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Australian businesses wrestle with one of the most complicated workplace relations systems in the world. The rules around wages — known as awards — are notoriously complex. Many countries have one minimum wage. In Australia, we effectively have hundreds. You need to be sure that you’re paying your staff the right amount. Don’t risk trusting the wrong advice. It’s too easy to get wages wrong.

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Employsure founder Ed Mallett featured on Sunrise.

Ed appeared on Sunrise on September 9th, 2020 to discuss the latest changes in JobKeeper 2.0.

Interested in hearing more? Check out our weekly live streams, every Friday at midday on Facebook.

Ed Mallett On Sunrise, 9 September 2020
4:04
Now Australia is facing its worst recession on record with millions of Aussies relying on government subsidies to survive. But at the end of this month businesses, workers, and the unemployed are in for some big changes.

Sure are, both the JobKeeper and JobSeeker payments will drop. New research has revealed just how concerned Aussies are. Here's what you need to know.

It's being referred to as the JobKeeper cliff and Aussie businesses are fearing the drop.

We know that JobKeeper and JobSeeker are keeping the whole country afloat at the moment. We know that it's keeping families going but it's also supporting businesses keep going during this time especially in places like Victoria where they're shut down.

From September 28 the fortnightly payments for full-time employees will be reduced from $1500 to $1200. That will drop again on January 4. If you're a part-time worker, payments will half to $750 a fortnight at the end of this month, and scale back to $650 a fortnight at the start of next year. The JobKeeper scheme is set to end altogether on March 28 next year. For JobSeeker recipients, payments will be cut from $1100 a fortnight to $815 from September 25 and remain in place until December 31.

I think it's a huge mistake to scale back both JobKeeper and JobSeeker. The only way we're going to recover as a country is if people have the confidence to spend.

New research by Mozo shows Australians are concerned. There's a lot of nervousness in the air in many households around the country about how people will be able to manage their finances and pay for things like rent and the mortgage and even groceries once the payments scale back. Mozo's data reveals 1 in 5 would no longer be able to afford their current place of residence. A further 1 in 5 are worried they wouldn't be able to afford groceries, and 1 in 10 predicted they wouldn't be able to afford child care if the subsidies ended too soon. Treasurer Josh Frydenberg says the payment will be tapered as businesses adjust to the new environment, supporting a gradual transition to economic recovery. Now to qualify for the extended JobKeeper scheme you still have to show a decline in sales for the September quarter. For companies with the sales over a billion dollars, that decline's got to be 50% or more. For companies with sales under a billion dollars, it's 30% less. And for charities and not for profits it's a 15% drop in sales.

You need to be very careful with it, for example you've had employees stood down during the last few months and you no longer qualify for JobKeeper, you're going to need to consider whether you need to bring them back which may in turn lead to you needing to consider things like redundancy programs.

And for those on JobSeeker, unless you live in Victoria, you must now connect with employment services and undertake four job searches a month. And if you refuse a job, there will be penalties. Now it is important to note that after September some people on JobKeeper may also be eligible for a part payment of JobKeeper. Your earnings will have to be below $1275 a fortnight so if you're receiving JobKeeper at a rate of $1200 a fortnight with no top-ups from your employer, you may be eligible for a part-time JobSeeker which is about $276 a fortnight, this would take your total payment to $1476 which is close to the original $1500. So there are a few tricks around it to make sure your income can be supplemented.

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Workplace relations can be difficult to understand, and the time and money spent on understanding and implementing changes can be costly.

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Employsure | Confidence In Running Your Business
1:53
Man: I'm sure I don't have to tell you that running a small business can be challenging. And the last thing you need are problems from your staff, the very people you hired to make your day easier. But, unfortunately, workplace problems can arise every single day. And as a business owner, you need to be able to navigate some of the most complicated workplace laws and wage systems in the world all while doing your day job, running a successful business. So, who can you turn to for help?

Woman: Good morning. How are you today?

Man: Good morning. I'm very well. How are you?
Ask the experts at Employsure because our day job is dealing with complex workplace relations and awards so you have the confidence and control to get on with your day job. Employsure, one of Australia's leading employment relations experts, offers peace of mind to business owners. Our experts take the time to get to know you and your business and the unique situations that you face. So, you can be sure the advice we offer isn't just a run-of-the-mill robot reply.
Congratulations Tina, and welcome to Employsure.

Woman: Thank you so much for coming today.

Man: But rather completely tailored to the challenges your business faces. What's more, we stand by our advice and we can help you should you ever find yourself faced with a claim. Now, you can't get surer than that.

Top quality advice and attentive service

Employsure's consultants are available 24/7. No matter what your fair work issue, we're here to help. Peace of mind is just a phone call away ...

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Why is the Employer Helpline Free?

Because we're confident you’ll find the Employsure experience so beneficial, we’re happy to offer this initial consultation free of charge.

This way, if you encounter more complex, ongoing issues with the Fair Work Act, you’ll already know that Employsure are the experts you can trust.

Besides, employees have unions, industry associations, the Fair Work Commission.

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Employsure takes the complexity out of workplace relations to help small business employers protect their business and their people.

I can't afford a big HR department or lots of lawyers in house. So I outsource it to Employsure."

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Client Testimonial | Pinstripe Media
0:54
Kochie: And now Employsure, not sure if you've heard of them. I don't mind saying I've used them for
years in my business. Because, being a small business, it scares the hell out of me, the employment workplace health and safety issues that we've got to deal with. And I can't afford a big HR department or lots of lawyers in house. So I outsource it to Employsure and basically I'm not not the only one Ed, you've got quite a few business owners like that.

Ed: We do, we do we've got about 27,000 small businesses that subscribe to our services across Australia and New Zealand.

Kochie: Because I came across you when you were a startup.

Ed: You did.

Kochie: Started, just started I loved the idea.

Ed: Yeah I'm grateful for the business, now it's been a crazy few years of growth and certainly like a lot of businesses we're getting our first days of a really big seismic challenge now as well, to handle that.
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Fridays With Ed Live Stream - 16th October 2020

In today's live stream, Ed talked about guiding a business through crisis, leadership challenges and self-management and managing and communicating with employees.

Fridays With Ed | Leading Through COVID-19
48:47
[00:00:08]
Ed: Hi, guys. It's Ed here on Friday, just tuning in from the office. Once you might say. That's certainly what everyone behind the screen is saying here that, good of you to turn out to work, Ed, for once. I've had a couple of weeks doing this from home but I'm back and raring to go in the office this week. And we've got some interesting things to go through today.

[00:00:31]
This is the structure that I'm going to adopt the items that I'm gonna go through. The first is I'm gonna talk about IR reform in Australia. There's more and more murmurings in the press about what's gonna happen with any IR changes. I've been a bit of a naysayer saying nothing is gonna happen. And I'm gonna say a bit more of that today.

[00:00:54]
The second thing is, you may have read in the paper about a decision that went against Qantas relating to JobKeeper, the court decision that Qantas lost. It suggested that that might be relevant to all businesses. And I just want to talk a bit about that, in case you're worrying about that.

[00:01:14]
Third, one, just briefly. New Zealand election coming up. So I think it's tomorrow, isn't it? So I'm no political expert. Looks like a pretty foregone conclusion from what I can work out that all being done in a much better spirit than the one over in the U.S. at the moment. And I'll just talk a bit about IR platforms over there and what's happening.

[00:01:37]
Finally, I'm gonna swerve a bit away from IR Employment Relations. I'm gonna talk just a little bit about the concept of lockdown and small business and what that means for us. And then also how that's translating into my own COVID planning here, what we're doing as a business, the decisions that I'm going through at the moment which may resonate with you as to what you're trying to do in your businesses.

[00:02:01]
So let's get cracking, IR updates. So I've been saying all along that this was all a bit of an exercise in pointless futility. I think that putting a load of people in the room, many of whom don't really understand the true issues relating to IR, particularly as they relate to the majority of employers in Australia, which are you guys, small businesses.

[00:02:28]
You've got a group of people arguing about things like enterprise agreements in a room that seemed to get heated at stages. And now it's full of leaks and this what was meant to be this confidential process. But everyone's coming out in the press saying that there will or won't be agreements on various things.

[00:02:46]
The net result of it is I don't expect to see much change coming out. I don't think... And I think in fairness to Christian Porter and the government, I think their early optimism that somehow we're on some kind of wave of goodwill in the crisis, given a lot of the short-term temporary measures that were put in place, that that wave was gonna transition, or they were gonna ride it all the way, testing my surfing knowledge here. But they were gonna ride that wave all the way into the shore, really to actually push through some IIR change that no one had ever been able to affect before.

[00:03:19]
Such the distinct polarized views in Australia are about things like wages, such fundamental things to the employment relationship. So there hasn't been much sense that there's been much agreed. I mean, most we saw this week was a concession by the ACTU and you heard me say this here before as well. I'm not quite sure why their voice is so loud. I think they represent less than 10% of private-sector workers. They'll represent even less than 10% in small business. Small businesses are rarely unionized.

[00:03:57]
Some industries are but very few small businesses are. One of the hot topics has been the concept of wage theft which we're seen creep in in various states into law. And there was a concession by the ACTU that wage theft would not be used as a blanket terminology or it's not their intention for it be used as a blanket terminology for every form of underpayment, which I'm amazed it's something that they actually have to say out loud with a straight face. The idea that every time someone underpays in the most complex wage system in the world, that they would be decried as being a thief and the ACTU has stepped back from their initial sort of bombastic approach of saying that everyone underpays wages is a thief.

[00:04:48]
I think that you know, hopefully, that's just dose of reality that they're realizing. Because in the same week this week, the Fair Work Ombudsman has put out its annual report, which, again, shows lots of scary numbers about how many of us are getting sued for various Employment Relations issues. And they noted in there, for example, that they recovered over $120 million in underpaid wages this year, $120 million. It's a huge sum of money. Now, if it is right that we as employers are a bunch of thieves, then we're probably the most successful thieves in Australia. I don't think there's many people running around doing $120 million of theft, let alone the ones that got away with it this year.

[00:05:34]
The reality is that there is such a huge degree of underpayment because the system's just far too confusing. And what we should be doing is clubbing together and helping understand that it is in everyone's interest to have fundamentally a simple system whereby employers can pay their employees the right amount of money.
There is no more fundamental principle in the workplace in this that if someone engages to provide their time and their effort to you as an employee, that you obviously in return, pay them for that, and you pay them the right amount. I would never suggest anything but that. But the fact that that doesn't happen in Australia, and much more so than any other country in the OECD. Australians get that wrong, not because Australians are worse than everyone else at maths, I don't think. Tell me if you think I'm wrong on that, but because their system, the system here is just so bloody complex.

[00:06:29]
So anyway, it looks like this whole sort of very headline-grabbing narrative that wage theft is going to die down slightly, which is good. There's some talk about coming out of these groups that there's going to be government incentives to use software to work out your wages so don't get them wrong so often. That for me is just a massive statement of the nativity of the people that have been in that room. That's sort of the equivalent of a board of directors sitting there and trying to claim they know actually what's going on at grassroots level in a big business. I mean, the people that have said that obviously have no sense at all as to how payroll works and some sort of presumption that we're not already sitting there using calculators to work out how much wages should be paid. There is no such thing as a mythical piece of software that will solve how much you pay your staff.

[00:07:27]
There are a couple of companies out there that will do award interpretation for a narrow amount awards. But fundamentally, what every piece of software that's out there needs, everything needs, in terms of wages is a human interpretation of what your employee does for you, and therefore, what category they should be under the relevant award. What is the relevant award, is another question I have to answer. And you need to do a calculation of that. Now, whether it's software, a spreadsheet, or a calculator, they can only help you do that calculation once you've done the human inputs. And the errors here, often come in the human inputs unfortunately.

[00:08:06]
So they seem to have sort of feel like they've done their day's work by just announcing that the government was gonna invest in software. Software seems to be the answer to every business problem in the world at the moment. But in my experience, software doesn't solve anything. People solve things by working out what the problem was, breaking it down, coming up with a solution, and then sometimes use software to help in that solution.

[00:08:32]
But I think the government's going to, unfortunately, either do nothing or look a bit silly in what it tries to do following these IR updates. So that's the stuff there, much to do about nothing, basically. Then on to the Qantas decision. So you might have read about this. It's one of a number of things that Qantas have been getting a kicking for. And I have to say, I don't think anyone that runs a business couldn't feel some sympathy at the moment for Qantas to be... It's a reminder to us all, I think, that sometimes as small business owners, you can feel like you just don't have the clout that big businesses must have to get things done. And they always seem to have these friends in corridors of power that sort of make everything easier for them whilst small businesses are slaving away the hard way.

[00:09:31]
I think the crisis if anything has shown us that actually big businesses don't have that much clout either. So, Alan Joyce is probably wondering what he did wrong and who he forgot send a Christmas card to in terms of the behavior of a lot of the state politicians in ruining his domestic airline business when in plenty of other countries around the world, airlines are now back in the air in various different ways. And then on international basis, there is now murmurings and the language in the recent budget suggested that our borders are gonna be closed for another year, meaning that there'll be very limited Qantas flying during that time. So I feel a bit sorry for Qantas. I feel even more sorry for them because they've just had another kicking in court. It seems whatever they do they get kicked for their industrial relations stuff.

[00:10:22]
And in this case, what happened was this is, is that they have employees both paid fortnightly, some paid monthly. And broadly, what was happening was this, is that where employees were working less than the $1,500 JobKeeper wage condition in any given fortnight or period, Qantas was allocating, sometimes when they had earned over that $1,500 amount in another period, they were allocating the overs to the unders periods, so that they essentially were paying them the 1,500 bucks and not more in one fortnight and then having to top up in another fortnight. Now they were...it was found that they weren't allowed to do that. If you look at it from...if you actually stand back from it, and just say, look, the objective of JobKeeper was to keep jobs. I don't think that's particularly controversial, making that statement given that's what it's called. And the idea of keeping jobs obviously is not for employers just to act as a bank in handing over money from the government to their employees. The idea was to support and ultimately subsidize the income of those employees so that their jobs could be kept, and that the employers could carry on employing them. So what Qantas we're definitely not doing was taking money from the employees, the employees were at very least getting paid the money for what they had earned.

[00:11:54]
What Qantas were doing was avoiding what they perceived to be an unfair situation where they were paying out JobKeeper to an employee in excess of what they had actually earned in one fortnight and then having to pay wages over and above the $1,500 in another fortnight. So in essence, they were saying, look, it doesn't seem right that we're paying out this extra money. We're not being subsidized at all, and the employee is actually getting more money. So they interpreted the JobKeeper rules as saying, "Isn't it right that the employee gets what they were intended to get by way of what they're earning?" And actually, Qantas gets some financial support to pay those wages in what are plainly difficult times for the airline.

[00:12:39]
And the court amazingly found that that wasn't right. And in fact, just because the employees are doing better off than they should be by the hours that they worked is not for Qantas to get the benefit of the subsidy, the employee must keep it. So they're appealing that decision.

[00:12:56]
There's some talk about how that will affect lots of other businesses. I don't see it, personally. Shout out now if you're a business that's tried to reallocate income to different wage periods to try and flatten out how much you pay your employees. But if there's a criticism of Qantas, it does feel a bit sort of artificially constructed. They can apparently do it under their enterprise agreement. But I don't, in my experience, see many small businesses shifting around payroll dates and things like that on that basis. But tell me if you're seeing any practical problems on that basis. I'd love to see if I can answer them.

[00:13:34]
Okay. Quickie on New Zealand. So, New Zealand's got its election tomorrow. I'm feeling like putting cats amongst pigeons here today. So I think that, as I said earlier, that it looks like it's gonna be a shoe-in for Jacinda to get in there for another term. And you've heard me say on here before that I'm full of regard for her as a leader. Nothing to do with her policy or politics. I just think that as a leader she carries herself very well and I admire her for that. But it does seem to me that, you know, another term there will probably, and I say this as a business owner in New Zealand, that New Zealand seems to be heading in a fairly consistent direction to becoming the sort of Norway of the South Pacific in that it's increasingly having these socialist laden policies which make it quite difficult to employ people over there.

[00:14:34]
And again, I say this from experience, the industrial relations framework in New Zealand aside from the wages which is far more complex over here in Australia, but actually managing people in New Zealand is very, very difficult. And it's only gonna get harder I think. There's also other things that seem to be done in a very liberal verging on socialist view of the world like... They're about to have a referendum on cannabis use, which I'm told by people over there, they think will end up with the legalization of cannabis.

[00:15:10]
Now, I don't hold a particularly strong view on that either way on a personal level, but I would say this, as an employer and as someone that helps employers, it will cause problems in the workplace in that suddenly you will have additional cost and regulatory needs to check that people coming in working in your workplace, particularly those handling machinery and things like that need to have drug tests and things like that.

[00:15:32]
So there are some problems that flow from those sorts of things. Problems and red tape, and policy and cost. None of those things add to entrepreneurship and ultimately having people wanting to get into business and create jobs. So it'll be interesting to see what happens, both in that narrow policy issue, but also as New Zealand moves further and further into some of the concepts it has in its society at the moment, which seem to me to be pushing against encouraging entrepreneurship and job creation.

[00:16:06]
Very interestingly, for example, I can say that as a business with business in New Zealand and in Australia, notwithstanding New Zealand's arguably more successful dealing with COVID-19, I think the economic impacts in New Zealand for what we can see as a business are just as big as what we're seeing in Australia. They seem to be willing to accept that impact, notwithstanding the fact that the crisis never got as bad over there as it did here.

[00:16:39]
So there's a bit on New Zealand. I wanted to talk briefly about an article that I read. I'm still a bit too tied to my pommy roots. And most evenings I'll read a couple of English newspapers and see what's going on over there. And it seems to be, whether it's just the papers I read, I'm not sure, but to be...I think the technical term is a complete shit show in the UK at the moment in the way that people seem very confused about what their lockdowns mean, how they're gonna behave, and so on.

