At a special sitting in late March the Fair Work Commission approved an application made by business groups and supported by the union movement for temporary variations to the Clerks – Private Sector Modern Award (Clerks Modern Award). This decision was made in recognition of the need for employers to make immediate changes to their workforce to ease the effects of the ongoing crisis on normal business operations and protect jobs.
The temporary measures - which are contained in a new schedule (Schedule I - Award Flexibility) and set out here in full - provide greater flexibility for employers to; introduce work from home, require employees to take annual leave, change employees duties, hours of work and pay.
The measures will operate until 30 June 2020 unless they are extended further by the Fair Work Commission because of the continued adverse impact of the COVID-19.
The new flexibilities under the Clerks Modern Award
The requirements introduced by Federal and State Governments to control the spread of COVID-19, including social distancing, have had a dramatic impact on the amount and nature of work available in large sections of the private sector.
Reduce hours of work
An employer, under these new measures, will now have the flexibility to reduce the hours of work for their permanent part-time or full-time staff on a temporary basis. A pre-requisite is that the employer must reach an agreement, either collectively or individually with a permanent employee that they are prepared to reduce their hours of work.
The collective agreement, under which hours may be reduced by up to 25%, requires a minimum of 75% of the workforce or section of the workplace voting in favour of the proposed temporary reduction in hours of work.
An employer is required to consult with the Fair Work Commission about the vote, including providing details of the relevant employees email addresses so that they may be provided with information about the vote. A relevant union must also be consulted about the vote for the collective agreement. In a situation where an individual agreement with a relevant employee can be made that is not as restrictive in terms of the agreed reduction in the hours of work, employers are not required to enter the consultation process with the Fair Work Commission and the relevant union.
We anticipate that the majority of employers in South Australia that seek to take advantage of this flexibility will do so by way of an individual agreement with employees in their workforce.
Modified duties
The other major flexibility in recognition of the changing nature of workloads is the ability for an employer to require their employees to perform any duties that are within their skillset and competency. However, the modified duties, as provided, must be safe to perform, and the employee must have the necessary licences. With this temporary measure, the employer is not required to change an employee’s rate of pay.
Working from home
To provide greater flexibility for working from home, an agreement may be reached with a day employee to change the span of their ordinary hours of work to the following:
- 6am and 11pm, Monday to Friday.
- 7am and 12.30pm, Saturday.
The increased span of hours for day employees will enable ordinary hours of work to be performed over a greater span, including later at night. This will be convenient for some employers, particularly where their employees are parents that will need to manage the homeschooling of their children when schools implement this measure next term in South Australia.
Leave
The temporary measures also provide greater flexibility for employers requiring their employees to take annual leave because of the reduction or absence of work.
An employer is normally required to provide an employee with at least four weeks notice to take annual leave because of a close-down of its operations (think Christmas vacation period). The ability of an employer to require an employee with excessive annual leave to take such leave is even more restrictive with the need to provide at least eight weeks in such circumstances.
In recognition of the need for employers to be able to respond rapidly to the impact on workflows due to the restrictions imposed by Governments, these notice periods have been shortened temporarily. The notice employers must now provide to employees of the need to take annual leave as part of a close-down of its operations has been reduced to one week. Additionally, an employer and the employee may agree to an even shorter period of notice for the taking of annual leave in a close-down situation. An employer who utilises this option must provide an employee with unpaid leave if they do not have sufficient annual leave to cover the entire period of the close-down. Similarly, the notice that an employer is now required to provide to an employee who has excessive annual leave has been reduced to one week. Employers that take advantage of this flexibility and direct employees to use their excessive annual leave are unable to leave them with an annual leave balance of less than two weeks.
An ability to take ‘partial’ annual leave is also available under these temporary measures. This will be attractive to many private sector employers whose cash flows have been adversely impacted by the requirements introduced by Governments to control the spread of COVID-19.
We anticipate that many South Australian employers will take advantage of this temporary measure over the next few months because of the overall reduction and fluctuation of workflows.
Conclusion
The temporary measures introduced to the Clerks Award, which covers a large number of employees in South Australia, has been welcomed by the Government, business groups and the union movement.
Greater flexibility now exists for employers to manage their workforce in response to the dramatic economic and social consequences of COVID-19.
Should you wish to discuss how your business can take advantage of these temporary measures, please contact our Employment Law expert Ben Duggan.
** To access Schedule I—Award Flexibility During the COVID-19 Pandemic, please click here **
