A practical guide for businesses to prepare for the next COVID-19 black swan event through flexible workplace management

Black swan events like COVID-19 are characterised by their rarity and severe economic impact. With the benefit of hindsight, many will claim that the occurrence of the specific event was obvious. But the truth is that these events cannot be predicted – at least not with any reasonable level of certainty.

But as we discuss below, it is important for businesses to assume that another equally catastrophic event like COVID-19 will occur again sometime in the future and put in place appropriate safeguards to mitigate the impacts. The instability caused by COVID-19 has also created a dynamic that encourages, indeed relies, on workplace transformation and we’ve seen enterprise, sector and economy wide workplace innovation occurring during the first weeks of the COVID-19 crisis. But many of these responses are temporary in nature and when business begins to ‘normalise’, that burning platform will fade away. The time to act is now.

While we should be empathetic to those businesses that have been hit hardest by COVID-19, we also need to learn how to better prepare for another wave of COVID-19, a new health pandemic, or ongoing climate change impacts. So, what are the practical workplace relations measures a business can invest in today, to be better prepared for the next black swan event?

Survive the current crisis by taking advantage of JobKeeper changes to the Fair Work Act

The Federal Government has instituted some very useful measures, which can be utilised until 28 September 2020, to help eligible businesses survive the challenges posed by COVID-19. Once employers confirm their eligibility, they should consider the following options:

  • Request an eligible employee to take paid annual leave (including an option to take double the amount of leave at half the pay);
  • Require employees to perform any duties that are within their skill and competency regardless of their classification;
  • Change work arrangement by issuing a “JobKeeper enabling stand down direction” to employees to not work on normal work days, work for shorter hours or work a reduced number of total hours; and
  • Advise eligible employees of their entitlement to take up to 2 weeks’ unpaid pandemic leave.

Understand the flexibility provisions in your business’ industrial instrument

Separate to the Federal Government’s response to COVID-19, a range of flexibility measures may already exist in your modern award or enterprise agreement. The first step is to understand what options are open to your business. Be on the look-out for ways you can quickly up and down scale your workforce, such as:

  • Flexible work arrangements, such as a reduction in hours may be entered into by agreement with employees (but note that an Individual Flexibility Arrangement cannot be used to reduce or remove an employee’s entitlements under the agreement and must leave the employee better off overall than they would be under an applicable enterprise agreement)
  • Annual leave provisions that permit your business to direct an employee to take a period of leave
  • Rostering arrangements, which (with proper consultation) may permit you to descale rosters
  • Long service leave by agreement with employees and in accordance with state legislation;
  • Stand down of employees without pay may be permissible under the Fair Work Act in circumstances where the employee cannot usefully be employed for a reason that the business cannot reasonably be held responsible.
  • Redundancy, which may be an option where the employee’s position is no longer required to be performed by anyone.

If your industrial instrument doesn’t have adequate flexibility provisions, then seek to vary the agreement or renegotiate

If you have a modern award and are not satisfied with its flexibility, consider bargaining for a new enterprise agreement. Or, in the case of an enterprise agreement, consider varying the agreement (which can largely only be done with employees’ agreement) or renegotiating it. After all, an enterprise agreement should be tailored to suit your operating model and your employees’ needs. This may include, for example:

  • Broad span of hours, providing ample stretch either side of “normal” trading hours;
  • Flexible rostering provisions, such as the ability to have short or long shifts without unreasonably high overtime rates;
  • Streamlined managerial and administrative processes, such as the ability to introduce major change with straightforward and honest conversations with employees;
  • Broad job classifications that allow employees to work across disciplines;
  • Reasonable higher duties allowances permitting employee can be flexed-up to backfill a manager; and
  • Productivity targets that incentivise employees to deliver on their side of the bargain.

Explore workforce transformation under your existing industrial instrument

Workforce transformation to meet changing supply and demand is nothing new. However, the imperative for change may well have been accelerated by COVID-19 for many businesses as they bring forward their plans to introduce automation technologies to support new ways of working. When undertaking workforce transformation, it is important to comply with consultation requirements. Develop a robust business case, well-articulated narrative, and comprehensive consultation program, which will help maintain employee engagement and ensure the business’ change rationale is well-understood.

Build trust and confidence with your workforce

Mistrust in the workplace can stall or delay achieving workplace reform or transformation. A workforce sceptical of management will invariably make the task of achieving favourable outcomes during enterprise bargaining considerably more challenging. Even in periods of normal business operations, an undercurrent of cynicism can manifest itself in numerous ways – absenteeism, sub-optimal productivity, and in some cases, increased trade union membership and a disengaged workforce. The first step for any organisation is to look inwards to examine its values and consider whether it is always honest and transparent. It is critical for senior management and line managers to live these values in order to build trust and credibility. Without these core qualities, everything else may be dismissed as window dressing. Communication should be frequent, ongoing and not commenced as a part of crisis responses if it is going to be most effective.

Maintain robust working relations with the relevant trade union

Union membership rates in Australia are falling, but do not discount their influence. The power of trade unions stems not only from the size of their membership pool, but from the mechanics of the workplace relations system itself. In our experience, a collaborative approach to your union relations will deliver the best results. Have honest and frank conversations to identify win-win outcomes. Where your workforce has elected to involve a union as their representative, positively engage with the union, but not in lieu of maintaining ongoing communication directly with your employees.

Essential first steps to put you in the box seat for productive bargaining include:

  • Develop a robust understanding of not only your business requirements, but also industry standards, competitor comparisons, employee preferences and likely union claims;
  • Undertake detailed financial modelling so those accountable for workplace relations have clear visibility of cost and the value of different approaches to flexibility;
  • Define your business’ workplace relations governance structures, including a steering committee, negotiation parameters and options, reporting lines, escalation points, and accountabilities;
  • Actively align Management, particularly regarding risk appetite and the path to achieving workplace reform, and up-skill line managers to be able to deliver on this vision;
  • Develop a comprehensive approach to workforce management, internal communications and employee engagement, including segmentation of communication messages and channels;
  • Establish a defensive union management strategy that anticipates union tactics;
  • Double-check your compliance at every stage so that your businesses’ reform journey is consistent with the requirements of the underpinning industrial instrument and Fair Work Act; and
  • Look beyond the next six-month and plan reform over several horizons and several enterprise agreements.

These are all very reasonable workplace relations objectives, but getting it right takes time and careful strategic planning.

Additional author: Moggy McIntyre.

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