[00:17:12]
And I have to say, it does, having just given New Zealand a kick in how frustrating it can be to do business there sometimes, I am pleased that relative to the UK, things just seem so much more ordered here and in New Zealand. And, again, going back to the qualities of Jacinda Ardernas a leader, her communication through the crisis has been excellent. And whether or not you agree with how she's locked down the country at certain stages and so on, she's been very clear about what needed to be done and executed on it compared to the confused messages they're getting in the UK where you've got traffic lights, tiering, local lockdowns. They've stopped using the term lockdown now because that seems to have a negative connotation. So they're talking about circuit breakers and all sorts of things go on. And it is utter confusion over there.

[00:18:06]
What is clear over there, and I've certainly found this in conversations with friends and colleagues over there, that I think that there's a sort of...there's quite a different view about lockdown depending on where you sit in probably in the workplace as much as anything. So what I see is that business owners and those that are having their businesses impacted by the crisis tend to be very anti-lockdown and want to get back to work. And they see the balance of health and economic success as being leaning towards economic.

[00:18:43]
We then have a big, chunky group of let's say workers. I loath to use the term but the middle-class workers, white-collar workers, a lot of whom are still very pro lockdown, very pro the idea of not going back into the workplace, very pro the idea of health being absolutely paramount, and it being an offensive thing to suggest that should ever be balanced against the economy essentially. And then you get perhaps blue-collar work, where people have really found that their jobs have been affected by the crisis in the same way that business owners have been affected and they seem to be anti-lockdown as well. People that perhaps you know, say work in restaurant hospitality have lost their jobs, they're the ones that are saying, "Okay, guys, we just really need to get back to work because I can't pay my mortgage."

[00:19:41]
I read this article in the UK Telegraph. I think we're gonna post the link up here on the stream, and it was entitled this. It said, "Wealthy Supporters of a Second Lockdown Ignore the Extreme Hardship This Would Cause." I'm going to read out a little bit of it. I think it speaks to us as those that are trying to run businesses through this in the fact that it just...wherever you're based at the moment, Victoria, obviously being the standout for us locally in terms of the impact that we're suffering from this, but I just don't think that people really understood just how much impact is going on.

[00:20:21]
I don't think that as a country, either here or New Zealand, we've got a real idea yet as to what's happened to the economy in that, what you've still got is a lot of people as I say, that are pro lockdown. So I'm just gonna read a little bit out from this article that said this, that there are various wealthy supporters of a second national lockdown in the UK. I can't think of a single reason why there wouldn't be. None of them is likely to lose their jobs, let alone their homes in the next 12 months. No matter how many people die from COVID-19 in the coming weeks, they'll be able to claim that the number would have been smaller if a second lockdown had taken place. So long as the public focuses solely on COVID-19 related outcomes, and ignores everything else, the compassionate, high status, virtue signaling opinion is to support lockdown.

[00:21:15]

And that seems to me to be that, if you like an argument that has been lost. And I don't know how the business lobby and how all of those workers that are losing their job and not able to pay their mortgage didn't coordinate better to tell the story as to the impact that is now being suffered. And instead, this middle ground of people that are still very pro lockdown seem to want that debate. This idea that the health crisis is bigger than the economic crisis, on numbers seems to be farcical to be honest. But numbers just don't seem to have won the day in the storytelling around this.
[00:21:54]
It says that a bit later down. It says, "Remember when lockdown was a last resort to prevent hospitals being overrun." That was the reason we were all given at the start. Protecting the health service was the only reason given when, in the UK, Boris Johnson appeared on television in March. Most of us signed up to that. But since then..." and it goes on to explain everything that's been done. But notwithstanding the fact that we're definitely not in a position in Victoria, where the health service is anywhere near overrun, nor is it suggested that that would happen if a lockdown was stopped.

[00:22:30]
We're gonna see this weekend that the announcement, I suspect that there's gonna be no acceleration of the move out of lockdown. So none of that goes to suggest that I'm totally callous and I don't care about loss of life and things like that. But I just do, I worry in all sorts of respects, I worry as a business owner, I worry for the long-term livelihoods of the people that are pro lockdown even because I think that they will start to lose their jobs over the coming period. They just haven't seen it yet.

[00:23:02]
And I worry for the education of children, and things like that. I worry for a generation of children as to how the hell they're gonna get jobs over the coming years. So none of the worrying though is I'm expressing there is thinking. It's not my job contrary to me immersing myself in these articles to be a COVID-19 expert. What I do have to do, and this is just to finish on this before we move on to questions is to execute a "why, how, what" at Employsure, a vision, a strategy, a plan as to how we're going to get through the crisis.

[00:23:38]
And you've heard me say it here before. But we do that at Employsure by saying, "Look, our mission for this crisis is to achieve business success throughout the crisis and beyond. How are we doing that? We consistently prepare for the worst." So you've already heard me saying that I don't think that we're gonna see much relief in Victoria this weekend. We are preparing as a business to carry on with the status quo that we currently have in Victoria, which means our office there is shut at the moment, for example.

[00:24:07]
We're also preparing for business in preparing for the worst that as soon as we're seeing some growth in cases New South Wales, I don't know where they're gonna go, but we're preparing as though things are gonna get bad here again, as well. And by that focus of preparation, we enable ourselves to be, I suppose, as we have been so far, consistently in a better position than we have prepared for, which is an easier way to respond to the crisis.

[00:24:35]
And what that has meant is this is that right now I've got quite a weird phase in a way and that we came into the crisis, and it was intense and all-consuming. We seem to think that we were coming out of it. I remember saying on here and to our staff internally that we're definitely further out of the woods than we are in, thinking that we're closer to the end at the beginning of the crisis, and then Victoria happened, and then the second lockdown in New Zealand happened and so on. And it felt like we were back at the bottom of the ocean again and we were not coming up for air.

[00:25:13]
And again, it feels like we're getting closer and closer to the surface. New Zealand lockdowns gone back to the position we were in. On Monday, our Auckland office will be back to normal. There's no social distancing in those offices and so forth. Victoria whilst still in lockdown, we hope, even if it's not this weekend, we'll soon be out of it. New South Wales. I was just walking out of the gym I go to this morning and the social distancing sign was starting to peel off the wall, and it feels like everyone's sort of slightly moving on from it.

[00:25:51]
Yet at the same time, we've got a potentially in there another set of cases coming through. And we saw in Victoria how quickly things can change. I think we've all got such a short memory span for what's occurring that you've really got to remind yourself to continue to prepare for the worst. So you might remember that part of our preparing for the worst plan what we do day-to-day is we have a crisis management meeting here at 8:30 every morning. And we were hemming and hawing this week about maybe how we should stop that now and we just need to move on to a new normal.

[00:26:23]
Quite often the meetings are brief. There's not that much to talk about day-to-day. And I've said, "Look, hang on not yet. Let's carry on just at least until the end of this month, and we'll review. Because I can almost guarantee the moment we take that out of the planning cycle, our crisis management cycle, we're going to end up with an uptick in things and we're gonna be behind the game. We need to be sitting here preparing for the worst. And if that means that we're having short meetings, there's not much to say, then we're probably doing our jobs."

[00:26:54]
So I'm trying at the moment within Employsure to really achieve a consistent discipline in keeping up that form of crisis management. And I don't know that I'm right in doing that. And it may be that my colleagues here are getting fed up with having regular meetings that don't say much. But I'd much rather prepare in that vein than I would lose control of things by pretending everything's back to normal just because the social distancing signs are peeling off the walls.

[00:27:24]
So the message for me as to what I'm doing is just when you think you're starting to drift, that's when you increase your discipline in your crisis management. I was having a chat with one of you guys that watches this live stream on email over the course of the week. And she quite bluntly said to me, she said, "I see that less people are watching these days." [inaudible 00:27:47] Funny enough, I think that's a good thing.

[00:27:53]
It's a good thing in the sense that it means people are less craving need and perhaps have less confusion. That's a positive thing for business at large, which is a positive thing for my business. And that it means less of you are gonna be ringing and saying that, unfortunately, you're struggling and so forth. And that's what I'm seeing, which is good news. But at the same time, I don't think it changes the need for me to do what I want to do with this, which is to continue to communicate through the crisis and to help you and myself through it.

[00:28:27]
And to that end, I suppose the proper way of looking at this is that you end up being a bit more like the orchestra on the Titanic, you know, sort of being...carry on playing as the ship's going under the waves. So even if less of you are watching, I'll be here until you tell me to bugger off making sure we're supporting you through this. So that's it for me for the moment. We have Stewie here to read questions this week rather than my very amateurish version of [inaudible 00:28:56]. You probably didn't even bother to watch last week, Stewie, but I did pretend stew voice from the side.

[00:29:04]
Stewie: I did. I did watch and it was sterling effort.

[00:29:07]
Ed: Thank you. Thank you. It wasn't as effective but I thought I'd try it out.

[00:29:12]
Stewie: We'll see.

[00:29:12]
Ed: A bit of stew to the mix.

[00:29:17]
Stewie: Ed, there's a couple of comments to start it off today from both around daylight saving. Margaret says, "Good day from North Queensland. I remember that you're on funny time." And Elena says, "Nearly missed you because of daylight savings."

[00:29:29]
Ed: There we go. Yeah, it's funny isn't it? I travel to Queensland so much normally that I just haven't...because I'm not going there at the moment I'm sort of tweaked about that. So I apologize for the flux change, out of my control.

[00:29:46]
Stewie: From Alicia, "Hi, Ed. Is asking an employee to work at one of my other store locations a reasonable management instruction? What can I do if they refuse?"

[00:29:57]
Ed: Hi Alicia. So a couple of things. If we answer that as though you're not and never were a JobKeeper business, well, Alicia, if you're the Alicia I've spoke to before, I think you were. But let's assume for a moment that you're not, it will depend a bit on what the contract of employment and/or awards says about location of work. But in what you've asked, there you said, "Can I ask an employee? Would that be a reasonable management instruction?"

[00:30:31]
So you can ask anything, frankly. And if the employee agrees to it, great. And part of the challenge, therefore, is just asking it in the right way so they're more likely to agree to it. That's a sort of HR problem rather than a technical or a communication problem, rather than a technical one. Can you force them to do it? I think is what you're really asking even if they don't want to.

[00:30:57]
So if you're not and never were a JobKeeper, and the contract of employment doesn't have that level of flexibility then you can't force them, therefore you can't say that's a reasonable management instruction. But if you are a JobKeeper or you're what's known as a legacy JobKeeper business, then there are rules relating to where and when employees work, different rules relating to how much notice you need to give them to make those changes, and so forth. So I'd urge you to reach out to us to talk about your specifics if that's an important issue they need to work out.

[00:31:38]
Stewie: And, Ed this one from Edgy is getting a bit of engagement. Edgy says, "Talking about JobKeeper, any ideas about staff members who are doing their job during JobKeeper on minimum hours and essentially getting free money from the JobKeeper top-up are now doing the same job and taking more time to do it to get paid more. One could argue that they can do their job on the hours they were doing during JobKeeper, and now they are possibly committing time theft by doing the same job but taking longer to do it since they don't have the free money coming in.

[00:32:08]
Ed: Yep. Hi, Edgy. Time theft, I like that. Employers are getting accused of wage theft which... I'm not promoting workplace harmony, am I here? Suggesting employers should fight back talking about time theft. I feel like I have time theft sometimes I've got my weekly meetings on Friday afternoons with my Head of Digital Marketing who's looking at me here. I'm gonna accuse her of time theft today.

[00:32:40]
That's a bad joke. Can you accuse... So, the reality is this is Edgy, what you've got is a performance management problem. So if you know that that person is able to do the job in a certain number of hours, and that number of hours is less than the amount of hours that would have equated to the $1,500, i.e. they were piling through their work so that they could bugger off early and then they'd still get 1,500 bucks, you now know as a consequence that they're able to do it in that time. And you're perfectly entitled to performance manage people.

[00:33:16]
There's no legal right for someone just to drift at work. So you need to have a look. It's obviously hard without knowing the specifics of the job that they're doing that if people are taking longer to do it, then they might reasonably be able to, then you need to performance manage them. And it's not really a JobKeeper question. Therefore it's an HR question. ER question, how do I performance manage someone? How do I engage them so that they work actually at optimum productivity?

[00:33:47]
Stewie: This one from Allison, another JobKeeper question. We have two employees who are ineligible for JobKeeper as they are casual and haven't been with us for 12 months. Are we able to change their status to permanent part-time and start to claim JobKeeper for them?

[00:34:04]
Ed: No, because by the time you change it they won't have been employed on a permanent basis on the date at which they needed to be for eligibility.

[00:34:14]
Stewie: Ed, this one from Christian. "Ed, I have an underperforming employee. They're aware of the situation and I'm trying to constructively improve their performance but they really need constant oversight and micromanagement. They're working from home and I'm busy too. Any advice? Can I insist that they be office-based to make it easier?"

[00:34:34]
Ed: Words like "insist" are always a bit of a flag in Employment Relations. But certainly, if you've got someone that is working from home and they are not performing, the way in which I interpret the rules in, I'm gonna assume you're not in Victoria at the moment, is that people if they can work from home, they shouldn't work from home if it is reasonable for them to do so. In that reasonableness that you get the opportunity to say, "Well, hang on a second if their proper place of work is in an office, in a workplace, and it's because of the crisis, they're at home, then if they're not performing well, and the alternative is that they're gonna carry on getting performance managed, and potentially even, therefore, getting dismissed, it seems to me to be reasonable to bring them into the workplace to give them the proper training and oversight. And in fact, that would be something I would love to do before you say escalated the process towards any sort of termination process. Because you should really try all of those things to try and get them to perform in their job.

[00:35:41]
The other things to watch out for, though, and this is perhaps the more cynical end of management is that the way in which the law is set up is that you need to consider when someone gains the right for unfair dismissal claims. Therefore, consider whether you need to look at if they're not performing, look at cutting losses essentially, and moving someone on before they accrue the right to sue you for unfair dismissal. It's obviously easier to terminate someone's employment before they have that right, and sometimes you just need to make an honest decision with yourself. Is it worth incurring the risk of that sort of claim against bringing the employment to an end before they accrue the right to sue you for that?

[00:36:31]
Stewie: Ed, this one from Liz. Apropos of you mentioning Qantas a little earlier. She says, "Isn't the Qantas time shifting a similar concept to offering time in lieu?"

[00:36:44]
Ed: The way Qantas did it is it similar to offering time in lieu? I don't know. I'd need to think about that, Liz, to be honest. So someone has done over time and you say, we are gonna give you time in lieu. You've worked the overtime in let's say fortnight one, and then in fortnight two, you have time off in lieu. Yeah, there is a similarity. I think that you're right. That is a risk that then you say "Okay, I'm not gonna pay you in fortnight one, anything but the $1,500 that you actually earned. And then the extra hours, I'm gonna put into fortnight number two as time off in lieu."

[00:37:32]
But of course, if they weren't otherwise gonna work in that fortnight. So it's hard to schedule them for time off in lieu in a period they weren't otherwise gonna work but there are similarities. Makes me realize that you will need to look at specific cases for people maybe like yours, Liz, to work out whether you've got a specific risk if that is a problem for you.

[00:37:53]
Stewie: Ed, this from Gary. He says, "Hi, Ed. How does long service leave the crew for staff that are one, employed only on the hours that JobKeeper will cover, and two, working hours above those covered?"

[00:38:09]
Ed: So long service leave, it accrues based upon the hours that have worked, not based upon the hours that might have otherwise been worked under JobKeeper. I think that answers that. So you look at the hours that have been worked.

[00:38:26]
Stewie: Okay. And a short one, Craig. "Any updates on the casual conversion case?"

[00:38:34]
Ed: No, no updates that I'm aware of. I think that it's proceeding to an appeal. The wheels of justice move pretty slowly. So I don't expect any updates imminently but we'll let you know as soon as we hear anything.

[00:38:46]
Stewie: Okay. This is from Sam. He says, "We stood down some staff and are looking to bring them back. However, we did keep some stuff on throughout COVID. I'm worried about the cultural impact of moving back to our normal workplace that is potential rifts between the staff who got stood down versus the staff we got to keep working, and potential tensions with us as the owners. Plus, culturally speaking, we are not the same business we were six months ago. Do you have any thoughts on this?"

[00:39:17]
Ed: Yeah, I do. I have some thoughts on that. I have two groups of thoughts. The first thought is relating to the cultural, I suppose. The most general comment I can make to any cultural issue is that the best way to deal with cultural issues that you are worrying might occur is not by just obviously sitting and stewing on them, but to start expressing them and communicating them. Those have led best through the crisis, I think have been those that have been honest and open. Used the three C's of communication, clear, consistent, and concise. So speak to your staff about that. This is what we're doing. So and so has been away. So and so has been stood down. So and so worked through. This is why. This is what we're going to do about it. Maybe have a meeting, if you're really worried about the air being murky. Have a sort of clear the air meeting. Invite people in to have a chat about any concerns they might have about coming back into the workplace.

[00:40:15]
And that probably gives you a chance to air what it is that you think makes you a different business now to what you were six months ago. So that's my general recommendation around those cultural issues if you like. As to the question of difference, I suppose asking and checking to see whether that difference actually means you don't need all of the people that you're bringing into your workplace. Has your business reshaped? Are your staff requirements different to what there were six months ago? In which case, you need to be starting to think about reorganizing, restructuring your workforce in order to meet the needs of the business, which might result in things like redundancies if that's necessary. But you should be thinking about that sooner rather than later. But I think that's more fair than bringing people back into the workplace, just because they used to have jobs and then realizing that you actually need to dismiss them a few weeks later. So just start doing that critical thinking about who you need in the workplace.

