Managing the transition away from JobKeeper
Reducing your workforce is never an easy decision, especially during a global pandemic. However, with JobKeeper payments coming to an end on March 28, struggling businesses may find themselves having to make hard decisions.
To manage this transition as smoothly as possible, it’s important to assess the sustainability of your workforce given the outlook for your business, and fully understand your rights as an employer and the rights of your employees.
Forecast your cash flow now
With JobKeeper payments having already been reduced from $1,500 per fortnight to $1,200, and now $1,000 ($650 for employees working less than 20 hours a week), you may already have some idea as to how losing this government support will impact your cash flow.
If you’re not sure how your business will be affected, and if you don’t already have a cash flow forecast, it’s crucial you get started on one today. A cash flow forecast can help you estimate your future cash flow position based on your expected payments and receipts. As cash flow forecasting involves looking to the future, it’s important that you model your forecasts against various negative events and stressors, such as delayed customer payments or supply chain delays.
You may also want to check in with your client base and your suppliers to see how their businesses are going. This can help you to better forecast expected sales, any unexpected delays in payments or product shipping, and offer an opportunity to pitch new ways your business can add value to your client base.
Managing the end of JobKeeper
Laying off employees is never a decision that business owners want to make lightly. If your cash flow forecasting predicts that following the end of JobKeeper you will not be able to afford staff salaries, it's critically important to understand what actions you can take as they are changing.
The Australian Government Fair Work Ombudsman has a range of resources available for employers and employees that should be the first point of call to learn more.
Specifically, the 'End of JobKeeper scheme' page on the Government's Fair Work Ombudsman's website contains information about:
- JobKeeper scheme end date
- Reverting to usual pay and conditions
- Pandemic leave and temporary changes to awards
- Ending employment and redundancy
- Government support for employers and employees
Importantly, the Fair Work Act JobKeeper provisions below, which provided more flexibility to employers during the pandemic, will end on 29 March.
- JobKeeper enabling stand down directions
- JobKeeper enabling directions and agreements for legacy employers
- Directions to change an employee's usual duties or work location
- Agreements to change an employee's days or times of work
The Fair Work Ombudsman website states that, "Employees are entitled to return to their previous employment conditions once any directions or agreements end. Penalties may apply if employers issue JobKeeper enabling directions when they aren't eligible to."
There is a lot more to the end of JobKeeper that not receiving the payments, and it's important to fully understand your rights as an employer and the rights of your employees. Understanding these changes not only protects your business against the risk of penalty, it also gives you a template to follow in making difficult staffing decisions.
If you can't find the answers you're looking for on the Fair Work Ombudsman website, your accountant is always a good port of call to either provide advice or point you in the right direction.
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