need to consult with employees about the impact of the change on them
• Award-specific rules and conditions
• A reduction in an employee’s hours of work usually requires an employee’s agreement.
See: “Can an employer change an employee’s regular roster or hours of work?” at https://coronavirus.fairwork.gov.au/#roster-changes
We care about Australian businesses so reach out to Tenfold Business Coaching if you have questions about how we can help your business during this time.