CCBR Business Review

17 B U S I N E S S T I P S In the shadow of COVID-19 – Sharpening your team for an uncertain future CENTRAL COAST BUSINESSES con- tinue to travel in a very uncertain world. Businesses cannot afford to have underper- forming or problem employees at a time when margins are tight. We know that terminating employment of staff in 2020 is not simple, but is it still an option? The short answer is: ‘Yes”, and here are the alternatives: 1. Termination without process for some employees: If the employee is still in the first 6 months (12 months for businesses with < 15 employees), businesses can ter- minate them without providing a reason. In fact, for no reason at all. The employer needs to pay the notice under the Fair Work Act or the contract (whichever is the great- er), then you are good to go. For a small minority of employees whose roles are not covered by awards and earn more than $153,600 pa, this right for employers to terminate at will, applies throughout their employment. In either situation, you do not even need to meet with the employee. There is always a qualification and the ‘but’ in this situation is an avenue for legal remedy called ‘adverse action’ and discrimi- nation. Adverse action emerges where an employee asserts the reason they were terminated was because they complained about issues to do with their employment (i.e. having to work overtime or not being allocated enough overtime) or simply exer- cising a workplace right (using their person- al leave or making a workers compensation claim). If they establish that element and that they were then terminated the onus then falls on the employer to show that nei- ther the complaint nor the exercise of the workplace right factored in the decision to terminate the employee. That is not always an easy task. If this is not well handled, the dam- ages can be considerable - $600,000 in a recent case. 2. Misconduct/poor performance as a reason for terminating employment – Where poor performance or misconduct is the reason for the termination, there is a well known process involving (often) investigations, meetings, discussion and at least 2 letters of warning before the termination. In essence, there must be a valid reason and a fair process to avoid the ire of the Fair Work Commission. Of course, if the misconduct is serious enough (i.e. violence or theft) the letters of warning can be dispensed with. Many employers get caught out in a failure to follow a fair process (remembering that FWC tends to heavily favour employees when considering what is fair). 3. Redundancy - Businesses have found their needs for employees has fallen away, leaving redundancy as a reasonable option for termi- nating employees. Redundancy arises where a role is no longer needed by the business. By Warwick Ryan, Partner, Hicksons Lawyers As a result, the staff member’s employment is terminated. The trick to redundancy for most staff who are covered by awards is to show that you have “consulted”prior to making the final decision. Generally, this will involve meetings to discuss your plans prior to them being terminated. Termination by way of a redundancy has an additional cost attached to it of up to 16 weeks pay, depending upon the employee’s length of service (in addition to other enti- tlements). But not (apart from a few excep- tions around the construction industry), if the employer has less than 15 employees. 4. Employees with long term illness or injury - Finally, a basis for termination can arise if an employee is not able to return to their role because they have an injury or a condition that prevents them from doing so. There are threshold periods before you can take that step of 3 months and 6 months respectively, depending upon whether the injury/condition is acquired outside work or as a result of work. There are processes involved in establishing future incapacity and – the obligatory – consulta- tion, prior to termination It is important for any business to review employee numbers and performance on a regular basis. In these tricky times – even more so. Letting go of non-performing or disruptive employees can transform the culture of a workplace – as dedicated and enthusiastic employees can get on with their work without being undermined. Now, more than ever is the time to end up with the team you need to run your business at its optimum. You will need every advantage on your side in these trou- bled times. By Troy Marchant, Director, Adviceco Chartered Accountants DEBTOR MANAGEMENT IS an abso- lutely crucial element of cash flow free- dom for business. Although, collecting debts in the middle of a financial crisis can be a sensitive task. Many debtors may be in financial distress. Others (and let’s hope less frequently) may be using COVID-19 as an excuse. It is up to busi- Debtor Management during COVID-19 MIND YOUR BUSINESS ness owners to determine the financial position of your clients and customers, and to build a system that is fair, respect- ful and courteous to all. 1. Pre-payment Pre-payment of a percentage or all of an invoice is ideal for cash flow purposes. If you are in a service industry, have a plan for how you will manage a charge for unforeseen and additional changes to the job. 2. Immediacy If you invoice upon completion or provi- sion, an invoice should be issued on the spot for immediate payment. Accounting software such as Xero will help you to issue the invoice straight away, and take immediate payment via eft, card or cash using a mobile or desktop device. This is effective because the customer still feels the value of the product or service you have provided. 3. Following up If the client is slow to pay, it is important to have a combination of automated fol- low-up processes and a personal touch. Applications like Debtor Daddy (funny name) and Apxium are effective reminder tools that can link directly to your accounting software. They’re especially effective for forgetful yet capable debtors. A personal touch is necessary to understand the cause of the slow pay- ment and to navigate the often strong emotions that accompany financial issues. If you believe a client or customer is genuinely in financial distress, convey your understanding and have a flexible process and payment plan available to offer. If you have reason to believe the client is capable of paying, a personal and sensitive explanation of your position and necessity to pursue payment via auto- CONTINUED ON PAGE 18 CENTRAL COAST BUSINESS REVIEW AUGUST 2020