Business Slowing Due to COVID-19 | Forced Annual Leave

My wife works in medical and the number of patients coming in has subsided due to COVID-19… She was asked if she could take annual leave one day this week due to a quiet day and she said yes. In preparation for the next time they ask, I have been doing some research and it's a little bit unclear weather companies can force employees to take annual leave (is a pandemic a natural disaster?). It's been a one off so far but I figure we need to get ahead of the game to be in a better position. If she refuses to take consistent annual leave, an option available to her employer is to make her redundant… but that could be more costly for them depending how long this BS stretches out…

So…
Grin and bare it? Take the annual leave until there is none left?
Be upfront and say I can take 1 annual per fortnight MAX
So no, if you don't want me here you're still paying me (risk redundancy)

-sources-
https://www.fairwork.gov.au/about-us/news-and-media-releases…
Where an employer directs a full-time or part-time employee not to work due to workplace health and safety risks but the employee is ready, willing and able to work, the employee is generally entitled to be paid while the direction applies. Employers should consider whether their obligations are impacted by any applicable enterprise agreement, award, employees’ employment contracts or workplace policies.

Under the Fair Work Act, an employee can only be stood down without pay if they cannot be usefully employed because of equipment break down, industrial action or a stoppage of work for which the employer cannot be held responsible. The most common scenarios are severe and inclement weather or natural disasters.

Standing down employees without pay is not generally available due to a deterioration of business conditions or because an employee has the coronavirus. Enterprise agreements and employment contracts can have different or extra rules about when an employer can stand down an employee without pay. Employers are not required to make payments to employees for the period of a stand down, but may choose to pay their employees.

What if I need to let employees go or reduce their working hours?
Some employers may need to make employees’ positions redundant in response to a business downturn. If an employee’s job is made redundant their employer may have to give them redundancy pay. The Fair Work Act has requirements that employers have to meet before they can terminate an employee’s employment, such as providing notice.

If an employer seeks to vary employees’ work rosters, they should review any applicable enterprise agreement, award, employment contracts or workplace policies. Particularly for full-time and part-time employees, an employer is usually required to seek employees’ agreement to change their rosters.

https://www.fairwork.gov.au/leave/annual-leave/directing-an-…
An employer can only direct an employee to take annual leave in some situations. For example, when:

the business is closed during the Christmas and New Year period
an employee has accumulated excess annual leave.

https://www.training.com.au/ed/scott-morrison-supports-force…
According to employment lawyer Giri Sivaraman in his interview with the Daily Mail, leave entitlement is subject to whether the worker is actually sick or requires testing for the virus.
If a worker has been told to remain at home and isolate themselves as a result of fears of exposure, they must be paid as usual, Sivaraman says.

This even extends to precautionary measures – being told to isolate as a result of the outbreak for a period of time to be ‘on the safer side’, this technically counts as a suspension from work and means that the worker should continue to get paid normally, without the need for any leave.

WA - https://www.commerce.wa.gov.au/labour-relations/employment-i…
Standing down staff where a business has been impacted
Where a business has been impacted by travel or import / export restrictions resulting from the novel coronavirus, and there is no work or reduced work available to employees, employers must continue to pay full time and part time employees who are willing and able to work unless the employees are covered by a WA award which contains specific stand down or break down provisions which would cover this scenario.

Full time and part time award free employees would need to continue to be paid by the employer as there is no stand down provisions in the Minimum Conditions of Employment Act.

An employer and employee can agree that the employee takes a period of accrued annual leave or long service leave during a period when business is impacted. Information on annual leave and long service leave is available on the Wageline website.

Comments

  • +14

    Its tough time, everyone going to cop it one way or another.

    Grin and bare it? Take the annual leave until there is none left?

    Then you should go for paid leave. At least you get to work on some days. There are some casuals who wouldn't be able to work at all. So consider yourself lucky.

  • +21

    Alternatively, the business goes under and no work at all.

      • If anything, that hints that there's less cash available…

      • +12

        Tell that to the airlines

      • +1

        Unfortunately that might mean the new owners might be eager to increase profit / reduce expense to recoup the cost :(

  • +6

    I would suggest working together with ones employer as much as possible. If that means taking annual leave to reduce the liability on their books a bit, so be it. I wouldn't kick up a stink about that.

    Most employees during this pandemic are going to be affected in some way, whether it be working remotely, lost income, lost job or changed conditions etc etc. IMO being asked to take some paid leave days is fairly minor.

