Shutdowns, Closures and Employees

What are your options?

Many Practices are facing temporary closures as it becomes unsustainable to keep the practice staffed and operational during this time.

If you are considering closing, shutting down or simply reducing staff hours, it is important to inform yourself of your options and legal obligations, before acting.  Employers are required to comply with the law when initiating a reduction in  hours.  Here we outline some popular options:

1. Consult with employees and invite them to apply for paid annual leave (if available).  If your employee in unwell or required to self-isolate, ask him/her not to come to work and to provide you with a medical certificate for paid personal leave (if available).

2. If there is no paid leave available (such as with casuals), consult with employees and invite them to apply for leave without pay.  If you explain the basis for your request, as well as the alternative, your employees will likely be more agreeable.

3. Direct your employees to take leave with or without pay on the basis the Practice will be shutdown.  This is similar to shutdown over Christmas and Easter.  Your ability to do this will depend on whether your employment contract (or an applicable Award) permit you to do this.  For those using ClinLegal contracts, they include a shutdown clause.

4. Consider redundancies.  If you genuinely no longer need a role to be performed by anyone and can demonstrate this, you might consider making an employee’s role redundant.  This is a type of termination so be aware you need to follow a proper process which includes consultation, and be sure to check if any redundancy pay applies.  If you are unsure feel free to contact us.

5. Stand-down
Section 524(1)c of the Fair Work Act permits employers to stand-down employees without pay (or with pay) in serious and limited situations where there are no useful tasks for the employee to do, because work has stopped due to an unforeseen event outside the employer’s control.  This provision is more commonly used for situations like natural disasters (floods, bush fires etc) but is not limited to this.  As there is no similar precedent this provision is likely to be utilised and tested in the coming weeks.  If you need to explore this as an option and want to discuss it further please feel free to contact us.