[00:41:16]
Steve: Ed, this one from Russell, apropos of the potential cannabis legislation in New Zealand. "If cannabis gets legalized, who pays for the drug tests at work?"

[00:41:28]
Ed: First of all, I hope that's not Russell, our head of sales in New Zealand. We're all about legalizing cannabis. I'll take that up with you privately, Russell, if that it. Who pays for the drug tests? It would likely be the employer. A lot of workplaces will have mandatory drug testing already, particularly those high-risk workplaces with heavy machinery. So it wouldn't really be much of a change there. But it may be that in other industries, which don't have such stringent drug testing rules but might start to need them, it will typically be the employer. It's less the payment to be honest, that's the issue. It's the access to the testing, making sure you have policies in place that enable you to actually do that so that you don't end up with disputes about someone's rights if you suggest that they needed a drug test.

[00:42:27]
Stewie: Okay. Ed, this one from Lorraine, she says, "I'm planning to bring more staff back to our workplace but I have an employee who is refusing to catch public transport, and insisting that I either have to pay for her Uber or her parking. How can I approach this?"

[00:42:44]
Ed: So again, I suppose it comes in two parts. I can give you a pretty blunt Employment Relations answer to that. But that's not really...it doesn't really solve your problem. The problem will get best solved by communication with that employee. Try and put yourself in their shoes. Why are they so worried about that, rather than simply saying, "Well, you know, trains and transport are open, and no one's saying you're not allowed to use it. So get on with it, or else." You're better off having a frank conversation and trying to be persuasive and understand what their problems are. Let's say, for example, that they live in an area that has been a hotspot or is a hotspot and/or they have elderly relatives that live with them. There may be specific circumstances that you can help manage them through or you might recognize them. Say you know what? I understand why they are reluctant to do that. Maybe I will pay for their transport. But if you go through that process, and you can hand on heart say, look, I still think that it's entirely reasonable to ask that employee to take public transport based upon the fact that ultimately the state is determining whether public transport should be open and it is open. And therefore, we think that it's reasonable for them to come in. If they continuously refuse to come in, then you might get into a failure to follow a reasonable management instruction, which might result in disciplinary proceedings. But there's a whole sequence there. Don't rush to the end of it at the start.

[00:44:15]
Stewie: This is from Judith. "We're looking towards the Christmas and summer school holidays. It seems our staff haven't asked for as much annual leave as they normally would by this point of the year. I'm starting to get nervous about carrying that leave financially. Can I force them to take holidays now?"

[00:44:30]
Ed: Yeah, good question, Judith. I think a lot of businesses are suffering. I think we talked a couple of weeks ago about the fact that we're seeing it here, other businesses are. You can only force them to the extent that you're relevant awards and/or your contractual provisions enable you to go through a form of shutdown, including the most normal form of shutdown is around the Christmas period. Obviously, you need to evaluate that against your business needs, your operational needs during that period. But you can move forward to have a shutdown if you have the right to do so under the relevant instruments. If you don't, then it becomes a matter of agreement. And you can't typically force people to take leave.

[00:45:20]
There's also a communication element in that, which is if people are consistently not taking leave, you should be talking to them about their health and welfare, and encouraging them even if you can't force them to take leave. Finally, I think it's...we're all gonna have to keep a bit of an eye on this over Christmas in that, if people are saying, "I'm not gonna take leave, but I'm not really gonna work either," then you need to make sure that by now your systems and processes are in place to really understand what someone's productivity is just to make sure that you're not caught out by people bludging, I suppose.

[00:46:01]
Stewie: Ed, this one from Naomi, she's a client. "We have an employee that started in June that is currently doing over the 80-hour requirement for JobKeeper. However, the four weeks prior to first of July, they only did 20 hours due to border closure. This indicates that he is not eligible. Can we ask the ATO to allow him to be eligible for JobKeeper based on the current hours?

[00:46:23]
Ed: Hi Naomi. I'd love to answer that but I'm unfortunately not going to because it's probably a question that should go to your accountant, apparently.

[00:46:34]
Stewie: From Ingrid. "Any update on the IIR reform working groups announced by Christian Porter some months ago?"

[00:46:41]
Ed: Just the stuff I waffled on about earlier, which is much to do about nothing. Lots of noise and scrapping, fairly, unsurprisingly. But vis-a-vis small business. You've got COSBOA is speaking loudly about getting a Small Business Award, I don't think anyone seems to be saying that that's necessarily going to come into play, but that's their position. But really, I don't expect much to come out of it. It's like putting cats and dogs in a confined space and expecting them to come out friends. I just don't... Yeah, ultimately, you're gonna get through these things with strong leadership instead of what they seem to be doing, which is expecting people suddenly work things out and get on.

[00:47:28]
Stewie: And, Ed just a couple of comments to wrap it up for today.

[00:47:31]
Ed: Sure.

[00:47:33]
Stewie: This one from John. "Ed, my wife reckons she's been under 35 for at least the last 15 years. Do you think I can get the new wage subsidy for her?"

[00:47:42]
Ed: It's a very good question. You or your wife might be pleased hear there was something in the media about how the opposition is saying that they're not gonna approve the wage subsidy unless it's opened up for older people. So we'll see whether that's actually what happens to it, but it's got to be legislated. So tell your wife that regardless of her real age, currently, she's probably not eligible until that''s been properly agreed in Parliament.

[00:48:08]
Stewie: And finally, Ed, from Design Dental Group. "We just got a call from Daniel in Victoria, our Employsure contract.

[00:48:15]
Ed: Great. That's good, Design Dental Group. And you make me feel very self-conscious about my teeth. So maybe I need to come and see you while I'm in Victoria and get a checkup. Good. Thank you, everyone. I shall see you. Doing my orchestra impression on the Titanic next Friday. But please do tune in unless of course, you don't need any help. In which case, good on you. So, see you then. Cheers, guys.

Fridays With Ed Live Stream - 9th October 2020

In today's live stream, Ed talked about the Federal budget, Business and Crisis Planning and Employee management and HR tips.

Fridays With Ed | Leading Through COVID-19
47:43
[00:00:02]
Hi, everyone. Ed here. Just check in for our weekly Friday session. I'm doing this from home today, working from home. I've snuck into my wife's office space. Hoping that she won't disturb us for the next 45 minutes. It gives me an opportunity to chat to you. So thanks very much for joining. I enjoyed last week's session. We started to go a bit more into what might be termed HR leadership type advice. I might try and do a bit more of that today, just to give you a bit of a sense as to how I try to lead. Again, it's not gospel. I'm not necessarily an expert in leadership. I'm just telling you guys what I'm doing here.

[00:00:45]
And with that, just to remind ourselves as part of the way I try to lead, is I try to start everything I do, any communications I do, with being clear as to why I'm doing them. And just to be clear why we do this session every Friday. Two reasons. One, I feel like it's a little bit of my contribution to you guys. If I can help in any way to demystify, explain things that are affecting small businesses during the crisis. Second of all, there is a way in which it helps me as well. It helps me in my communications with my team here, in the sense that they get to see me visibly trying to do all we can to help the small business. And that's what we do for a living here at Employsure. We've never been more relevant than we are currently during the crisis. And I want to show our team how we can go and help you, guys. So, that's important. It also helps me, on a personal level, to stay on top of things, check that I'm staying abreast of all things that affect business owners because I wanna be. That's what I do. That's my responsibilities as well. And it gives me the chance to make sure I'm on top of things. It keeps me aligned and in perspective, I think, in sharing the challenges with you, guys, hearing a bit from you as we try and answer some questions in order to help you along, but in doing so, it helps me. So thank you for that.

[00:02:18]
So I've got a bit of a structure I wanna work through today. First of all, we're gonna talk about sick leave and annual leave in the crisis. It's a bit of a brewing challenge for small business there. And I just wanna talk to you about that. Second of all, a quick run through the budget as it may impact you and may impact Employsure as well, and just wanna talk briefly about that. Then finally, we'll go on to the HR leadership stuff, talking a little bit more about values. We talked last week about being true to your values, always self-assessing, checking that you are being true to your values when challenges arise in your business. I'm gonna delve a bit further into that today, to look at our responsibilities as leaders and the values that we set.

[00:03:10]
So, first things first. Sick leave and annual leave in the crisis. So a couple of things drew this to my attention. So, my HR director internally, Jacob [SP] Michael, came to me a couple of weeks ago and asked me what we should do about growing holiday balances in the business. So, a lot of our staff have been working from home. In the context of that, across all the people, what we've seen is a reduction in the amount of annual leave that people are taking. I'll come back to the reasons why. That might be in a moment. But people are taking annual leave less frequently, which means, of course, a leave liability is building up for the business over time. And you guys may well be experiencing a similar thing.

[00:04:03]
That's a challenge that I had actually confirmed to me by my wife, whose office I'm stealing at the moment. She works in a law firm, and she told me that they're experiencing the same thing, and asked what we were doing about it. And then finally, I read an interesting article that followed on from some research from the Australian Bureau of Statistics, who said that less and less people are taking sick leave as well. Less of a problem in terms of accruals and liabilities for the business going forward, but just quite an interesting trend all the same, and really, I think, serves to confirm why I think people are taking less annual leave at the moment.

[00:04:49]
So my theory on it is this, is that there'll be a number of reasons. There's no silver bullet as to why people are taking less leave, but a combination of these things. One, there's less for people to do, in theory, on their leave. People are traveling less at the moment. You know, if you're in Victoria and you're locked down, there's very little inclination to start taking annual leave if you can't go anywhere. And we're all in some varying degree of that, with the inability to travel into state, largely in place. So, obviously, some of those borders are softening up. But there's less reason or less places to go, I suppose.

[00:05:32]
When you are working from home, as a number of people still are, who would otherwise be in office-based environments, there's also a sentiment that... And this is a reality, I think, of working from home and why I'm not completely embracing it for our business as a long term future. The reality is that people have this higher level of flexibility, which makes them less inclined to feel that they need the leave. That's a very partial, polite way of saying that some people... I'm not making any accusations internally in our business, maybe bludging a little bit more. And I say that having just been down... I live near Bondi, in Sydney. Doesn't every [inaudible 00:06:21.200]. I think we're all aware near Bondi and Sydney. But there's this lovely swimming pool there that you can go to. It's called the Icebergs, which is quite famous. And I just went there for a swim this morning and had my morning coffee, and just overheard two conversations of people sitting in the sun, joking about working from home.

[00:06:42]
And, you know, let's face it. Let's not beat around the bush. Particularly as the weather gets better around the country, there are gonna be circumstances where people don't feel that they need to go on holiday because they don't need the mental break, because they haven't been going into the office and so forth. So, there's another reason for it. And the third reason, which is probably less cynical, is that, if less people are in jobs, then less people will take annual leave. And that's really, I think, filtering into what's going on with sick leave at the moment. There are less people in jobs, and therefore, less inclination to...less people to take sick leave. Sick leave's about 20% down across the country at the moment, interestingly.

[00:07:28]
Bear with me a second. Yeah, so sick leave, similarly, I think that, the reality is there is a certain amount of people pulling sickies that goes on in workplaces. Yeah, we know, for example, at Employsure, that Monday and Fridays are our highest sick leave absence days. Now, I'm no medic, but frankly, it's pretty unlikely that that's because people are more prone to illness on those days. I think that there is a propensity for people to take sick leave on those days, extending weekends, and so on. But those numbers have dropped through the floor as well, indicating that, again, people working from home have got less inclination to pull a sickie, so to speak.

[00:08:15]
So what do you do about it? Sick leave, not much. It should be a good thing for the business, and perhaps, might be contributing to your overall productivity. Annual leave is a good one. So, there are not many circumstances there. You'll need to check your award or have us check it for you to see circumstances in which you can mandate people going on leave. Quite often, awards allow you to close offices at Christmas time for up to a certain period. And we do that at Employsure, subject to our operational needs. And amongst other things, it does help manage a leave balance. But it also ensures that you got staff that might otherwise not be inclined to take leave, that actually get some form of rest. And remember, you've got a positive obligation to manage the safety of your staff, and you shouldn't be overworking them.

[00:09:07]
And to that end, you're assuming your award doesn't permit you to force leave in any way. What we recommend doing is this, is that you should be looking at the leave balances of your staff, looking at the amount of...or the most recent time they went on leave. And to the extent that someone isn't taking much leave, sitting down with them one to one or the staff as a group, and encouraging them to take leave to ensure that they are properly rested. Explaining to them that you have positive obligations to manage their safety and that you would, therefore, encourage them to take leave. And you can encourage them. As I say, check the award and maybe some circumstances which you can mandate it. But typically speaking, you can't. That's about as good as you can do, really, if you don't have the right to mandate it. And therefore, trying to manage down your leave balance. You'll need to consider this pretty soon. If you're looking at Christmas shutdowns, you're only permitted to do that under your award. There'll probably be some notice requirements, so make sure that you follow those if you do that.

[00:10:16]
So, there's a little bit on leave. I suspect a lot of you are having a similar experience to us on that, in that you will be having larger leave balances being accrued. I saw two or three questions come last week, saying, "Can we use JobKeeper to pay people's annual leave when they leave us?" The answer to which was, no, not if they haven't taken their annual leave because it's not wages. It's a liability that you have accrued. But, of course, if those people do take leave, you can use JobKeeper to pay their wages, which are the paid leave.

[00:10:53]
So, I can see a good question coming through from Naomi Pugsley on leave. But I'll reserve that to the end, Naomi. I'll come back to it. Second thing then. Onto budget. The big one probably for employers or in my field, at least, is this idea of JobMaker, where, if you employ someone up to the age of 29 and they have been on JobSeeker or a couple of other versions of benefit in any of the 3 months prior to them joining you, you'll get 200 bucks a week to contribute to their income. And if they're 30 to 35, you'll get 100 bucks per week. So, quite a big incentive, in fairness, to incentivize you to employ people who might have been on JobSeeker.

[00:11:50]
There's a few twists and turns in there, though, some of which the government's been criticized for already. But I just wanna dig into them a bit because the government sets up these benefits, but they're not there ultimately to pick up the pieces if you've slipped on the banana skins that sort of surround them. And you might remember, for example, under JobKeeper, there was little support for those that didn't have permanent residency, for example. So there was a sort of an incentive on the part of the employer to get rid of the people that you weren't getting JobKeeper for first. And the risk couldn't float from that, is you could get [inaudible 00:12:31] up for discrimination because you were picking on foreign staff, essentially, because you weren't gonna get a subsidy from the government. Now, the fact that the subsidy sets you up for that fall doesn't mean that you get to use it as a defense, unfortunately. You can end up being caught out, in that case, if you were dismissing staff because of their nationality, because they weren't getting JobKeeper. You could be caught out in a discrimination trap.

[00:12:58]
There's another discrimination trap here with the budget, with this JobMaker thing, in that, ultimately, those provisions are encouraging a form of age discrimination. You've got a positive incentive to employ people who are under 35, and that means that you are at risk of overlooking those that are over that age. And you could easily be criticized and sued for that. If you picked on who is...you only pick them on the basis of their age, and consequently, because you're gonna get some support and subsidy for that, you really do run the risk of someone who, say, 40, say, "Well, I should have got the job. He didn't carry out a fair and objective process. It was direct or indirect discrimination against me on the grounds of my age, or for reasons related to my age, therefore, I'm suing you."

[00:13:48]
Now, you are not gonna be able to turn around in those situations and use this as a defense. You still have to make sure that in your hiring processes, you've got some objectively justifiable reasons for hiring those people, aside from the fact that you're gonna get some subsidy for them. The way the subsidy, in fact, works at law, therefore, is this, is that, essentially, you gotta close your eyes to the ideas of subsidy, choose the best person for the job on an objectively justifiable basis, and then you open your eyes and see how old they are and whether they run JobSeeker or similar, and consequently, that you get some money for them. If you let the cart go before the horse on that, you run the risk of getting in trouble. So bear that in mind when you're looking at it.

[00:14:38]
The other two things are probably outside my domain, but I just wanna give you an insight as to why I'm looking at it as a business owner with them. So there's a couple of tax type breaks. One is this idea of buying assets that you're immediately able to write off. Now, that wouldn't work for us at Employsure because we pay tax on a cash basis, rather than on the basis of our P&L statements. So, have a check with your accountant to see how it is that you pay tax and whether that really works for you. Really don't like the idea of some of these, where you're, sort of, you know, encouraged to go out and run out and buy a new unit or something. The next thing you know, it doesn't actually make any difference anyway, you know, that you're not really being given real money there. You're being given an accelerated position on your tax, which, ultimately, you're gonna pay back anyway. So it will help some people on the cash flow basis, but check with your accountant as to how you actually pay tax. Don't get lulled into thinking you've suddenly got some free money.

[00:15:39]
And the same really goes for this, getting tax back. If you're an unprofitable business now, but were previously profitable, and there's a way of reclaiming some of the tax that you've paid, have a chat to your accountant how that works because it helps cash flow again. But I can't see how. I don't think it's free money. I think, ultimately, you're getting some tax back. But if you were making a loss this year, you wouldn't pay tax anyway, and that loss would be carried forward into future tax years. So, it might just be that it helps you out with a bit of cash flow. So, chat your accountant about that.

[00:16:18]
So, onto something that I do know a bit more about, which is, I suppose, culture and setting up those cultures in your businesses. And we talked a bit about this last night. In managing your... Not last night. Last week. Managing yourself through the crisis. We talked about the Mojo bag and so on. But don't forget that our responsibility in the business is, I've quoted before from that book "Legacy," is that we're storytellers. Leaders in businesses are storytellers. And one of the stories that you gotta tell people is, what is it that they stand for? What are their values? And I've just... I'm gonna show you a fairly crappy manuscript diagram in a second. But I just want to explain a bit about that.