    Unpaid leave is of course a whole different matter. But sounds like your wife's employer is not at that stage yet, and is trying to manage their books as best they can for the moment.

    • Doesn't paid leave cost more than working? 17% leave loading?

  • +7

    Personally I think you should be accommodating to the employer as much as possible. If she loses the position it will likely be hard to find another anytime soon.

    If you make it too hard for them your wife will be the first to go if this goes on for an extended time, unless she is a must-have employee.

    Just my thoughts…

  • +36

    From an employer's (myself) perspective:

    The threat to the business (also medical) is real. Not only have our cost noticeably increased, our bookings have become fewer, cancellations are markedly higher and so are no shows.

    Our revenue is down in the double digit figure and our cost of operation is up close to the double digit figure.

    In the best case scenario, employees and myself will be able to weather the storm which I have informed my staff would likely carry on for 12 months. We will be reducing our operational hours and hoping to cover the cost of remaining open. There will be no waiting room. We book our appointments with more spacing between and patients will wait in the car until called.

    This is VERY expensive to implement in addition to the increased cost previously mentioned.

    We are doing this to ensure essential services can continue to operate and so I can continue paying staff so they have minimal issues with their financial commitments.

    If staff have issue with reduction in the work hours and I am forced to keep employing at the same rate so they can twiddle their thumbs at work, I will do so but I can guarantee, like me, the employers of these individuals will have to end this one sided relationship.

    I'm forgoing any possibility of turning a profit this year. I have financial liabilities I need to service, staff I need to ensure the well-being of and patients I have taken an oath to serve. It is a balancing act and at the end of the day, I expect to still look like the bad guy.

    My hopes is I don't have to downsize, shut down or let anyone down.

    • In the last recession 2008 in the UK, companies suggested employees take voluntary 10-15% pay cuts to help balance books to stay alive and ensure people are not laid off/made redundant etc. I can see this being a very real approach here and maybe something to consider.

      Does a team of 10 people want to lose 2 of them permanently or are they all happy to take a bit of a pay hit temporarily to ensure all continue surviving etc. Most people would make it work.

      • +1

        I don't want to go down the route of paycuts. I don't think I want to have that kind of debt hanging over me. I rather downsize.

        Having said that, I would be operating on a skeleton crew if I have to.

        • It's not a debt though as the cuts aren't repaid later on. It's a real pay cut for a short period of time.

          I would rather have that than know colleagues are being let loose with limited job/income prospects.

          • +4

            @Hybroid: I know it is not a financial debt but it is an honor debt.

            My upbringing has strongly discouraged I accumulate on honor debts. I cannot over emphasise how much this is instilled in me.

            • +2

              @[Deactivated]: Respect.

            • @[Deactivated]: So you would hand out redundancies rather than keeping people employed, that really need to keep their job at this time?
              …Just for your own honor?
              That’s probably worse then redundancy.

              Staff may have financial liabilities they need to service, family and kids they need to ensure the well-being of, how is it any different to you?

              • @Hirolol:

                Staff may have financial liabilities they need to service, family and kids they need to ensure the well-being of, how is it any different to you?

                Because history has time and time again shown that the resulting end to me is financial, reputation and potential legal losses to myself.

                It's a no win scenario.

                I am not sure about you, I have never met anyone who is thankful to their employer for the paycuts that allowed them to keep their job. Never.

                Honor debts are undefined debts. When there is no definition, the debtor is open to unpredictable liabilities.

                As always, I am against ill defined concepts and against feeling indebted.

                • @[Deactivated]: Under normal circumstances nobody would want to take a pay cut.
                  But we are talking about current circumstances, surely they would be grateful as opposite to losing their house.

                  Surely there are ways to protect yourself with some form of contract as long as you are paying the required amount.

                  Well personally I would rather have a job at temporary lower pay than get fired.

                  Someone with a mortgage and family to feed should be grateful for that opportunity rather than be let go completely.
                  Who’s going to pay the mortgage of that person?
                  Not your problem, but at least your honor is kept intact.

                  • +1

                    @Hirolol: When a fellow employees suggests a paycuts to save jobs, their peers think "oh, good. Save jobs".

                    When an employer suggests a paycuts to save jobs, the same people think, "greedy bastard. Paycuts?"

                    We've seen this in recent times. Think car manufacturing and coal power plants.

