While JobKeeper has buffered the effects of Victoria’s COVID-19 restrictions for many businesses, it may take some time for things to improve. If you own or manage a business, decisions about whether to reduce overheads including staff numbers may rest with you.
With the first phase of JobKeeper having ended in September 2020, your decision to hire new staff, keep those you have, or let some go, may depend on where your business currently sits on the ‘JobKeeper spectrum’.
We see businesses generally fitting into one of the following five stages of the JobKeeper spectrum:
- Businesses who have never qualified for JobKeeper but have experienced a downturn of up to 30% in revenue;
- Businesses who didn’t qualify for JobKeeper and have not experienced any downturn, and may in fact be in a growth phase;
- Businesses who are continuing to rely on JobKeeper and are likely to need this support until the scheme ends in March 2021;
- Businesses who initially qualified for JobKeeper but who are no longer eligible and whose revenue is now back to at least 90% of their pre-COVID-19 revenue; or
- Businesses who initially qualified for JobKeeper and are no longer eligible but are still experiencing a downturn in revenue by at least 10%.
If your business falls into the last category, your business may still eligible to access some of the flexibility provisions under the JobKeeper scheme as a ‘legacy’ employer. This includes being able to continue to give employees a JobKeeper enabling direction about their hour of work, duties, location of work and work days and times.
If your business has experienced an ongoing significant drop in revenue, reducing overheads by reducing staff numbers may be something you need to consider. This may still be necessary even if your business is still receiving JobKeeper and may become even more important once the scheme ends in March 2021.
If your business has now recovered or is in an industry that has actually been in demand during the COVID-19 restrictions (think bikes and garden supplies!), you may actually be in a growth phase and looking to hire more staff. If so, you may consider the JobMaker or Restart programs to help younger and older workers who have been displaced by the pandemic.
If you would like to have a no obligation chat about your business, please give us a call. If you are thinking about reducing staff numbers, we can help you with the redundancy process to help minimise the risk of an unfair dismissal claim being made against your business. It is also worth keeping in mind that small business employers with less than 15 employees do not generally need to pay redundancy pay, although notice and accrued leave entitlements will still need to be paid.
If you need any other HR or employment law advice specific to your business, we welcome the opportunity to get to know you and work with your business. We can become your trusted advisors when it comes to managing your staff.
During COVID-19 we are offering local businesses a free 15 minute consultation.
Call our friendly team of lawyers on 03 5434 6666 in Bendigo or 03 5472 1588 in Castlemaine or send us an email at email@example.com. You can also visit our website for free articles on employment law.