[00:17:06]
Value is a really...one of those, sort of, terms. In all truth, about 10 years ago, before I started Employsure, I'm not sure what I really understood what they meant in a corporate context. So I see them as your core principles, if you like, that sit within inside each of us individually, including each of your employees. And what you're trying to do is establish a set of values at a corporate level, which marries together everything that you stand for as an individual and everything that your employees should stand for if they're the right people in your organization. So, I don't think an organization, a company teaches values. I don't think that it introduces values into someone. I think that that's a bit too patronizing, frankly. I think the people that work for you have come to you with a set of values. The best that you can hope for is that their values align with the company's. And if they don't, that you'd make sure you get off the bus pretty quickly. But you can only do that if you know exactly what the values are, and you communicate those values to your people.

[00:18:18]
So values, that's your starting point. And in a perfect world, a leader, a managing director, GM, whoever it is of the business, is really only responsible for setting the values. And ideally, they don't then have to go and police the way those values are put into action. Unfortunately, that's not really true in most cultures. Really strong cultures, brilliant cultures have a leadership which set the values, and then they allow the people in the hierarchy below them to operate the values. They don't act as a sort of police force going around checking on people and so on to follow the values. Values day to day operate through behaviors. Ultimately, behaviors. We at Employsure say, "Are our values in action?" So you'll have a series of behaviors that people are meant to comply with day to day, and in order to follow your values.

[00:19:24]
Now, sitting below those behaviors even, I'll say, is a three-tier thing, as I'll show you in a second, are what, at Employsure, we call commitments, but in some organizations, you might call rules. So, in something like a military organization, you get a lot of rules that people have to follow, and they're policed, and they're enforced from the top down. Ideally in a culture, in a corporate culture, you don't have that. You don't have this very top-down, parent-child, military-type command and control set up. Instead, what you want is your people making a series of commitments to each other, really, in order that they deliver to the behaviors, which, in turn, deliver to the values.

[00:20:07]
So I'll just show you this diagram before I then explain a bit more about what I'm talking about in practice. So, can you see that? Now really is a very basic thing. I'm sure a number of you have got children that could have done better than that. So, what you'll see is an upside-down triangle. At the top of it, it says values, in the middle of it, it says behaviors, which are values in action, and at the bottom of it, it says commitments. As I say, where it says commitments there at the bottom, if you've got a poor culture or a top-down culture, it would say rules. So the reason you've got it in an upside-down triangle is, you should have, in a great culture, you have a big set of values, slightly smaller set of behaviors, and then finally, these commitments to each other. They shouldn't be that many of them. It's people know how to... In the context, some examples to put some meat on the bones of it.

[00:21:05]
So I've talked before about the All Blacks, the New Zealand rugby team being an organization that I respect. So they're very clear on their values. They have a very core set of values, which includes this concept that they say, "We won't let dickheads play for us," they said. No dickheads is their rule. Excuse the language. It's theirs, not mine. But they basically say this. They say, "We won't have dickheads playing for us." They don't mean that in a subjective sense of, sort of, bullying, or a flippant sense. We might use it, you know, when you're talking about someone and say, "I don't like them. They're a dickhead." They don't mean it like that. What they mean is that they won't let people play for them who don't follow their values overall. Other values that they have include things like humility. So people that are not humble, they won't let play for them.

[00:22:03]
And you might have heard this before. And it's a very risky thing. I've seen a number of people watching this drop off rapidly in a second. But compare that to, say, the Australian cricket team when it was going through its troubles a couple of years ago, where there was a high risk that they did end up with dickheads in their team. In fact, it looks... I don't know if any of you have seen that program, TV program, "The Test," which is excellent, which is all about the regeneration of the team. But the team was essentially being run by dickheads. Even the captain was being overrun by dickheads, who were stopping the team from adhering to their set of values. And what had happened ultimately is that the leadership had compromised the values for the talent of the team. They said, "Oh, some of these guys are so good and so talented that we're gonna keep them in the team, notwithstanding the fact that they are dickheads and don't follow our values."

[00:22:57]
In the All Blacks, they would have said, "Sorry, I don't care how good you are, you're not allowed to play for the team." And you can cite a number of examples in New Zealand, of some of the best rugby players, by talent, that there have ever been, who have never become All Blacks because they're just not considered to be people that follow values. And in that way, what the All Blacks have built is a really strong culture that has lasted a long, long time. And of course, rule setting up businesses, we do hope last long times. And you'll not find a business that doesn't suffer in the long term by compromising that dickhead rule. Taking people that are talented, but won't follow your values, you will end up with problems if you do that.

[00:23:41]
Now, one of the problems there. And I struggle with this internally, with Employsure, is that I've got no interest as a managing director in chasing people around and enforcing the values as a sort of, like I've said before, police force, if you like, or trying to have a top-down command and control, slightly old fashioned military-style organization, parent-child, all of those things. My preference would be that we have such a strong culture that it polices itself. And what you have is a group of people who basically say, "Look, I get what the values are. Ed's told us what those values are. He's told us why they exist. We get all of that. Those values are values within myself." And these are the ways in which we're gonna behave, and ultimately, these are commitments that we're gonna make to each other and we're gonna behave in that way.

[00:24:35]
And those commitments might be quite granular. They might be things like, "We always turn up five minutes early. We are always dressed in a certain way." So in sporting teams, what happens is the players often sit down and create what they might call a charter, which says things like that. "We turn up five minutes early for meetings. We always wear clean kit to training. We always clean our boots before games." And they'll be that granular about it. And what those commitments are doing is delivering into the behaviors, which ultimately make the values work. So that's the way really good cultures work, is that the team manages itself. It polices itself. They don't have the directors of the team policing it. And in that way, they hound out the people that don't fit with the culture, the dickheads, if you like. And they self-police, force those people out.

[00:25:28]
And it's a great thing if you can get that culture working because then what you don't have is situations where you, as managing directors and so forth, have got to be the police, start doing the disciplinary issues and so on, which result in employment relations claims. You'd much rather a culture...I say hound out, that sounds a bit bullying, but a culture that self-polices and explains to people, if people don't wanna play by the rules, then they can't be on the team.

[00:25:56]
So, I listened to a thing...I'd urge you guys to listen to if you get a chance, the other day, about Netflix, a business that we all know. And they are solely known for their pretty revolutionary culture and HR practices. And one of the things that they say is that, "We are a company with no rules." And that sounds right out there, doesn't it? It sounds as, though, you know, they've got this sort of chaotic company where there's no rules at all. They don't mean it like that. And the podcast I listened to was on, I think, called "Freakonomics Radio," which is really good if you get a chance. What they mean is this, is, "We don't have a top-down culture. We don't have the leadership telling us how to behave. What we have is a leadership that sets the values, and then we collaborate with each other on the behaviors and make commitments to each other, and we self-police. We're like the All Blacks."

[00:26:54]
And that's an organization that I think we'd all, I think, aspire to. You know, let's be realistic, some businesses are still very effectively run by being top-down organizations. So it's horses for causes. But certainly, I'd like to run Employsure as a business that is heavy on values but allows the people themselves to self-police. It doesn't always happen. You know, I find myself sometimes having to manage, unfortunately, with sticks rather than carrots, but we're all human, and so are the people that work in the businesses. But my perfect culture would be much more like the All Blacks or much more like Netflix, and allowing people to understand the values, clearly understand the expectations on them, but ultimately, to behave and commit to each other to behave in certain ways so they self-police.

[00:27:44]
So, there's a bit on HR. As I say, leadership. I just want to finish with a final concept about, I suppose, self-management and leadership. And it's just something I read yesterday, which I loved, and I thought you guys might be interested in. So, J.K. Rowling, the author... I'm embarrassed to say, I've never ever read one of her books. So I delve wherever I'm at in the minority there, but I've never read any of the Harry Potter. So my kids are just starting to get into it. I saw this interview by her, where she said something really, really fascinating. She said...she has this metaphor of how she lives her life. And I think it's a metaphor that applies to us all as leaders as well. She says, "I spend a lot of my time in the forest, in the trees." Which, for me, is, you know, when we're stuck in our businesses doing things, being doers, scrapping around day to day, but we're not really strategically working on the business as we should be. But she says as an author she spends a lot of her time in the trees.

[00:29:00]
When she wants to write, though, when she really wants to do her thing, she goes to this metaphorical lake amongst the trees, and that lake has a shed on it. And what she knows is this, is that when she is needing inspiration, she goes to the lake. She knows there's something within the lake that if she's patient enough, that it will give her the ideas, give her the inspiration. She's not allowed to fish in the lake. She's not allowed to go under the water in the lake to grab the ideas. She has to attract them, essentially, and be patient and allow them to come to her. And then once she's got that idea, she has to go into the shed and do the work to turn it into something.

[00:29:38]
I thought there's something there about all of our businesses. All of our businesses, ultimately, came from a lake of some sorts. We all source our opportunity because of our circumstances. You've all got businesses that are taking up opportunities that I never saw myself, for example, because we weren't born out of the same circumstances or experiences. But I was an employment lawyer that saw the opportunity to set up Employsure in a way that you guys might not have done. But then I had to go into the shed to work on Employsure, to create it. And intermittently as a business owner, I have to come back and go back to the lake for more inspiration in order to expand the opportunity, but I've still gotta go back into the shed.

[00:30:21]
And I think so many of us spend too much time, first of all, back in the trees, dealing with nonsense, often, in business management. And we need to remind ourselves, like J.K. Rowling does, to get out to the lake. But even once you're out in the lake, you can't just be an inspiration person. You can't be a vision person as a business owner. You've actually gotta get in the shed and do the grind and get the thing going. So, I just thought a very powerful thing from a pretty...really one of history's most successful authors. And it might be useful to you, guys.

[00:30:54]
So, some questions coming up from you. I've got it on my computer here, so I'm gonna duck in and out. So bear with me. I am getting from Tiffany. What do I think about the four-day week that New Zealand's seeking to implement? I don't like it, to be honest. I know one of our staff in New Zealand, actually, went to a business school, Perpetual Guardian, I think, over there, that does a four-day week. And I think, you know, these things are just so particulars businesses. And it might work for some businesses depending on the nature of their work. But I think it's a bit like the idea that your people working from home have become more productive. My honest and perhaps a bit cynical view is, more often than not, that means that they weren't very productive in the office, in the workplace. I think that a four-day week, really, just discloses that people were either not working five days in reality anyway, and therefore, not productive, rather than they suddenly become more efficient.

[00:32:05]
And my wife actually works a four-day week, and I really don't like it for her. I think that in reality, she works five days anyway, which she just gets paid for four. It just doesn't make any sense for her, to be honest. But the idea of a four-day week, and they're paid five just because you're so much better in the four days, I think it might work in some businesses. It might, well, depending on the nature of your work, is it thinking work rather than doing work? Are you in the lake more than in the shed? But generally speaking, as a broad brush thing, that just in that, sort of, flippantly chucks around as an idea, it's quite scary, to be honest, to say that that's something that the whole world can do. And I think it belies a total lack of understanding as to how businesses really work. We don't all work in offices floating around for five days, spending too much time at the water cooler. That's just not how business works.

[00:32:57]
So, Naomi, good to hear from you, one of our clients. All right, our enterprise agreement... I'm, sort of, going off-screen pretending to be Stew. I should do a Stew accent while I'm off-screen. "Our enterprise agreement states that they need to produce a medical certificate to get sick leave, otherwise it's unpaid leave. They opt for unpaid leave as they get Jobkeeper, does this unpaid leave still count as continuous service? As normally, it wouldn't. But does JobKeeper change it?"

[00:33:28]
No, JobKeeper doesn't change that as being continuous service. So perhaps it's the unpaid leave and your enterprise agreement. By the sound, JobKeeper is just a form of payment if you have satisfied the wage requirement. So just try and play that out. So, the reality, though, is that you can't, Naomi, just take random leave from the workplace. And if you don't provide a medical certificate, you're essentially absent without leave. So it sounds to me like there may be some disciplinary issues there of people are just bludging and not taking leave. So, maybe we can explore that a bit more for you. Because if people are just taking advantage of JobKeeker and just sitting at home, not even saying they're sick, essentially, because they're not getting sick certificates, they're just saying, "Well, I'm not gonna work and I'll get JobKeeper," then it may be that you've got something that you can do about that.

[00:34:27]
Nick, "How can we legally filter new employees to suit the new JobMaker scheme?" Good question. So, as I said, Nick, my methodology would be to close your eyes to their age and close your eyes to whether they have been on JobSeeker, and recruit people, and then ask those questions afterwards. If you haven't [inaudible 00:34:47] to that information before, there's just a risk you could get caught up for age discrimination amongst other things.

[00:34:55]
David, a long term follower. Thank you very much. "In the end, we were not entitled to JobKeeper the first six months due to turnover. We only registered at the start and did nothing further. However, we're now under the 30% threshold, unsure what to do next. This will be purely for the business owner and no staff." So, David, first thing, so it sounds like you've got some eligibility challenges. Have a chat to your accountant on the question of eligibility. And then if it's for the business owner... I'm assuming that, David, you may be set up as self-employed, something like that. And in chatting to your accountant, you should be able to confirm your eligibility and get support in the application as well.

[00:35:44]
And Ruth, on JobMaker, "What happens if they're under 16 and coming on as an apprentice? It looks like they miss out." That's my understanding. Bear with me a second. I'm just gonna check that position. So by the way, this stuff about the wage support is now in play. You can now start looking to recover that already, is my understanding. Now, what about the jobs? Yes, so if the age is 16 to 29, so, it looks like it doesn't matter if they are an apprentice post 16. But anyone younger than that doesn't look like they receive it, is the answer.

[00:36:38]
Anne, great to see you again. I've been here all along, Anne. Where have you been? "So, I was wondering about the new hiring credit that came out of the budget. I understand it's actually the employees who must have received JobSeeker or Youth Allowance or one in the past three months. Can we ask them this question or is it discriminatory?" You can ask them. My recommendation is that you wouldn't until after the interview. So, try not to put the cart before the horse. See who you wanna recruit based on their talents and skill set, and then ask to see whether you recover money. Look, I maybe... You know, you may look at me and say, "This guy is from a different planet. Why on earth would we do that and miss out on the 200 bucks?" You've gotta make a commercial assessment. There is a risk that you could get accused of something like age discrimination. But if you've got an apprentice position, and you're not gonna have anyone over 35 applying for, anyway, then the risk of you getting done for age discrimination is next to nil. So you might well ask it in the interview process. So, it's just a bit of a muddy thing, I think, to be asking people for the purposes of checking you can get their support. But there will be commercial situations in which you say, "Look, it's being unrealistic and we're not actually not gonna get sued for discrimination because of this. So, I'm gonna ask upfront because I want the money." So, in a perfect world, you wouldn't ask. You would then make the assessment once you've decided that they're the right person for the job.

[00:38:15]
Sammy. Oh, wow, a lot of questions. So that is good. "JobMaker, 100 credit is an interesting idea, but there, again, to be proof of age requirements. Do I have to ask for birth certificates?" Not entirely clear what the actual rules and so forth are gonna be, and how you apply and recover the money yet. So watch the space. But yes, there'll be some rules around it, which will include verification of age and so forth. By the way, on that, it wouldn't typically have to get a birth certificate, but you, obviously, when you hire a person, you've gotta go through getting that tax file number and so forth, which should be able to do it through the government systems.

[00:39:00]
Sarah, "If an employee wishes to have leave paid out, but not take it lasting on JobKeeker, is it appropriate to pay this out on top of their usual wage, which is being covered by JobKeeper?" In essence, yes. So there's a few twists and turns in that question depending on your ability to pay out leave and when you can do that and when you can't under relevant awards and so forth. So be careful about all those things. But assuming you're allowed to pay out the leave, yes, you would pay it out on top of JobKeeper. Now, that's always not in your interest. So, you might wanna have a conversation with the employee about how you can work out something that's mutually beneficial there. That maybe they take some leave, maybe you pay out some leave, but you are gonna be paying that on top of JobKeeper because it's not wages.

[00:39:54]
Ruth asking about where the puppy is. He's not here, unfortunately, Ruth. I did promise this week, but he's not here. Right. Lyn, "We don't qualify for JobKeeper 2.0 because the quarter for '19 included three weeks of our shop being closed." They didn't have closure. "It doesn't seem to fit any criteria, what are your thoughts?" Lyn, I'd love to give you my thoughts and help you through that. I know that I'll get in trouble if I do because it's an eligibility question, which should be probably answered by an accountant. So, I'm sorry about that. But that's the best person to ask with that.

[00:40:37]
Keith, "While we've been getting JobKeeper, we've just been shut out because our sales, which is the basis of the entire program, is only 27% down. It doesn't take in account our costs, which, if it does, our percent should be down 50%. The system's wrong. We may now have to put off..." Look, I agree with you, Keith. It's, sort of, you know what? When you read the newspapers around the world about what was going on with different systems, just none of them are perfect, unfortunately. We, for example, had a situation in New Zealand where there was a subsidy that we thought we qualified for. We received it. Quite a lot of money. Well, a hell of a lot of money actually. And then we had to pay it back because we didn't qualify for it. And we were significantly down in our sales, like you are, Keith. We maintained our service costs because we weren't needing to advise so many people, so we didn't make redundancies and so forth. But the way in which it's done over there was based on revenue, which, for us, because of accounting policies, didn't go down, whether it was the amount. So we got stuffed over there, Keith. So it's a frustration. But unfortunately, you're not alone in that.

[00:41:52]
Liz, "I'm currently in the hiring process and wondering how in the world we find out if someone is subject to JobMaker wage credits without crossing into discrimination. We already selected our preferred candidate, so it isn't changing our selection criteria. Just trying to budget without crossing the line." If you've already selected the candidate, you're in a good position, really, Liz. So, you can ask them afterwards, and then you can go forward and see whether you get the credit or not. The risk in discrimination is if you ask them in order to determine whether to hire them.