      • +7

        You're spot on, there will be businesses out there - small and large - who will ask people to take time off without pay (if they dont have paid leave yet) to cut down business cost; taking time off even for two weeks is still almost a 4% pay cut over 12 months. That might be enough to 'save' the business.

        Taking this further, from a positive point of view, if you are required to take time off - do so and make the most of the 'time off' because the bulk of us have said or complained that they're 'glad its friday' or 'wish the weekends were longer'

        This is the perfect time to have 'quality me time' / enjoy yourself / enjoy your partner / enjoy the family and kids.

        Sure money can get tighter for some, but life is life. Every second you waste/spend can never be brought back. Money you can.

    • +2

      Thoughtful response. Was a delight to read.

      I am able to work entirely from home and be almost as effective as in person. My clients are giving little pushback, but I have enough work to lose a few. Close to zero operating costs.

      I marvel at the fortitude of people like yourself who have an entirely opposite situation of having to provide services in person, having employees, having high operating costs.

      Best of luck with everything.

  • +3

    want to complain? well directed it to Mr Wuhan

    • Or The Pooh

  • +10

    Forced annual leave = better than forced termination or redundancy.

  • +1

    You had the answer in your post, you just didn't like it:

    Where an employer directs a full-time or part-time employee not to work due to workplace health and safety risks but the employee is ready, willing and able to work, the employee is generally entitled to be paid while the direction applies. Employers should consider whether their obligations are impacted by any applicable enterprise agreement, award, employees’ employment contracts or workplace policies.

    This applies only when it's something the employer is responsible for.

    Under the Fair Work Act, an employee can only be stood down without pay if they cannot be usefully employed because of equipment break down, industrial action or a stoppage of work for which the employer cannot be held responsible. The most common scenarios are severe and inclement weather or natural disasters.

    Unless you're a conspiracy but, I'd say the employer can't be held responsible for the pandemic.

  • May I ask what medical business are these?

  • +2

    This is a crisis situation.
    You cant get wrapped up in employment law and whats right and whats not.
    If need be, the government will suspend fair work laws to protect businesses.
    Every single employment sector is going to be affected by this and potentially hundreds of thousands of people are going to lose their jobs.
    We need to support our employers. If we can, we need to use up our leave entitlements or take leave without pay.

    • This is absolutely right, if a business collapses due to debt and unconditional payments it’ll be a shame. Because we all know pandemics don’t last forever. Banks will be forced to cut business slack on interest payments and employees and hopefully landlords will compromise too, because if businesses start falling over it’ll cascade.

      But as always, don’t let you boss forget it when the times turn good;) and times will inevitably turn good one day.

  • https://legislation.nsw.gov.au/#/view/act/1944/31

    Clause 4A(2)

    But the law and what we do is not always black and white

  • +3

    Before taking a pay cut - If they need cash flow, then I'd happily buy 4-8 weeks of unpaid leave and have my 52 week salary spread over 48 or 44 weeks. This will free up cash for the business in the short term and give you a guaranteed pathway to return to your normal income level.

  • You need to determine if your wife is under an Award, EBA, contract or other.

    It is common for Awards and EBAs to allow the employer to direct when annual leave is taken. Christmas NYE is the classic example.

  • Long term, vote for political parties that want bigger safety nets. Prepare for more events in future. Ie The building could burn down because of climate change.

  • From reading the comments here is seems that many are understanding of the situation. Many of us have not lived through anything of the like. What the laws say (no they can't force annual leave in this current situation) goes out the window now with survival of all the only hope.

    • -2

      Overly dramatic.

      • +1

        You obviously don't know anyone who's lost their job in the last week with zero hope of finding a new one anytime soon (only so many can stack shelves at the supermarket).

        • I interpreted your “survival of all the only hope” as a reference to the virus.

  • I thought it was normal for employers to be able to force employees into taking annual leave during periods.

    I work for a big 4 bank and they force us to take 2 weeks of annual leave during Christmas period (as I work in non-critical operations) and it comes out of my yearly annual leave allowance…

  • +1

    Better than being forced by the health department to run fever clinics/help in ED when your usual work is no way related (other than being qualified as doctor/nurse)……………..

    • Exactly and that’s happening

  • tough times ahead for alot of industries

  • +1

    Consider yourself one of the lucky ones who has been given that option.

  • The jobs that will be lost are barnacle positions

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