We appreciate the economic circumstances your business may be facing due to this unprecedented situation associated with COVID-19. We also appreciate that cutting costs, particularly when it comes to staff, is never easy. Therefore, so you are best prepared, we thought we would flag some options you can consider.

Most employers are looking to implement interim contingency plans and cost cutting measures to weather the COVID-19 storm. However, the only clear unilateral step an employer can take to reduce costs in relation to staff is redundancies. Redundancies though, are a more permanent or long-term costs saving measure and don't necessarily assist businesses with managing the COVID-19 crisis.

That said, employers can consider the following options to deal with the economic challenges caused by COVID-19:

  1. Direction to take annual leave

  2. While there is scope to direct employees to take annual leave in relation to a close down associated with COVID-19, measures need to be taken in order for it to be considered reasonable including having regard to applicable modern award obligations.

  1. Reduction of hours, pay cuts, or leave without pay

  2. Seeking to reduce hours of work, effect pay cuts, or leave without pay arrangements can be effective interim costs cutting measures but they need to be explored with staff through effective communication and consultation.

  1. Stand down

  2. There's a lot of talk about standing employees down without pay. However, whether an employer can lawfully stand its employees down will depend on its particularly circumstances including the nature of its business and how the COVID-19 pandemic is impacting work.

  1. Redundancies

  2. Redundancies are available as a response to a downturn of business associated with COVID-19. As with any redundancy, steps need to be taken to ensure its "genuine" to avoid potential unfair dismissal risk, including having regard to modern award consultation requirements.

Next steps

If you would like to explore any of these options with us further or if there is anything else we can do to assist you or your business through the COVID-19 crisis.

We do not disclaim anything about this article. We're quite proud of it really.