[00:42:26]
Belinda, "Hi. One of my staff in JobKeeper has resigned. I don't have to pay him JobKeeper beyond the week he last worked." So you have to pay the full JobKeeper fortnight in order to get the JobKeeper, but you don't pay him for hours that he didn't work. So, you need to satisfy the wage condition of paying the requisite JobKeeper amount for that fortnight, but not anything over and above that.

[00:42:58]
And Neil says he's suffering the leave problem as well. "At what point does it become excessive? Can I force people to use their leave?" It depends a bit on your award, Neil. We could have a look at that for you to understand if there's any specific rules. But then beyond that, it's really a case of managing people's safety at work, their health and safety, to ensure that they're taking appropriate leave. So you can't formally force that in most circumstances, but if there's no shutdown clauses in your award, it becomes a question of persuasion, really.

[00:43:35]
And Hailey, "Can people bludging become a disciplinary issue?" Sure can, Hailey. "How do I prove if they're away from the office?" Look, the way of bludging is difficult. Had a good chat with a client yesterday, actually, with someone who is a client after my own heart. They said they had someone who had got a medical certificate. They were clearly bludging. The doctor had signed them off. It's one of my bugbears in life, is doctors that sign... And this is a message to doctors globally. Don't sign sick certificates, unless the person's actually bloody sick. Like, it costs the economy so much money and so much pain to have people signed off work when they're not really sick. My poor mom is a GP or was a GP a long time ago. And she gets hit in the neck for me all the time about... As though she's like a spokesperson for all doctors globally for signing people off on sickies. I tell her how irritating it is as an employer.

[00:44:36]
Anyway, this client, somehow, amusingly, had got a sick note through, and he called the doctor to challenge them on it. And the doctor obviously didn't take very kindly to that. But I quite admired the gusto, really. But, yeah, it's very hard to penetrate a sick certificate, to be honest. If someone's got a sick certificate, even though you think they're cynically doing a sickie, pretty tough to challenge. If someone doesn't have a sick certificate and he's just taking time off work, then if they don't follow your processes and procedures, then, yes, there's an opportunity, as Naomi may have to look at turning into a disciplinary issue. If someone is just bludging when they're meant to be working at home, for example, yeah, if you can... Certainly, you wouldn't jump into it being a disciplinary issue. You'd have some conversations with them. But if you've got any sense, for example, that they're not responding to emails in a reasonable timeframe, or answering phone calls, they don't seem to be... You know, I wouldn't be rushing to get private investigators or anything like that. But if you are having challenges, I'd raise it as a management issue, first of all, and that management issue might turn into a disciplinary issue if they're repeatedly doing it.

[00:45:53]
So, here we go. Some questions and also comments to finish off. I'll just check this. There are more chunky ones coming through. Dale says, "One of the things that's evident in the workplace is in the sick leave, bludging problem is under paid by the guarantee of JobKeeper." Sort of, yeah, it one of the big unwritten things, I think, in JobKeeker, is how much people have suffered as a result, or employers have suffered as a result of, it's free money, since. It really is being quite detrimental to employers.

[00:46:31]
Andrew wants to know who I'm backing in the Bledisloe Cup. I think, from what I said, it sounds like it could be the All Blacks at the expense of Australia. But I know I'm very conscious of where I live, and, you know, my family growing up here, being my wife's Australian, I'll be supporting Australia all the way. Sorry for anyone watching in New Zealand.

[00:46:53]
And Virginia says, "Read J.K. Rowling's books for adults, 'The Cuckoo's Calling.'" I'll try and do that. You might be overestimating my intelligence, Virginia. I think I'm probably be better off in the Harry Potter realm than I would in the adult ones. So, anyway, do have a read of that. I've not read, as I'd say, her stuff, but I can see she must be a wonderful author because I find that lake analogy really, really powerful.

[00:47:22]
So that's it from me, guys. Thank you very much for your time today. I'm back in the office next week, with Stew, you'll be pleased to hear. So, I won't be trying to do his job as well as mine. And I will see you then. Cheers. Thanks for joining.

Fridays With Ed Live Stream - 2nd October 2020

In today's live stream, Ed talked about JobKeeper 2.0 and also discussed about the federal budget.

Fridays With Ed | Leading Through COVID-19
48:49
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...on Friday from a new location, actually. I'm doing this from home today. So it's a bit of a novel one for me. We're gonna see how I cope on my own without all of the team sitting off-camera helping me out. I apologize for anything that's a bit amateurish today, but we'll give it a go. So, what I have next to me is a screen through which I'll get fed all the questions that come through as we go. But prior to that in form of our usual structure, I'm gonna just do a bit of an intro on something today.

[00:00:38.571]

And it arises out of this is that I was last night at a restaurant with my wife, a local Thai restaurant here, which is very good, just having a bite to eat, celebrating something that I'll talk about in a moment. And I got to probably as close as I think I'll ever get in my life to feeling like a celebrity in that a lady called Margaret came over and said hello. She watches this stream. I don't know if she'll be embarrassed now if she's watching it today. She watches this stream. She runs a very successful business called Dogue, D-O-G-U-E, which is an amazing business, which includes a number of pet grooming parlors in Sydney, and then a retreat for dogs outside Sydney and kennels, I suppose are formally known. But this is business that probably takes that to a new level. 

[00:01:34.944]

And I had a really good chat with her. She came over and kindly flagged that she watches this stream and enjoys it. And we had a bit of a chat about how things were going with the business. And I'm pleased to hear that she's doing very well as a business and explaining to me that some aspects of her business have really gone through the roof with COVID, not least because people are buying more puppies, myself included. So, there are various aspects of her business doing well, some not so well. And she said to me that one of the things that she's found really interesting is that she feels that she's got a grip now of what you might call the employment relations issues surrounding the crisis, including things like the technicalities of JobKeeper, questions relating to redundancy and so forth. But what she was struggling with is what you might call the human resources, HR management issues of COVID.

[00:02:31.498]

It was really good to get that insight, that feedback from someone that watches this stream. And it made me think, you know what? It'll be useful for me to do a bit of a session today on management and HR beyond just the technical side of employment relations and trying to answer technical questions for you. So a bit of a health warning on this. What's about to come out is a combination, I suppose learnings in my profession, given that we broadly work in the field of human resources, but probably more pertinently and hopefully, more usefully, my learnings as a managing director and the founder of a business, and what I've been going through recently, and how I think I've laid the foundations for leadership through the crisis if you like.

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And the kind of issues have been flagged are things like people with JobKeeper 1.0 coming to an end with people not wanting to come back to work. I've heard this from other businesses as well, some surprise about staff being disengaged at the moment, even staff leaving, which seems to surprise a number of people. It has surprised me actually, within our own business, I've had staff leaving or have wondered, to be honest, where they're going in this current climate. And the questions, therefore, arise as to what could you do better as a leader, as a manager to lead through the crisis?

[00:03:58.053]
And I don't think you can answer that question without taking a big rewind. And it takes you right back to a couple of conceptual ideas. I'm gonna start with this. There's a really good podcast called "How I Built This," I think I've mentioned it on here before, and there's an episode on there about the guy who founded those straps that you see hanging from the roof in gyms. They're called TRX straps. And in that, the guy that founded that product, explains what it's like running a business. And he describes it in this way, I thought was very graphic, powerful, and resonated with me. He said that, "Imagine a bag of mojo hanging from the roof..." Anyone that doesn't know what mojo is probably go watch "Austin Powers," that will give you an idea, but it's a bag of character, a bag of everything that keeps you going in a day. And he said, "Imagine that bag hanging from the roof, and as a startup founder, your job is essentially to protect that bag from being cut open by a lot of people that are attacking the bag and trying to cut it open. And if they do cut it open, all of the mojo is gonna leak out and you're gonna lose your mojo, and won't be able to manage your business anymore."

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I don't know why that particularly resonated with me. But I think that in reality, a lot of the time as business owners, what we are doing is defending our bag of mojo in order to ensure that we can carry on in what we do and hopefully succeed. I hope that makes some sense to people. And I suppose just to really drill into that and what's in that bag of mojo, and another thing that I love, another thing that I've learned a lot in running Employsure is a book called "Legacy," which I bang on a lot about here internally. And it's a book about the New Zealand rugby team, the All Blacks, and the concepts of leadership within that highly successful organization.

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And there's a quote that I'll probably butcher here, but it goes something like this. And I always think of it as telling a really good...basically a job description for any of us that are running businesses. And it says this, it says that, "All great organizations..." I'm not reading this, by the way. It'll be quite impressive if I am able to rail this off. "All great organizations are born out of a compelling story." And at the heart of that story are two things. First, what it is that the organization stands for. So, that might be termed your values in corporate speak. We talk about a lot internally, and you've no doubt got your own values in your organization. You've got your own values in yourself. I'll come on to those in a moment. And the second thing is why the organization exists. What is the purpose of the organization? What is the mission? And sometimes people mix that up with vision and so forth. I use them pretty interchangeably, to be honest.

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But basically, what you're trying to understand is what the purpose of everyone working at that organization is. What are they working towards? What's the great big thing that they're they're trying to build? And I think as leaders, we can sometimes slip into probably more managerial things where you lose sight of your responsibility to ensure that the organization understands its story, and understands what it is that you stand for, and why you're there, and those two things. So the why you're there, as I say, is the reason for being for the organization. To give you an example of Employsure, what we say our why is, is that we are all about wanting to help build a better business. And we love the word help. That's the thing that gets us out of bed in the morning. That's the thing that makes us feel great about the job that we do that all of us are helping ultimately the small business community to build their own businesses.

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We love the idea of being a sort of not being the lead singer in a metaphorical band, but rather being the bass guitarist, just strumming along in the background, helping you as business owners to succeed in your roles. And that's our why. That's our purpose. And I spend a lot of time communicating that to the business, reminding my team that that's why we exist. Because if you don't remind them of that, you can slip into bad habits. You can end up with cultural rot and things like that because people just don't understand what the big picture is, what it is they're trying to achieve, and they just end up sort of treating it as a fairly functional job at best. And at worst, pulling in different directions to where you as a business owner wants to take the thing. So it's really important to get your why right in terms of how you're leading. And these are such core building blocks, guys, that you can't...I don't think you can even get on to whether you're succeeding or leading through the crisis unless you really understand first of all what your why is.

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I'll give you an example of how I think it can go wrong in a non-corporate environment when people lose their why. I've said it on here before, actually, in the risk of repeating myself. I think that a lot of our politicians at the moment have lost sight of the why as to the coronavirus crisis. They started by saying we didn't wanna overwhelm health systems. And now quite a lot of countries now, they've sort of slipped away from that into an eradication why, which then in turn has an impact on lockdowns and things like that. You can see it in the media that's being reported. You can see it in the way that Daniel Andrews is managing in Victoria at the moment.

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The level of infections in Victoria at the moment just runs no risk at all in overwhelming the health service. So you can only assume that what he's trying to do is eradicate the virus pending what none of us know because it doesn't seem that there's a vaccine on the horizon. So they seem to have lost sight of their why and they're fiddling around in the noise of what's going on. And consequently, they lose sight of that big picture, their organization, us, struggles to really understand what's going on and starts to resent being locked down, and things like that. So it's a very real example of what happens in our smaller organizations when you don't have a clear why and then you don't fundamentally stick to it. So that's the first part of our job on this job description that I extract from the "Legacy" book. It's a book by James Kerr, by the way, K-E-R-R, if you're interested.

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The second bit of what we stand for, and that's what I'm gonna spend a bit more time going into today because what I find is this as a leader in an organization that you set up the thing on day one with such purpose and enthusiasm. You've got this bag full of mojo that's just brimming. And you're there thinking, "Okay, this is, you know, gonna change the world with this business. This is really...The sky's the limit. Off I go." And truth in form, in line with that example of the bag of mojo, you just start to pick up little cuts in it during the time, and your mojo starts to seep out, and you can start to feel quite depleted as a business owner and founder. In that metaphor, when it gets too low, you just struggle to get up and then see the purpose in doing what you do day to day. You can help yourself with that by reminding yourself of the why, by the way. I find my energy in, for example, doing stuff like this, connecting with clients, speaking to clients. Even when Margaret approached me last night, I really found some energy in that. Maybe it's ego, I don't know, just being approached and talking about business. But to feel like you've added some value to someone, I find, is my purpose and helps me through that.

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But when you've got little nicks going into this bag of mojo, you can start to feel depleted, as I say, and you can start to infect your team with that as well. If you're not careful to make sure that you, first of all, protect the mojo, but second of all, even if you're suffering cuts, you've gotta show a strong face, a strong mask to your team. And I'll give you, kind of, a couple of examples of the most challenging things I've faced, the biggest cuts of my bag of mojo at the time. I think the kind of things that have really hurt me the first time that they've come through...and I hope I'm being pretty transparent here in sharing this, but I hope it's of some use. So I think the thing that I found really hard to swallow was the first time that we got a client complaint. I still find them really hard to swallow, to be honest. And I'm not saying that in a sort of cheesy, are we perfect type way. The reality is we do get client complaints. We deal with very stressful situations for clients. We deal with a lot of situations with clients. And I'd be lying to you if I said that we absolutely get it right all the time. And it's the reality of doing business, certainly at the scale that we've now got to at Employsure is you, unfortunately, make mistakes.

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And now, with the impact of that is that clients can be dissatisfied and I hate that. I really hate seeing and I found it really depleting to me in the early days of the business when I first started seeing those things come through because that was an imperfection to the thing that I was trying to build. And I was seeking this perfect thing. And I found it really hard as a business owner to accept that businesses aren't perfect. So I was really struggling to get to grips with that. And as I say, I still do. I've got a bit more perspective now. But every time I receive an email from one of you guys, if we haven't done a brilliant job, I do feel like that's another cut to the bag of mojo. And just on a personal management basis, you've gotta get better at managing your mojo so you don't feel depleted all the time from those things. But I'm sure whatever your line of business, you must have had a day where you've had a client or a customer that hasn't been as happy as you set out on day one to make them. And that's a really disappointing moment, I think, in business.

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The second really low moment I've had is when I had a disappointed employee, staff members, anyone leaving that said, "Stuff less, I'm out of here. I don't like you guys. I don't like what you're doing. I don't like the way you do it." And that also happens. And, you know, if it didn't, Employsure wouldn't exist, frankly. So, I think we've all got to front up and accept that as much as what we might think that we've got fantastic cultures in our business, there are times in which people don't agree with you in your workplace. And we might say, "Well, where's he going with this?" And I think the best mechanism for protecting you as a business owner, and your team, and staff to protect that mojo, to stop it all from seeping out is ultimately getting to peace with the fact that your organization has to have values. You have to understand what your organization stands for.

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Values so often are just this, sort of, corny, cheesy thing that you see scribbled on walls, websites, and so on, and then no one really lives them. So you first of all gotta have values. You've gotta really understand and nail down what they are. So, for example, at Employsure, our values, our commitment, we really value people that are team players and committed to what we do. And the second one is adaptability. It's really crucial in a fast-growing business like ours that you're not, sort of, a think inside the box type person, only ever do what's on your job description. You don't help out in other ways. We need highly adaptable people.

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The third one, and perhaps the most important one, to me personally, is honesty, it's a bit of a standard value, isn't it? But like a lot of you guys in founding my own business, I had the privilege of also getting to choose the early values. And I therefore said, "Look, one thing that's gotta be in there is the most core value to me as an individual, what's the most important thing to me in life and the way I lead my life and do things day-to-day, and that's honesty. I think of myself as a highly honest person. And I want that to translate into the way that I work and the way that those that I work with work to make sure that it's a core plank of our culture. So I needed to put that in there as a value. 

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And then the final value for us is something that we call that the client is king. And that's just making sure that everything we do is focused on our clients because we want to help them. We're not doing this for ourself. We're doing this for our clients. And you can see where certain organizations, I can think of certain airlines, for example, I think, get this wrong. And they don't focus on the client. They focus too much on themselves and their internal culture. And consequently, when you go on to those airlines, you end up with this terrible service experience. And we want to make sure that that never happens at Employsure. We're constantly striving to be better at what we do. So those are the values. And I talk to those values almost daily. I encourage all my leaders to speak to them as well when they're working through issues within the business. And they act as a sort of signpost, guidepost through just about everything that you do.

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And the reason they're also useful in a protective way is that when you do have circumstances where you've let someone down, be it a customer or an employee, or they perceive that you have let them down, the first thing that I always do now in protecting my mojo or the business's mojo is that I stop and say, "Can we, hand on heart, say we lived our values to the fullest? Can we, hand on heart, say that we were committed, adaptable, honest and that the client is king in the way that we've behaved?" And if the answer is no, not really, we could have been better, then you can address it. But sometimes you'll get the answer...and you gotta be really honest with yourself on this. You will get to the answer, which is, "You know what? We've done all the right things, but there's a difference of opinion here."

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And if you're really true to your values and also very self-reflective, you can't just have a thick skin and say, "Well, yeah, I think I'm all right. That's no problem." But the classic one for me is the honesty value and respect to both those issues. Can you look at these things and say, "Being honest with myself, could we have done better? Being honest with myself, did we act in an appropriate way?" And that enables you in some circumstances where you just you're [inaudible 00:19:19.967] but you have lived your values. There's no more that you can really do in life, I don't think, life or business, than live your values. And as long as you're not just pretending to yourself that you're living your values, then that's all we can do as business owners.

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So how does this all relate then to the questions that I was discussing with Margaret from Dogue last night in the restaurant? And she said, "Well, how do you keep people engaged, how do you keep them motivated through these challenging times?" So those two things, the why you exist and your values, for me, they're like drinking troughs for the business in a way. That's where you derive your food source and your energy for the business. If you don't have those two things laid out then people will lose their way, we lose track of things. You will get cultural erosion. You will end up with people doing the wrong thing and so forth. So, first thing first, you've gotta check to see that those things are being looked after within your business.

