Employment law: the implications of COVID-19 for real estate agents

Business, Coronavirus, COVID-19, Industry News,  Principals

A few weeks ago, the World Health Organisation (WHO) declared the coronavirus (COVID-19) a pandemic (an infectious disease outbreak that spreads on a global scale). Almost immediately a mandatory self-isolation period of 14 days was imposed on all people entering Australia from overseas. As the virus continues to spread, and governments continue to impose mandatory restrictions, it’s important that employers and employees understand their rights and responsibilities.

At the outset, please note the following in respect of the information in this article:

  • It’s current at the time of writing, however, due to the rapidly evolving nature of the guidance surrounding the coronavirus (COVID-19), it’s prudent to regularly check the information available online at the Fair Work Ombudsman and the Department of Health; and,
  • It’s general in nature. Additional rights or obligations may arise under the Real Estate Industry Award (the Award), an enterprise agreement, employment contract or workplace policy applying to a particular employment relationship. It also remains possible that the Government may enact legislation to address the impact of coronavirus (COVID-19) in respect of employment matters.

Over the preceding weeks, the predominant concerns raised by principals of real estate agencies have related to the restructuring of their businesses by reducing staff numbers, altering rosters and work hours.

Q: What if I need to make employees redundant or reduce working hours?

Many businesses are currently facing the reality of government closures, restrictions on trading or significant downturn in business. While redundancies and stand downs remain an option, some employers may also consider reducing employees’ work hours with a view to retaining and supporting as many staff as possible.

Employers cannot unilaterally alter an employee’s work hours (except in the case of casual employees who do not perform work on a regular and systematic basis). If an employer wishes to reduce the hours being worked by employees, a transparent consultation process is critical, noting:

  • Some enterprise agreements and Clauses 26 and 27 of the Award require that employees be consulted in relation to major workplace changes, including variations to rosters or hours of work;
  • A unilateral reduction in work hours will likely be a breach of the employment contract and may amount to a constructive dismissal or redundancy; and,
  • Employees are less likely to agree to a reduction in work hours unless they understand the alternatives (which may include involuntary redundancies or staff being involuntarily stood down without pay).

Assuming an employer can reach agreement with employees about a reduction in work hours, the agreement should be recorded in writing, signed by both parties and a date agreed for review of the agreement with a view to the employee resuming their ordinary hours once the current crisis passes. Other avenues which may also be explored in order to avoid or minimise the impact of redundancies or reduced hours may include inviting employees to volunteer for redundancies or reduced hours, and inviting employees to voluntarily take paid or unpaid leave.

Where it becomes necessary to make an employee redundant, principals should have regard to the strict consultation requirements set out at Clause 26 of the Award. A failure to comply with these obligations may result in a claim for unfair dismissal on grounds of lack of procedural fairness or non-genuine redundancy. All notice and remuneration requirements relating to redundancies are set out at Clause 30 of the Award and Sections 119-123 of the Fair Work Act (FWA).

Q: Can an employer let someone go who is still subject to a probationary period?   

Pursuant to Sections 382 and 383 of the FWA, an employee who has not completed at least six months’ employment (or 12 months, if the employer is a small business employer), is not a person who enjoys protection against unfair dismissal. However, an employee in that position nevertheless has an entitlement to the general protections provided at Part 3-1 of the FWA.

Accordingly, principals must exercise caution when seeking to terminate an employee’s employment, even if the employee is still within their probationary period. As each case must be assessed having regard to its individual circumstances, principals are urged to seek bespoke legal advice prior to dismissing an employee who remains under probation.

Q: Can contractors be terminated without notice?

Where a business has engaged contractors, the terms of the contract should be considered on a case by case basis when determining whether the contractor’s services can be varied, suspended or terminated. To avoid the risk of a claim for breach of contract, principals ought to seek independent advice prior to terminating a contractor’s retainer.

REIQ Members are reminded that they are entitled to access 30 minutes of free best-practice advice on these issues via the REIQ Legal Advisory Service.

Carter Newell partner Andrew Shute and special counsel Lara Radik recently published an article regarding the employment law implications of COVID-19. As you will appreciate, new information is continually being released and employment law issues are therefore constantly developing and changing. Carter Newell will be updating this article regularly and encourage you to check back from time to time. Click here to read the current updated version.

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