Introduction

The floods that have and are still occurring down the Australian eastern seaboard and Tasmania have affected individuals, families, business and communities. The costs to business and communities have been estimated to run into billions of dollars.

At this time, some businesses may need to act to shield themselves from the financial effects of flooding and to provide employees with options directed at maintaining job security.

The available responses depend on the short and long term requirements of the particular business. For example, a business may find that they have no work in the short term for their employees because their workplace has been flooded, or if the business has not been flooded, it may have been indirectly affected such that business activity has slowed or stopped altogether.

Employers need to assess their current situation. Outlined below are a number of options available to employers and employees.

Leave entitlements under the Fair Work Act 2009 (Cth)

Paid Annual Leave

An employee and employer may agree to the employee taking a period of paid annual leave. If the leave is requested by the employee, an employer must not unreasonably refuse to agree to a request. Employers should consider agreements, awards or employment contracts that may set out additional requirements for leave requests.  

An employer may require an employee to take annual leave as part of a close down of the employer’s business. Rules about notice to be given to employees in these circumstances vary depending on what award or enterprise agreement, if any, covers the employee. No minimum notice is required for award free employees.  

Paid Personal Leave

An employee who is required to care for children and/or sick or elderly family members due to illness or unexpected emergency is entitled to paid carers leave. However, the employee must notify their employer that they wish to take this leave. In certain circumstances an employer can ask the employee to provide evidence in support of this leave.

An employee who has exhausted their personal paid leave is also eligible for up to two days unpaid personal leave on each permitted occasion.

Where an employee is covered by an employment contract, award or enterprise agreement, an employer should also consider any further terms that the employee may be entitled to under that document.

Unpaid Community Service Leave

Employees who are members of a recognised voluntary emergency management body may also take unpaid community service leave. An employee must comply with notice and evidentiary requirements. Notice may be given after the absence has started, providing notice is given as soon as practicable.

Unpaid Leave of Absence

An employee and an employer may agree that the employee take a period of unpaid leave where all other leave entitlements have been exhausted.

Stand down

If an employee’s employment contract or enterprise agreement does not deal with stand down, the employee is subject to the Fair Work Act stand down provisions, which provide a default right for an employer to stand down employees for a certain period.

Situations where a person may be stood down include a “stoppage of work for any cause for which the employer cannot reasonably be held responsible.” This would include the current flood situations across the Australian eastern seaboard. The Fair Work Ombudsman has released guidelines on its website to assist employers and employees facing the current flood situation.

An employer can only exercise this right to stand down an employee if they cannot be usefully employed. If an employer could obtain some benefit or value from work performed by an employee then the employer will not be able to stand down that employee.

Employers can choose which employees are stood down based on whether some benefit would result from the employee attending. Accordingly, it may be that where an employer requires particular employees to assist in the clean up of a business then they would not be stood down.

Where an employee is covered by an employment contract or enterprise agreement an employer should ensure that they comply with any obligations contained in the employment contract or enterprise agreement.

Part time work

Employers and employees may discuss reducing an employee’s hours for the interim to part time work where a business is still running but does not have full time work available for its staff.

This would require the consent of the employee. If the employee did not consent then depending on the circumstances, the employer may have a valid operational requirement to support dismissal.

Pay cuts

Employers and employees may discuss reducing an employee’s wages for the interim where a business is still running but does not have funds or full time work available for its staff.

This would require the consent of the employee. If the employee did not consent then depending on the circumstances, the employer may have a valid operational requirement to support dismissal.

Redundancies

Unfortunately it may be the case that a business decides that the devastation of the flood is too great or that in the foreseeable future there is a reduction in the businesses production. In those circumstances an employer may have to take the very difficult decision to make employees redundant.

Consultation obligations and monetary entitlements on redundancy derive from the Fair Work Act, awards, enterprise agreements, employment contracts and employer HR policies.

Many modern awards including the General Retail Industry Award 2010 defer to the redundancy pay and notice of termination provisions in the National Employment Standards contained in the Fair Work Act. Expired award entitlements may continue to apply depending on the period of service of the employee.

It should be noted that small business employers may not be required to provide redundancy pay on termination of an employee’s employment. A small business employer is an employer who at a particular time employs fewer than 15 employees.

Other employment related issues

It may be that other issues arise as a result of flooding such as:

  • Occupational Health, Safety and Security (OHSS) risks
  • Ability to direct employees to carry out alternative work
  • Working from home or other locations
  • Employee counselling/assistance