Impacts from Coronavirus (COVID-19) – Changes to Hours and Salary
The Victorian Allied Health Professionals Association (VAHPA) has received queries from members in relation to changes or proposed changes to their working conditions as a result of the impacts of the Coronavirus (COVID-19).
Under the Fair Work Act 2009 (Cth) (“the Act”), enterprise agreements and awards are required to have terms that require an employer to consult on:
- major workplace change; and
- changes to rosters or hours of work.
It also allows employees to nominate their Union (including VAHPA) to represent them during this consultation.
The unprecedented nature of COVID-19 in Australia and the impact it is having on society may mean that some employers will look to implement major changes to their workforce, how they undertake work and the type of services they provide as well as other things. If you believe your employer is going to undertake major workplace change and they are not consulting on this, please contact VAHPA for advice.
Employers may also seek to change the rosters or ordinary hours of employees. Again, if you believe your employer is going to change rosters or the hours of work of employees and they are not consulting on this, please contact us for advice.
Reduction in your work hours and/or salary
Some employers are advising their employees that they will be reducing the number of hours they work and/or their salary.
If you are employed as a full time employee, your employer cannot unilaterally reduce your hours of work by making you a part-time employee.
If you are a part-time employee, you should have in your contract, or other written arrangement, the number of hours you work per week (and generally also on which days you work and start/finish times). Similarly to full time employees, your employer cannot unilaterally vary the terms of your employment contract including your hours. For example, if your contract stipulates that you are employed part time to work 22.8 hours (3 days x 7.6 hours per day) each week on Monday, Tuesday and Wednesday, your employer cannot decide and advise you that they no longer need you on Wednesdays, and you will now only work 2 days per week.
Your contract, as well as your enterprise agreement or award that applies to your employment may have additional terms about your hours of work, including those mentioned above. Employers and employees are obliged to comply with the terms of the enterprise agreement or award that applies.
Requests to reduce hours/salary
We have become aware that some employers are now requesting employees to reduce the number of hours they work, or agree to reduce their salary. This appears to be being done to assist in mitigating the economic impact of COVID-1), due to a downturn in business.
Employers generally have a right to discuss with employees any proposed changes and as indicated above there are circumstances where they must consult with employees. They must not coerce you or place you under duress to agree with their proposals to reduce your salary or hours.
If your employer gives you a proposal to reduce your hours or salary, or any other working conditions, ensure you get this in writing as quickly as possible. Please then get in contact with with us to discuss the details.
Any such change should be very clear in regards to matters as to how long the change will last (that is it should have an end date, which may be extended by agreement), and the impact on any other entitlements you have, such as taking personal leave, annual leave, long service leave, or “special leave” if this is being provided by your employer.
Further, there is no guarantee that you agreeing to a reduction in salary or hours will mean that your or your colleagues won’t be made redundant at some point in the near future. As such, you should also ensure that if you do vary your salary or hours of work, any redundancy pay and notice period is paid at your rate of pay and hours of work prior to the reduction.
In addition, Enterprise Agreements and Awards provide classifications that apply to each employee, according to their role and the work they perform. These classifications then provide minimum rates of pay that must be paid to employees.
An employer and an employee cannot lawfully, even by agreement between them, vary an employee’s salary so that it would be below the minimum amount that applies to them under the classification in the applicable Enterprise Agreement or Award. As such, if you do agree with your employer to reduce your salary, you need to make sure that your rate of pay is not less than the applicable rate of pay that applies to you under your enterprise agreement or award.
What if I don’t want to change my hours or salary?
Undoubtedly, all employees want to do what they reasonably can, with their colleagues, and their employer, to reduce the impact that COVID-19 is having.
However, not everybody is in a position to accept a reduction in hours and salary and you cannot be forced to accept a variation to your contract.
As noted above, employers may be in a position where they have to make changes to keep their business viable. Again, they are required to consult with their employees (and any nominated representatives, such as your union) where they are going to make such changes.
We have received information from some members that employers may be forced to shut down parts of their business and make employees redundant if employees don’t agree to other cost-cutting measures such as reducing hours/salary.
You cannot be selected for redundancy, or have other “adverse action” taken against you, on the basis that you rejected a proposal to vary your contract to reduce your hours of work or salary.
For example, if the employer wishes to reduce costs by 20%, it may ask a group of 10 employees each to reduce their hours by 20%. The employer may be unlikely to proceed if only 8 employees agreed, and 2 disagreed. Without being able to effectively make this change, after further consultation, the employer may need to reduce its workforce by 20% by redundancy. It would be unlawful for the employer to choose to make redundant the 2 employees who declined to have their hours reduced and thus maintain the employment of the 8 employees who were willing to reduce their hours/salary.
However, if in the example above the employer does proceed with reducing the salary of the 8 employees who agreed and not reducing the salary of those 2 employees who did not, if the employer then did need to make an employee redundant, they may be able to choose one of the employees who did not agree to reduce their salary on the basis that they have a greater cost to the business.
Employers may need to make changes to their business to deal with the impacts from COVID-19, and this may in turn affect your terms and conditions as an employee. However, employers and employees are required to comply with the relevant terms of the Act, their enterprise agreement/award, and the employee’s contract of employment.
You cannot be forced to accept a change to your hours/salary. Your employer cannot take action against you because you declined to accept a change to your hours/salary.
VAHPA understands that this is a difficult time for many in the community, including businesses. However, w don’t believe that employees’ reducing their salary or hours is in the best long-term interests of the employees, their employer, healthcare in Australia or society in general.
We do, however, recognise that each individuals’ circumstances are different. Please get in touch with us immediately if your employer is proposing or requesting any change to your terms and conditions of employment.
The above information is general only and it is not to be construed as legal advice. Your entitlements may vary depending on your Enterprise Agreement/Award, contract of employment and personal circumstances. If you are a VAHPA member, please contact us if you have any questions in relation to your entitlements.
As you can understand, the situation with COVID-19 is now an unprecedented one in Australia. As such VAHPA has provided the above advice based on the information we currently have. This may change and this will be updated as the situation continues to develop.