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And then second to that, you can start to focus in on the current crisis. So, the classic one I see and I've heard you guys asked me through here is what happens if you got someone on JobKeeper who doesn't wanna come back and work, and they're just malingering at home? Now the first thing, honestly, I'd ask myself in that is, why are they wanting to do that? What is my controllable in that? What could I be doing better to help them understand why it is necessary for them to be in the business? And I'd be greatly helped if I had a really clear purpose for the business and a really clear set of values. 

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So it's self-reflect first on that in order to motivate this. What am I doing wrong that they don't wanna work at the moment, they don't wanna work here? Is my storytelling not strong enough? Have I not been clear enough to the staff about why we're here, how things are going, and what we're doing to get through the crisis, for example? Statement of the bloody obvious here, but people in being human are very sensitive to environmental factors. So, if you've been stuck at home, even if you've been working at home, over the course of the crisis, if you've been stuck at home, and you may have situations where you've just started to get worried about your job security, for example. And perversely, when people are worried about job security, sometimes they end up resigning because they don't want to be the one that subject to that. They'll go out and try and find another job, and they'll just go and take something else and end up leaving you because they're worried about their job security. Are you telling a good enough story for people to understand what they need...what's going on in your business so that they don't need to go out and start looking for other jobs, for example?

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So that gives you a bit of an insight into, I think, managing people through the crisis. So I think the answers to this really go...you've gotta go back before the crisis, you gotta say, is the mission of my business clear? Do I have a clear set of values? Am I living those values? Am I ensuring that the people are living those values through the business? And if you're doing all of those things, the truth is, some people will leave your business and you will have employment disputes. All of those things will go on, but as long as you can say, hand on heart, that you're doing those things and you're doing your job as a storyteller, then you really can't do much more and you can't, therefore, let the mojo drain away from the business on that basis.

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And so, before we go into questions and just finishing on that concept of protecting your mojo against attacks in the business, for the sake of transparency on here, I'm just gonna talk very briefly about the biggest attack on the business that we have felt to date. About four or five years ago, we first received contact from a regulator who...I'm gonna tell you the story and tell you how I've tried to manage myself through it. I'm not gonna comment on the substance of things so much, but I wanna talk about how it's made me hopefully a better business person, but there have been highs and lows throughout that.

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So about five years ago, we got some contacts suggesting that we were in one way or other breaching various regulations and laws in the way that we were operating. And I was mortified to hear that, to be honest, absolutely mortified. Bear in mind that we've got this honesty value sitting at the core of what we do. And we immediately tried to do things to address it, that this thing, like a snowball, seemed to pick up pace and size and scale of time. And we just couldn't seem to do anything to stop it. And in my view, and I have self-reflected on this, try as we might, we could not find a way to stop it, such that it ended up about a year or so ago with us getting dragged into a court case by the ACCC, which is a consumer body in Australia.

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I didn't wanna be there. I would have done anything to resolve that amicably and in a way that was true to my values. When I say anything, I won't go any further than my values permit me to do on anything. I was never gonna just, sort of, sit there and pay the assigned blank checks to people because that wouldn't have fitted with the way that I operate myself and I try and run the culture of our business, which is which tried our best to be open and honest and tried our best to communicate in a way which would have resolved the matter, but we felt that we were just being asked too much.

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And we, therefore, ended up in a dispute in the courts, which took place ultimately in June of this year. And we heard just yesterday the outcome of that dispute, which was that we were successful in defending it on every count. And you can see that I shrug my shoulders there, with no glee, I'm not gonna sit here and, in any way, celebrate that outcome. That's five years of my business life, though, that have been in one way or other dedicated to resolving that issue. If I have a pleasure, it's a pleasure that my value of honesty, I feel, has been upheld. I feel that that value and the value we live it through the business was challenged through the course of these proceedings. And I'm pleased that the court found that no, we are an honest organization, the way we act, in line with the values I started out with and intend to carry on living day-to-day.

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But I found it very, very hard through those five years, and I've had some really low points where I felt like no one was listening. I was trying my hardest to run an organization that was imbued with the right values and I was having these external attacks where no one would just sit, and reason, and listen to how we were trying to do that. And instead, we ended up in this pointy end of a dispute which, fortunately, was resolved in our favor yesterday. So, I've had to manage myself through that. You will have had equivalent to that, whether it's a customer complaint or anything else in your business where you've had really low days and you will have really questioned the why of why you're doing things. I've certainly had those things.

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And just as I've suggested on here, what I did throughout that, even when I was at my lowest, I just tried to remind myself and ask myself an honest question, "Have I been running this business in accordance with our values?" And if so, there's no more I can do. I'm gonna have to end up defending myself in a courtroom if needs be. And the answer to that consistently was, "Yes, I have been." And we ended up defending ourselves. And fortunately, as I say, that was the position that the judge accepted as well. But that's a lot of time spent and a real lot of challenge to us as a business and to me personally. And I hope that ultimately, with the fullness of time, I find that the lessons I've learned from that, the personal lessons I've learned from that enable me to be a better business person because it has really tested out my will at stages. But we have now got to the other side, which I'm relieved to say.

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But I thought it might just be a useful insight when you're having lower moments in your business, you will get through this as long as you're true to values is my simple message. You've just gotta live those values every day. You've gotta ask yourself, is your business honestly living those values? If it's not, you need to address it. And if it is, then you can go to bed at night and then you'll get up in the morning and you can carry on running the thing. So it's a bit of insight for me.

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We're gonna go into some questions now. I'm gonna try and do this remotely. As I say, I haven't got the team here. They normally kick me under the table as well when I'm waffling on too much, so apologies if I have been. I'm gonna go through the questions that are being sent to me from Lee. The first one is John. He says, "What am I expecting from the budget next week? Anything we should watch out for?" So, I saw the thing as you guys would have done this morning about...That's when you know you've been talking too much when your coffee is going cold. I saw the paper this morning about this idea that for profitable businesses that have become unprofitable because of the COVID crisis that you'll essentially be able to draw back any tax that you've been paid. Now what the rules are on that and how that's gonna work, I eagerly await, I think it could be fascinating to see.

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And that could be a real game-changer, I think, for small business, you know, good small businesses that have just been harmed by the fact of lockdown versus, you know, all of us have got cracks in our businesses. And some of our businesses have had cracks made worse by the crisis, but those that have just been really unfairly harmed by the crisis would really benefit from that tax back scheme. So let's wait and see what happens with that. Less likely but certainly, John, I would quite like is, sort of, the Labour Party were calling for the government to subsidize professional services for small business so that they can get advice on things like employment relations and not bury their heads in the sand during this crisis. Obviously, ways to get free resources on some forms of professional advice, like, hopefully this live stream. But I'll be [inaudible 00:30:23.636] to bits if the Labour Party's request is heard, but we'll wait and see on that.

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So, Jenny says, "An employee's left our business but left without handover, without uploading her work documents to Google Drive as required. Can I withhold their pay, we pay monthly in arrears, until she completes the handover fully?" Technically not. Practically, the reality is that if she's refusing at the moment to have a valid conversation with you, I think you can utilize this position to make sure she picks up the phone and has a discussion with you. I don't think you'd get the same answer if you went to the Fair Work Ombudsman, who would tell you the letter of the law says that you've gotta pay people unless they've got a written agreement that you can withhold their wages, then practical circumstances where the person needs to do some work for you that they haven't done. It's not that you're saying you're never gonna pay them, but you're just saying, "Do the work, and I'll give you the pay." So, yes, personally, I would practically hold on to that to make sure that she communicates with you and you get that handover done.

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Brandon. It's better with Stu here, isn't it? It's much more sort of fluid with Stu. He seems to add a bit of charm to this show. But Brandon says, "Should we start drafting specific work from home conditions and expectations in our employment contracts or just have a separate policy? It seems like this is gonna be how we have to operate indefinitely." So, my advice on that would be to try and put it in a policy. What tends to happen with employment relations specialists is their policies tend to be used instead of contracts where people want to update and change things unilaterally. So I'd try and put this in a policy rather than having it in contract. So, you typically put it somewhere in your employee handbook and I'd keep it as a policy.

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Sarah, "We've had the bulk of our employees working from home during COVID, but it's not really part of our long-term plan. We prefer people in the office, and do you have any advice on having these types of conversations? I fear they've become used to the idea of working from home, it could be resentful." So that's sort of what I was just talking about now, Sarah, it's a specific problem within the context of making sure you're storytelling well. And I've had to self-reflect during the crisis myself on this. And I remember we went out to one of our teams, it's about 150 people around the country. I'm not disclosing any confidences in saying this. We said, "We need you to come back into the offices because..." and gave them the business reasons. And we said, "Unless, of course, you're suffering medical conditions that mean that that's not something you should be doing."

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And something like 90 of the 150 people said that they had specific conditions, which pausing and self-reflecting, maybe my reaction honestly wasn't, you know, what a load of rubbish. No, they don't. My reaction was genuinely I've clearly not done my job well if they don't feel safe coming into the office for some reason. And what can I do to control that controllable and tell a better story about it? So, we went further and spoke more about everything we were doing to make the offices safe and so forth. And we went back to our values and made sure we were transparent with people, and honest with people to try and persuade them better to come in.

[00:33:57.061]

So, first things first, check yourself, Sarah, and see whether you're really doing as much as you possibly can to tell the right stories to get people in, rather than just saying, "It's time to come back, guys." That would fairly inevitably have people that would be worried. You've gotta remember people have lived very different crises to each other. And my crisis is I spent every day in the office, I drive in there. I don't go public transports. I'm not particularly concerned about that. And just by reflection of time, I'm pretty comfortable with being out in the community but someone who has been stuck in an apartment for weeks on end, months on end now is understandably gonna be nervous and you're gonna have to do your best to persuade them back in.

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Mark, "With the border restrictions between states, can I now send my employees on legitimate business-related interstate travel? What if they refuse to go?" So, good question, Mark. So, obviously, it depends on the specific state arrangements but you can assuming that the border isn't down in a way that means you're not having to quarantine when you go in and presumably when you come back as well so the people aren't stuck. Then the legal point is...And this is a bit like Sarah's question as well. Now, the legal point is you can't tell them that that's a reasonable requirement of their job subject to what their contract says and so forth. And if they don't do it, they're not following a reasonable management instruction, and you end up in a disciplinary process if they don't do it.

[00:35:29.730]

But that, to be honest, isn't great leadership. The better way to be doing it would be to working with persuasion to get people to do it. What is the purpose of their trip? Why do they need to do it? Why can't they do it by Zoom? Helping to preempt all the sort of things that'll be rushing around their mind as to why you might be unreasonable, in their view, trying to address those things in a way you tell a story so that when it comes to saying it, they say, "Hey, of course, no problem, I'm on a plane." And I think the fact the more that you communicate, the better, and the more you help people understand what you're doing to protect them, the better.

[00:36:05.964]

Janet, "We're in a position where we have to consider restructuring and redundancies. When we started our business, I never thought we'd end up here." Me too, Janet. This is extraordinary times. "Where do I start? Can I make people under JobKeeper 2.0?" Yes. Yeah, there's no restriction on you managing your business just because you're a JobKeeper, managing your business in terms of restructuring or redundancies, just because of JobKeeper, you've gotta follow the law, of course. The starting place would be with a spreadsheet, frankly, Janet, rather than an old job. You should be looking at the way the, sort of, costs that you need to reduce by. You look at, as we have done as a business, where you're gonna retrieve those costs from.

[00:36:54.426]

Maybe there are things other than staff costs, if you still need your staff to be doing the work that they're doing. Then ask yourself by job category where you maybe have too many people or you no longer have a need for specific roles. And once you've ascertained that group of people, or individuals, or individual...and remember, it's about the job or the job category, it's not about the person. So if you have more than one person doing the same job, even if one of them's your husband or wife, you can't just simply choose to keep them and chuck the other person. What you would need to do as a starting point is warn both people that there is a risk of redundancy, and the likelihood is that one person is gonna be selected, and then you go through a consultation process and so forth. And you can get some fact sheets from our website on how to do that. But the starting point is making that assessment on a financial basis, probably speaking to your advisor about that, maybe your accountant. And then once you've ascertained that actually there's staff costs that you need to reduce, determine which roles or role, and then warn people that are at risk of redundancy.

[00:38:07.279]

Gordon, can I define genuine redundancy? "If we're not making enough money, does that cut it?" Not quite, Gordon, it's...So, redundancy relates to a role. And then basically, what it means is that there's no longer a requirement for the person to do that role or to do that role in the place in which it'ss being done. So, you might be making less money, and therefore...you know, let's think of a proverbial ice cream stand, you're making less money, which means you've got less footfall, which means that you have less people needing serve ice cream. So that would be likely a genuine redundancy there connected to the money. Now, whereas if you look at, for example, Employsure, we might be making less money and not winning as much new business as we would outside the crisis, but we're busier than ever. So I couldn't go into my advice team here, who are more flat out than they've ever been, and say I need to reduce your headcount. That wouldn't be a genuine redundancy. I'd just be sort of slashing costs. So it needs to be that you've no longer got a requirement for that role to be done by anyone. So, be careful with that, Gordon. Read one way, I suppose, by, you know, the sort of the callus business owner, if you like it, it could be seen that someone was just not making enough money is trying to reduce costs and therefore, subjecting people's livelihood to risk and so on. Just consider whether you actually need someone to do the job.

[00:39:48.777]
Attesa, "Hi, Ed. An employee who was employed at the 1st of July and was stood down mid-July Melbourne lockdown and missed inadvertently JobKeeper 1.0 payments in August and September. Is there any way they can be reinstated on JobKeeper 2.0?" They should be able to. There's a bit of a, sort of, complex web of things there. But when you say stood down, if by that you just mean that they weren't working but they were still employed, there shouldn't be a problem subject to, you know, checking the JobKeeper 2.0 eligibility. If you mean they were stood down, as in they were dismissed essentially, either as a permanent employee or a casual, I would need to just flesh out that and understand the specific details and looking at against employee eligibility.

[00:40:43.917]

Debbie, "If an employee resigns, can you use JobKeeper to pay unused annual leave? If they do not give their required notice, can you deduct one week's wages from unused annual leave on JobKeeper?" So, Debbie snuck an extra question in there, but I'll go with it. So, if an employee resigns, can you use JobKeeper to pay unused leave? No, in that...Well, I mean, the way in which JobKeeper works, as you know, is that you pay your employee what you're required to pay them and you then receive the money back from the government. So, you know, you can, in essence, use that money from the government to pay for your groceries as long as the employees received their wages. It doesn't matter where the physical money is going and such. But you won't get extra JobKeeper to pay unused leave on termination. You will only get it to pay wages that you have paid out to a staff member. So, yeah, if for example, though, you've got the situation where they didn't give their required notice, you could, in essence, say, "Well, that employee was employed by me, not until today when they walked out, but until next day in accordance with their notice. And I'm gonna pay them in accordance with that, and then I'm gonna recover that money from JobKeeper." You could do that, potentially, but you won't be given extra JobKeeper to over and above the wages that are paid to them to pay off annual leave sums. 

[00:42:17.390]

Your second question was, "Can you deduct one week's wages from unused annual leave on JobKeeper?" Not strictly, unless you've got some recent agreement with the employee that mandates that you just can't take pay off employees unless you've got a written agreement to that effect. And so, there are some circumstances, some awards which specifically commit that though. So take care to have a look at your awards because they basically say that if you don't give your required notice, the company's allowed to recoup that amount from you as part of a lawful deduction of pay. So check the position on your specific award, or allow us to do that for you, Debbie, if you're a client. If not, give us a shout. We can do that for you.

[00:43:08.374]

JC has got a similar question, wants to know if he left...had an employee left in August and paid an annual leave, "Can I still apply JobKeeper for this?" Yes, it was wages. It was paid. So, unlike Debbie, where it's accrued but not taken, what you're actually doing is paying wages that were paid, and you can claim JobKeeper for that.

[00:43:34.684]
So, George and Bernie, great to see you. I reckon he must be the most consistent watcher of this live stream. Greg and Bernie, I should say. George and Bernie, how rude. I wonder if it's Greg and Bernie, maybe they split the time they have to spend listening to me drone on that means that they can do more of it. So, how do I pay loading on JobKeeper? So you just carry on paying wages in the normal way. I'm gonna assume that your people, Greg and Bernie, are working rather than stood down and so on. And yeah, you'd be carrying on paying wages in accordance with the award. And then you recover the JobKeeper in the usual way, but you don't get loading on JobKeeper or anything like that.

[00:44:25.525]
No, back today, Annie. That's right. "What's the story behind this artwork?" It's a guy in Bondi, near where I live in Sydney, who's an artist called Dion Horsemans. And you see his work quite a bit around. So you see a lot of it in Melbourne, actually, some quite big public works he did and just the only one I could afford was the tiny little bat but my wife got it to me for a present. It's not meant to be a bat. It's some sort of geometric sculpture and he does all these cool different sculptures, and shadows, and things but...because I see him around in Bondi and I kind of like that personal connection with it.

[00:45:09.949]

So, just see a couple of these. There's a few comments, they're probably less technical, that I'm gonna go through. There's one asking where the puppy is. He sometimes makes an appearance here in my office at home but I'll bring him back next week. You only tuned in, Samantha, for the puppy. That's very honest of you. You clearly share my values. Thanks, Brenda, for the feedback. That's kind. "Bring back Stu." No, Marianne, don't bring back Stu. We told you this is a one-man show. Stu's just window dressing for it. So, don't tell him I said that.

[00:45:48.382]

So, Donna says, "So, ironically, talking about this today, I'm about to go through this with my small team. I was gonna use Dan Andrews as an example too, how it's been difficult particularly the beginning as we didn't know what the end game of the lockdown was, what were we aiming for?" Spot...it is just such a great way of explaining, I find anyway, the importance of always connecting back to your purpose. We're all human. We can all forget to do that as business owners. And if we forget, imagine what our people that are working for us feel like. They will be completely lost if you don't strictly come back to your purpose all the time. And look, we've seen really, yeah, these guys aren't mugs. They've got to the top of their political games. But they seem to not just in Dan Andrews but across the world seem to have forgotten about why they were doing this. And, you know, regardless of your opinion on whether lockdowns are good things or not, the reality is no one ever put us in a lockdown at the start saying...not even in New Zealand did they start by saying we're gonna do eradication. So, you sort of got taken into something on false pretenses and now you're being asked to stay in some form of lockdown on the basis of a new why, not a why that you believe in or necessarily bought into.

[00:47:10.381]

So, Rosemary, "Situations like yours are heartbreaking." Thanks for the support, Rosemary, and take so much out. "Thanks for sticking to your values." Rosemary, I appreciate that. You know, it's good to get that support from people. I think you can fail as a business owner, you're a bit of an island sometimes. So, yeah, the reality is the only reason you guys watch this is because we're all going through similar experiences. Mine happens to be a pretty public one. And, you know, you don't need to search too far on Google to find stuff about Employsure and the ACCC. But that's perhaps the cost of the fact that we've grown so much, we're in the public eye now. And the reality is my dirty laundry will get looked at publicly and I need to thicken my skin to some degree to make sure that I'm not vulnerable to those attacks. And the way in which you can do that, as I say, is one tool is just to stay consistent to your values. Just ask yourself every day, "Have I really lived that value?"And thank you, Ruth, for your support as well, and Diane as well.

[00:48:14.889]

And then, finally, from me, before we go, just wanted to say congratulations to Allison from CTS, who's just joined us as a client. So, thanks, Allison, please make sure that you call in with any questions that you have about the ongoing crisis and how you need to manage your staff. So, thank you very much for your business. So, guys, that's it for me. Puppy next week, I promise. And I'll be back in the office next week as well. Thanks for your help. Cheers. Bye.

Fridays With Ed Live Stream - 25th September 2020

In today's live stream, Ed talked about some updates to JobKeeper 2.0 and also discussed return-to-work strategies for employers bringing staff back into the office.

Fridays With Ed | Leading Through COVID-19
45:54
Ed: Welcome to our Friday session. I'm coming to you with a few bits of information today relating to JobKeeper. Also lots of talk in the media still about industrial relations, changes that we'll go through. And then I'm gonna talk a bit more generally about some, what you might broadly call HR challenges or issues for businesses at the moment, including your return-to-work strategies. And then finally, just some concepts of communication in the workplace that I was talking about with someone yesterday, and I thought might be useful for you to hear.

Before launching into any of that, I'm gonna just show you our return-to-work strategy at Employsure. So we have got as yet a nameless puppy who is here at Employsure, who we're going to presume if we put this on our intranet and so forth, that everyone will actually want to come back to the office pretty quickly. So I'd recommend it highly. He seems to be very popular in the office today and seems to be a very good return-to-work strategy or return-to-the-office strategy.

So, any of the big global landlords as well, you probably could do with getting a few of these and putting them in the foyer of your big office buildings, and people might be a bit more inclined to go back into the office. So he doesn't, I don't think, wanna hang around for the whole of the one-hour live stream and I do. So I will let him go and have a little sleep which is kind of what I'd like to be doing after my first night with him last night. It's pretty much having another baby. And I hope that that doesn't go on forever. But we'll see how we do. Right.

Let's talk first of all about JobKeeper 2.0. So you will know, and if you don't, I hope this isn't a blindside bit of news but JobKeeper 1.0, 1.5 finishes this weekend officially. For many of you it will be finishing today. It'll be the last time that you're getting the benefit of JobKeeper if you have...if you do not qualify on the basis going forward. And consequently, you'll have a number of employment relations issues coming through, including what to do with people that are currently on stand down whether you're entitled to do stand-downs going forward.

Those of you that are probably ahead of the game, we'll have some grip on whether you're going to continue getting JobKeeper 2.0, whether you're a legacy employer, what your rights and obligations are, and I'll answer questions today on that going through what the stand down and JobKeeper enabling directions rules are before we go into specific questions a bit later in the session. I would say this, that we've got a great information resource on our website. If you click on there, and you'll find that there's a really, I've just been using it myself actually, just to really break down into stages using quite a clear flowchart the different stages of looking at JobKeeper enabled directions. The thing that really worries me at the moment is this, is the businesses that are under a lot of pressure and we all are at the moment.

And maybe either deferring or they didn't know they needed to have some difficult conversations over the last few days. It's a bit of a...that's the dog not anyone [inaudible00:03:28.400] working for Employsure, I hope. That they haven't deferred those conversations and consequently find yourself in a position where you're going to wind up having to bring people back, potentially making redundancies, and consequently having to pay wages during that period where you really should have done it at an earlier stage under JobKeeper 1.0.

But we can talk about those sorts of things today. They're pretty sort of lengthy. The rules so...and the rules are out by the way and they're detailed if you go onto our website in the handy guide that's on there. Just check what the link is. It's employsure.com.au/

Male: Coronavirus.

Ed: Coronavirus, but yeah, that seems like a fairly logical thing to call it in this circumstances. So the employsure.com.au/coronavirus. Just go and have a look there. Those materials are free for you to download and use, again, genuinely just trying to help people through this difficult period. And it is incredibly difficult to work out what your obligations are. Bear in mind that officials... Whilst JobKeeper 1.0 finishes officially on Sunday.

In reality, you can't truly tell whether you're a JobKeeper 2.0 business until at least the Monday because you've got to have had a 30% downturn based upon the September quarter. So the September quarter doesn't finish till Sunday either. So it's all pretty touch and go. You've got lots of employees to be worried about, and you'll be no doubt asking some questions about that as we go through.

So that's the JobKeeper 2.0. The second thing that I wanted to talk about was some industrial relations change. So there's been, you probably saw in the media or if you follow this tour, maybe it's me, just bear in mind this is what I do for a living. I find this stuff interesting enough to read. You might be fed up with reading about it. But basically, the government put together these committees to talk about industrial relations.

So it was this concept that everyone seemed to be getting on smashingly coming into the crisis. There was lots of collaboration pleasingly between unions, ACTU, particularly the council of trade unions, and various employer groups, and so on. And they seem to want to get, make the best of that situation and have some committees meet to talk about industrial relations reform. There was quite a lot of optimism about what could be achieved given the spirit of things going into it.

There was a big blow-up last week over the last week during which, you know, the number that blow-up seems to be this is that the Business Council of Australia, which is a peak body for big businesses, essentially, they seem to in a side room come to a bit of a side agreement with the ACTU which really frustrated other employer organizations there. I talked a bit about it last week, including the Master Builders Association. And I fully understand why. And essentially, the frustration was that the BCA and the ACTU were saying, "Look, if you are a unionized employer, and you want to enter into ABA, that should get sort of fast-tracked before the Fair Work Commission."

And the outcry was, well, you're obviously incentivizing then people that wouldn't otherwise be unionized to unionize, which employers typically don't see as a positive thing in the workplace. That's not a universal truth but it's just a general-ism, but a reality. So, yeah, so this sort of discord really set in over the week, and it seems like fairly predictably, nothing much is gonna get done.

The one thing that I'm personally and Employsure are sort of leaning on, putting its weight behind is saying that, if you look at some of the small business groups, particularly COSBOA, they said some really positive things, I think about how to simplify industrial relations, employment relations for smaller businesses. I'd urge you if you are interested in this stuff, to go on and have a look at it.

Yeah, I'm cautious about that because whilst, you know, we ideally in business should be looking forward to things like change and having a voice on them the reality is we're all a bit tired of hearing so much about change that never really occurs, and feels like it's out of our grasp anyway. But COSBOA is an organization that stands up for small business. And they're proposing a number of simplifications that are really, I can say are very much things that I would agree with.

They've got seven simplifications that they're proposing, they're looking to have what they call an all-hours rate for employees and small businesses. They want to be able to have flexible part-time work. They want clearer rules around stand-downs, clearer rules about redundancy for all small businesses rather than it being award affected, and so on. The nub of it is that the industrial nation system through the modern award system is just too confusing for small businesses.

And I would vouch for that, perhaps a bit cautiously. I might argue that Employsure as a business has grown to the extent that we have because of the confusion that everyone faces. So maybe I'll do myself out of a job by saying that we should have a much simpler system. But we receive thousands of phone calls a day from small businesses. The largest issue that we receive from small businesses even in the COVID crisis relates to how much to pay your staff.

And I just find it absolutely amazing that such a fundamental part of an employment relationship. And if you really get down to the basics of what an employment relationship it is, is that an employee promises to provide the employer with their time and skill and in response, the employer provides them with remuneration. And fundamental as you will actually pay up the right amount of remuneration. And that question is so difficult in Australia, so difficult, so many people get it wrong, as we know.

And I think for the sake of business, indeed, businesses like ours as well, we have various awards in our business. We had to be alert to the changes about people on permanent contracts working full-time hours that came through, and we've had to implement the tricky things like clocking systems for certain staff groups and so on. And it's hard, very hard for us to get right. And it is even harder for small businesses without the resources that we're now able to apply to it, and the expertise that we have to get it right.

So it's just a bit of a round-robin. The reality is none of these changes are anywhere near taking effect. So you might say, "Well, stuff it, tell me when they're on the cusp and get back to me." But if you are interested in having a voice about it, then that there be a good place to start as a small business would be to look on the COSBOA website and look at that and see if you're interested in lending your support to that. That's where I'd suggest you put it.

So next one was return-to-work strategy. So I've seen in the media this week, a bit of a change in narrative about office-based businesses, and how over the last few months there's been lots of talk about you know, the world will never be the same again. People are gonna work from home. Now pleased to see the narrative is changing slightly. There was quite a good example of it. I think, in that, I think the head of some section of Google came out and said, "We should get people back into the office."

Now bear in mind that Google was one of the pinups for kind of forward-thinking companies in the midst of the crisis, said no one has to turn up in our workplaces until 2022, or something, some huge commitment like that. So they seem to now be contradicting what they were saying before. And I think more and more over the coming weeks you're gonna see people realize that actually whatever the benefits are of working from home for people, there is also a downside, and we need to be very real about that.

And that downside, as we've talked about before, is a downside in concepts of collaboration and productivity, which I saw in one media article referred to as being a bit woolly, so you can't really pin those things down. To be honest, if you can't pin down what your productivity measures are in your business, you probably should start thinking about that. You know, we're very clear here on what equals productivity. If you've really got woolly concepts of that, then as a small business, you may well be wasting money on your staff and resources, and you need to be thinking about defining your productivity metrics.

So it shouldn't be woolly. You should be able to understand clearly about whether someone is more or less productive from home. Things that do seem a bit woolier are things like the ability to collaborate and have ad-hoc conversations with people. I also really worry in the workplace, particularly as your workplaces scale, where you have layers of management, that ultimately young people learn to become managers by watching how other people do the job.

You can have all sorts of formal training and so on but people tend to learn through the inspiration of seeing others do it. And so much of management and also leadership is really hard to pin down or write down. It's in the way someone characterizes their behaviors, the way they treat others. You can't see any of that on things like video chats in a true way. You can get it touches of it through Zoom, and so on but it's nothing like the reality of that. So what you don't want is a dearth of succession resources in your business because you've decided that everyone should just stay at home forever.

There's a second reason for it, which is actually I think you'll find that as the tide turns and people start talking about coming back to the office more and more, I think your employees will increasingly want to do it. And so I read some analysis on this that suggested that only three months ago only 10% of people wanted to work at the office or thought, I think it was that they thought it was safe to do so. Now 50% or 60% do.

So there's a big swing in sentiment there as to whether people are gonna work from the office or not. And I think that's only gonna continue. I get quite riled up when I pick up something like the Financial Review and it has, you know, the clichéd CEO of a big listed company sitting there in a mahogany-lined home office, saying, "This is great. I've really enjoyed spending more time at home. And I've got to see my family in ways that I didn't previously," and things like that.

It's all very well if you have a big mahogany-lined office. But the reality is for most people, that's not the case. And I think that you need to be very careful with your staff to try and empathize to whatever their personal situations are. I know for me when I tried to work from home, I find it very... Both my wife and I tried to do it. We don't have the space to have separate rooms to do that.

The kids realize we're at home when they get back from school, and makes it very hard to work from anything from about 3:00 p.m. onwards and people are in varying degrees of that situation. And I think you'll find that increasingly people want to come back into the workplace, at least on some form of new flexible basis, which is what we're using here. And I'm happy to talk to that if people are interested in understanding those sorts of policies and how they apply them in their workplace.

The final reason in which I talked about last week is the cost of work from home. There was an article in the Financial Review this week that suggested that people on average spent $450, on setting up their work from home. And I talked last week about the fact that really that there's a question mark, in my mind about who pays for that. That money, there's money that's already been spent typically.

I was speaking to a relative of mine who works at Google the other day, and I was asking them about their setup. And they said, "Oh, yeah, just expensive, expensive." Now that's all very well for Google to do. But in small business land, if someone starts coming and knocking on your door with $450 expenses, and say, "Well, that's gonna get a chair and a desk. And I only did that because you told me I had to work from home."

And so there is a risk that you're going to end up with this very hefty hidden expense for work from home, which worries me going forward for small business. There's all expenses to get people back to work as well. Aside from puppies we're having to do various things here. We've just, and I have to say it was worth it. It was a very bitter pill for me to swallow as an MD, but I just signed up a whopping sum of money that to go on putting up plastic screens in various places around our office, which I've no idea if they've got any epidemiological benefit, to be honest.

I'm no scientist. Yeah, and this seems slightly spurious. But what is important with it is that people feel safe coming back to work. That's why we're doing it. We're not doing it, because we think we're scientists, and that's gonna solve the problem. We want to give people an environment that they feel safe coming back to, because the alternative to that is, instead of bringing people back in with carrots and start using sticks, which is not very productive to a workplace culture.

So you may have some questions about that and we'll talk about that in a moment. The last thing is talking of that, then communication. And I did it really interesting. I was invited to do a podcast yesterday. And it was asked quite a bit about how we've communicated through the crisis of which we talked about historically on here quite a bit.

And a couple of other people have asked this a bit as well. And I still speak to our business every day. And I've now recently gone to a very strict routine as to how I do that to try and give people a familiarity through the crisis. And a few people said, "Well, you know, when are you gonna stop that? When are you gonna?" And the answer to that is when it doesn't seem necessary anymore because people don't need the information.

Wonders of technology mean that I can see how many people are reading, and listening, and clicking open on emails and so forth, which tells me if people are still needing communication. I'd much rather go on too long than I would too short. I'm not trying to win a popularity contest, I'm trying to communicate well with the business. And in doing that, I'm trying to be regular in the way I'm communicating.

We've all seen that even the leaders that have perhaps done brilliantly through the crisis or being the better leader through crisis, a lot of them sort of seem to run out of steam a bit and started to finish up their communications and the communication they do provide, we're never sure what it is. A lot of them seem to have a bad habit of trying to do communication at the same time as this live stream.

They have politicians trying to steal the thunder from the Employsure live stream. But the problem with that is that their communication isn't regular or consistent. Now, remember, we talked about those three C's of communication here, be clear, concise, and consistent. And I'd urge you all to make sure you're still doing that through the crisis.

This crisis is not over. Had a very sobering read last night when I was picking up on what's happening in the UK with their equivalent of JobKeeper. And the government there has just agreed to pay a large portion of employee wages for another six months on top of what they've done today.

Now, governments don't give money away for free. And the fact that they're committed to that tells me that they know something about the future. They're significantly worrying. We've had recessions before, governments never reached into his pocket to pay wages during those. So they seem to see something in the future which is far more significant than perhaps, day-to-day activities might suggest.

And I'd say the same is true in Australia. And we've got to stay true to that mantra of preparing for the worst but planning for the best. So there is my intro. We're now gonna turn to some questions if we've got any, Steve.

Steve: Ed, let's kick it off with a couple of comments. Juniper says, "Haha, very cute mascots. Very good strategy," and backed up by Sue, I'm presuming, referring to the dog as well as saying, "It should be mandatory."

Ed: It should be. Juniper is a very good name. Maybe not that manly for this little boy. But we'll have to...we've still got to think of a name. Yeah, it is a very good strategy. It's been what is known as a shameless strategy but it's a good strategy. So as you can see, it's pretty well behaved. So yeah, we're doing all right with that.

Steve: And before we launch in, our esteemed colleague has asked me to read out there's some financial questions may come through Ed, not always our area. And we do encourage people to speak to their accountants and registered tax agents, but we'll do our best based on what we know.

Ed: Well, it's been quite liberating. It means I can just totally ignore all these questions. The downside of that is a lot of finance team here with its sect, that when we were going through a JobKeeper 1.0, this gave me the opportunity as a business owner to make sure I was deep in the rules and understanding exactly what could and couldn't be done. And so, yeah, just be careful.

Guys, do take good advice on this from your accountant. Have a deep look as to whether if you're a JobKeeper business, whether you're entitled to carry on being a JobKeeper business. Whether you're a legacy business or not you'll need some advice on that.

Steve: Ed, this is from Maryland. "Hi, there. I have a worker on JobKeeper but don't have enough work for her going forward. She's a casual. Can I terminate her?"

Ed: So Maryland, job you've got a casual who's on JobKeeper so they're regular and systematic. You can because they're regular and systematic, you'd have to go through a proper dismissal process to ensure that you don't expose yourself to an unfair dismissal claim. You might say, "Well, I didn't think casuals could claim unfair dismissal." They can't typically. But what sometimes happens until this JobKeeper thing came around, there was always a risk that someone would work for you so regularly and so systematically that they could claim unfair dismissal in certain circumstances.

In essence, by applying for JobKeeper for this person, you've admitted that they may have extra rights like unfair dismissal rights. So you could just say, "You're not entitled to work here anymore." You need to go through a fair process.

Steve: Okay, good one here from Joe. "Are there any alternative tests for JobKeeper 2.0 if you have no September 19 to compare to?"

Ed: There are alternative tests. I'd say chat to your accountant. But yeah, if you're a newer business, and there are some other circumstances as well with them, you can potentially qualify through.

Steve: This one from Angela. "I have a part-timer who worked 75 hours in February, but 80.25 hours in the June month. Can I use the June month for her eligibility to receive full JobKeeper allowance? "

Ed: Sorry, say that again. Part-timer?

Steve: Part-timer worked 75 hours in February, but 80.25 hours in the June month. Can I use the June month to measure her eligibility?

Ed: Okay. I presume this is being done because of a desire to, it's less to do with eligibility. If it's someone that's actually part-time it's about when they were part-time, not how many hours they did. But if you're talking about the eligibility in terms of how many hours you can reduce them to, that's a trickier question. And it doesn't sound like even at a minimum they're doing 70 hours, it's not a question of whether they get the lower JobKeeper payment or not. So maybe it is if you're suggesting that they were getting below this the 20-hour amount, it sounds like an accounting question, unfortunately.

Steve: And this may be one too, Ed from Kristin. You might wanna let us go through the keeper, "Do we have to use the FN13 code to pay last pay for JobKeeper 1.0?"

Ed: I don't even know what that is. I'm sorry.

Steve: It had a few followers.

Ed: I'm not much used to it for anything. I've got a puppy. That's my only thing. Yeah, I don't unfortunately, yeah, can't help with that.

Steve: Lauren, "Hi, Ed. We will be eligible for JobKeeper 2.0. And although things are stable enough at the moment, we're prepared for more unexpected surprises. So just so I'm sure under the new rules, would I still be able to stand down my staff if I absolutely have to?"

Ed: So that the under the new rules with... Sorry, who was that for?

Steve: Lauren.

Ed: And does she...she says she is eligible for 2.0?

Steve: We will be eligible.

Ed: Yeah. So you still have the stand down rules. And there I'd urge you to have a look at the fact sheet and the flowchart that's on that fact sheet on our website. So yes, you can. In essence, you've got to bring them back from whatever the stand down they're on at the moment to do it again, making sure you comply with the requisite notice requirements and so on. But just have a look at that fact sheet. It really steps you through it stage by stage, and you'll get a decent sense as to what you need to do.

Steve: Okay. Ed, this is from Peter. And clearly, he was tuned in last week because it was apropos of a comment you made. He says, "Like you, I wasn't invited to the Talk Fest in Canberra either. Why doesn't the government ask us to get involved? What they're proposing does actually impact us."

Ed: It does, doesn't it? I mean, it's been always been a problem with small business. Because we're such a disparate group of people with quite often with quite disparate interests. On this case, I think that there's actually a lot that we share common ground on. But collectively, small business employs more people in Australia than anyone else. So you would think that the voice of small business should be therefore much louder.

Unfortunately, it's very difficult to coordinate all of those voices, which is why you know, I think we could have added some value in explaining exactly what we see as an organization that has 27,000 client members. And not only that, but you're calling us every day about the things that trouble you at work. You know, I've mentioned a few times on here, what I perceived to be the state of how things are going out there in the economy.

And that's not because I'm an economic expert or anything like that, but I do genuinely think as small businesses you're much more likely to, for example, make someone redundant than you are to default on a loan. And what we're hearing about here is how many people are getting made redundant day-to-day. And that seems to me to be a leading indicator on how things like JobKeeper are going and so forth.

But no one seemed bothered to ask that either. So the only thing I can say is that I've been pretty busy over the last few months. So I'm not sure I would have had the time for Talk Fest down in Canberra, though, it would have been nice to be able to contribute part of small business.

Steve: Ed, this one from Kylie and it's related to a comment you made in your opening stanza. "Ed, I had a one-on-one with an employee working from home this week and she asked about her home internet use and whether our business will be helping contribute to the cost. She hasn't put in a formal request as yet but I think it's coming. I think we should cover legitimate business use, but I don't much like the idea of paying her for Netflix streaming. Any advice?"

Ed: It's difficult Kylie, isn't it? I sort of feel like I'm sort of saying this in a bit of an echo chamber at the moment. We've looked at it very carefully here for our staff, and I'll give you an insight as to what we're doing to try and belt and brace this process. So I think during the crisis where everyone was forced home, there was a lot of sort of goodwill that went on where employees were willing to use what was otherwise already available to them.

And what we did, for example, if someone said that they wasn't available, or there wasn't a good enough service, whatever. Rather than saying, "I'll go and upgrade your service," we are giving people 4G dongles, and things like that. So as our starting point, we shouldn't have too many circumstances where someone can legitimately say, "I have an expense that I didn't already have." But then what we've done is second to that and said, "Okay, from a certain point forward and we're just going through the process of doing it now, from a certain point forward we are having a new flexible work policy where you can agree with your direct manager here, the prospect of working from home some or all of the time.

Now, in those circumstances, we are saying that that is at your election. And in essence, what we are doing is providing you with your workplace here. If you choose not to use that and would rather use your own workplace then that's a matter for you but you can't do it unless you're able to be in a workplace at home which is health and safety friendly. Now that is a form of belt and braces.

It's a world that's pretty untested, to be honest. There's always a risk that people say, "Well, hang on a second. You say that I'm choosing to work from home but ultimately you're agreeing to it, and there's a risk that you end up with problems as a result of that.

Steve: Thanks, Ed. This from Sue, she says, "Under JobKeeper 2.0 is the less than 20 hours per week rule actually less than 40 hours per fortnight? What happens if one fortnight is, say 30 hours and next fortnight is, say 42 hours, as this could mean that the top-up is $750 and the next is $1200?"

Ed: Yeah, spot on. So it's measured at a particular point in time. So have a look at the fact sheet on our website. And you'll find that a useful way of working through the challenge in assessing that.

Steve: Yeah. This one from Sarah, "Does the JobKeeper 1.0 just automatically stop or do we need to formally notify the OTO that we're not applying for JobKeeper 2.0?"

Ed: It will just automatically stop. There's no notification process to say, "I'm not 2.0."

Steve: From John, he says, "Hi, Ed. Redundancies may be unavoidable for us. What is the "at-risk" process? Is this a meeting I need to have with the employees or something I can do independently as a business owner without their input?"

Ed: So the concept of an at-risk meeting or notification is that you should be telling your employees that they are at-risk of redundancy before you do that, and this is something I suppose as employment relations people we don't always talk about is that, you've got to go through some mechanics to understand whether redundancy is the right thing for you. It's not always and you've got to be careful not to throw the baby out with the bathwater, in that redundancy does cost money regardless of whether you are a business that...or your staff are, things like they don't have the service to claim redundancy, will be entitled to redundancy, I should say.

It still cost money. You still got to pay people at notice, you've got to pay them any accrued leave, and all those sorts of things. So it's not always the cheapest option. So redundancy tends to be a medium-term solution. If you're saying in the medium term, I cannot see this work returning, whatever it might be. You need to slice and dice that in terms of your financial modeling for your business.

I can't tell you as an individual business owner how to do it but do go through the exercise looking at that. That will create a scenario which you've decided that maybe you're gonna make people redundant. And you should then notify any people that may be redundant that they are at-risk. Now depending on the size of your business, you might do it to everyone. In slightly bigger businesses, I tend to say don't do that because it can spook the horses a bit. You'd only be talking to the people that might be at-risk of redundancy.

And remember, you're making roles redundant, not people. And so if you've got two people in the same role, you wouldn't just notify one person and say you're at-risk of redundancy. You need to say to both of them, your role is at-risk and redundancy. It looks likely that one of you will be made redundant. Then from the at-risk process, you go to the next stage, which is consultation and actually sitting down going through with each of those people individually in my example, and asking them whether they have any suggestions as to alternatives for redundancy.

Listening to them, being as open-minded as possibly can be about their possible responses. I always think it's, as we've talked about on here before, it's hard for employers in that situation. See employees in reality don't...they don't have the transparency that the employer has as to what's really financially going on in the business. They're not sitting in the, so-to-speak, the director's box in the stadium, so they don't have the perspective that often a business owner can have.

And then after that, you would select if there was no alternative to redundancy that was reasonable, you would end up selecting in my example, one of the people see if they can be redeployed elsewhere in business and if they can't you'd move forward to redundancy. So very long answer to the question of the at-risk piece. At-risk ultimately refers to a notification to the employees. But there is a separate part prior to that at which you would determine whether you need to enter into that redundancy process.

Steve: Thanks, Ed. From Michael, he asks, "How do voluntary redundancies differ to the regular kind? Is this a feasible option for a business? I have 20 employees."

Ed: Yeah, so voluntary redundancies certainly are a feasible option. They normally come at a slight premium. And by that, I mean, this is that you would normally elect, this is where they can be risky as well. You would normally say to, let's say you have a category of role in your business. You've got 20 employees, let's say five people are doing that role but going forward, you think you only need three, voluntary redundancy would normally involve you going to the group of five and saying, "I'm looking to see if two people are willing to leave on a voluntary basis without having to go through a formal selection process."

And in order to incentivize that you might add something on top of what would be their redundancy entitlement. And that's how it worked typically. And the problem with voluntary redundancy situations in those cases is that quite often if you just won't go in with a truly voluntary scenario, the most likely people to put their hand up are those that are gonna get paid most on a redundancy. So it can actually end up costing the business quite a lot of money.

They might not be the same people that will get selected. It might be your most experienced people, for example, they've been there longest therefore get the biggest redundancy payouts may turn around and say, "I'll take the voluntary package, please." So you just got to be a bit careful that you don't end up scoring own goals with it. But in essence, a voluntary redundancy just refers to a period before going into that more tricky situation, during which you ask to see if anyone wants to put their hand up to go based on the at-risk scenario.

Steve: Ed, this from Jenny. "Can I outline a specific amount of home internet use that we will pay for in an official working from home policy?"

Ed: Oh, you could do Jenny, it's a good idea. You can potentially put something in a policy which says that you will pay the odds over and above any usage that they were already paying or any fee that they were already paying. If people have got specific there's a specific way of measuring how much usage is gonna be attributed to your work, you could do that. There are all possible things that you could look at, yeah.

Steve: And, Ed, again, regarding working from home this one from Paul, "If a staff member goes and purchases some of their own office furniture that we pay for, does that mean that we own it if they leave the business? And also how can we check that it is ergonomically correct?"

Ed: Really, really good questions, Paul. This is the sort of stuff that keeps me up at night, aside from the puppy that also now keeps me up at night. So we have a situation here, for example, when we sent people home, a lot of people were saying, a lot of the back end now we were saying, look, I don't have...we didn't have everyone on laptops, for example, we had a lot of people that run stationary PCs in the workplace. So we sent them home with that equipment and we have screens and things like that.

Other people on laptops wanted screens on top of the laptops and so on. So we sent out a lot of equipment that was definitely ours, so there was no doubt about that. And you try and mitigate against that by essentially sending people out on a cheat where you're getting a pre-agreement that if it's certain circumstances that that equipment's damaged or not returned, that you're authorized to make deductions from their wages.

So you can't just ad-hoc deduct money from someone's wages because they've broken or lost something that's yours. But if you get pre-agreement to it, you potentially can. So those are the sort of things you put in place. If you've then actually allowed people to either expense you or you've paid for things like office chairs, and so on, the same sort of thing applies, because if it is very hard in circumstances to actually recover that stuff.

So you want to look at having some form of agreement in place for anything that is truly yours. Then on the flip side of that, if you haven't actually paid for that stuff, the risk is other people have gone out and paid for it. And then as we've highlighted on here, if you don't have a clear policy about that you end up being asked to pay them back.

Just on the question of risk, the... So you can do risk assessments in a couple of ways. You can ask people to complete risk assessments virtually or we actually offer it as a service to our clients where we'll do virtual risk assessments through Zoom or you might ask them to do it through a desktop assessment, essentially looking at questions and a list that they'll provide answers to. Then finally, you can actually go visit the site to check that it's a safe work site. So there are three ways to do it. You don't actually have to go to the site to do it.

Steve: And, Ed, you've touched on this before but worth revisiting this time from Michelle. "Do we need to get staff to resign a nomination form for JobKeeper 2.0?"

Ed: I believe that you do need to be re-nominated but check with your accountant as well.

Steve: This from, Dan, "What would happen if an employee is registered for tier 1 and does not fulfill the 40 hours required for the fortnight. Can they be moved to tier 2?" Do you understand?

Ed: Yeah, I do. So the assessment is done based on a snapshot in time rather than on actual hours worked. So have a check of that.

Steve: This from... "If staffing in a role is to be reduced is there a guideline to decide which staff is to be made redundant? E.g. like the most junior in the role, etc.?"

Ed: The guideline, I suppose is the legislative framework. It's interesting in hearing. One, I'm quite relieved I can answer some of these questions. Some of them are ultimately these JobKeeper financial questions that you need to ask your accountant. But redundancy seems to be my sweet spot today. And it doesn't surprise me that a lot of people are having questions around this.

But if you have to go through a selection process, so the first part of it is a business question, which is you need to examine your business and the work that needs to be done. And look at whether there are any specific roles that are, therefore, gonna be made redundant. So it's not just simply don't just look at all employees and say, "How do I run out cost? Who's the cheapest or most expensive?"

And the reason you don't do that is because the framework that you're asking about is the legal framework. And there's always a risk with applying very broad brushes to groups of people like I will get rid of the last person in, you end up with things like discrimination claims. That person's likely to be younger, they can potentially claim that they were discriminated against on the basis of their age, because you picked on them, and not the older people, those sorts of things that can occur if you get it wrong.

I think actually, I saw something in the paper this week about one, I think BHP or RIO who was getting sued for the way in which they applied big broad brushes during JobKeeper. And it's alleged that they're therefore discriminating against people. So you've just got to remember that you're making roles, redundant, not people.

And if you've got a particular role or roles that are potentially being made redundant, and you've got more than one person in that role, you might have to select a person in which case you would apply as far as you possibly can an objective criteria to working out whether one person should be kept ahead of the other. And that might include things like their performance reviews, it might factor in things like attendance, but even that's quite risky because you've got people that, someone has legitimately taken absence under the Fair Work Act if you ended up treating them negatively because they had taken sick leave, for example, you could be sued for that.

Steve: This is from Mary. "We have a person starting with the business next week. At what point would they be eligible for JobKeeper 2.0?"

Ed: So Mary, check the rules or your accountant on eligibility dates, but I don't think they would be, unfortunately.

Steve: And, Ed, this one from Sally. "If a company is sold, can current JobKeeper eligible employees remain on JobKeeper?"

Ed: There are certain circumstances again a bit of a financial one that one so there are circumstances in which...even if the company is sold they can carry on on JobKeeper.

Steve: Time for one more?

Ed: Time for one more.

Steve: From Tony, a client. "Always thankful for you sharing what you know. It is a big help. We have an employee recruited on the 22nd, June 2020 and became an eligible employee under JobKeeper 1.5. What period would we use to calculate hours worked for their eligibility under JobKeeper 2.0? I'm reading it is Feb and June. And if it is June for this employee, there's only one week's worth of hours. I could be misinterpreting the periods to use though."

Ed: I feel a bit bad. Tony's just said thanks for help and I'm gonna not help now or her. I'm not sure which but that's an eligibility question really is an accountant's question first and foremost. But we can help Tony with the employment relations aspects of that.

Steve: And a nice comment from Alicia. She says for work from home expenses, we have resolved the question of office expenses by agreeing a dialing up. This covers portion of internet, printer ink, incidentals, etc., etc.

Ed: Good, it's a good idea. The underlying theme for what this is, make sure you sort it out. Don't just bury your head in the sand. And so often my advice on any employment relations issue is actually, this is fairly shameless, [inaudible 00:44:52] to try and... and obviously trying to get more likes towards the end of this just by having a bit of puppy time. But let's yeah. So make sure you're getting policies written up is the short answer. You just don't wanna ignore this as an issue, particularly if you are saying, "Going forward on some level of permanency I'm gonna have more and more people working from home." Get a grip on those issues.

Steve: And finally, Ed, this comment and I can say hand on heart, it's absolutely genuine. Ed, you need to update your photo on the Coronavirus hub. You're much better looking than when that photo was taken.

Ed: That's I think a compliment. Right back at you, Steve. I can see Wayne is asking whether the puppy is in fact you. So, take that as you will as to what Wayne thinks you add to the scenario.

Steve: Shall do. I'll sleep on that on Ed. Thank you.

Ed: Yeah. All right. Well, thanks, guys. We'll see you next week.

Fridays With Ed Live Stream - 18th September 2020

In today's session of Friday's With Ed, topics covered included updates from inside Employsure, an insight into the world of workplace relations updates, including wage theft in the news, and successful crisis management during COVID-19.

Fridays With Ed | Leading Through COVID-19
51:17
[00:00:00.419]
Ed: Hi, everyone, Ed here, checking in for our Friday session. I'm sorry that there was a gap in sessions last week. I was away on holiday. I snuck away for a long weekend. Very nice to be able to do so. But I'm sorry for, that meaning that this got interrupted. It just seemed a bit weird going on a bit of a break in the midst of the crisis. But I think probably, maybe I'm just trying to assuage my guilt about it that we as leaders need to make sure that we're resting up. Poor Dan Andrew is down in Victoria. Looks like he's about to keel over any second. So, if anyone needed a long weekend, I think he probably does. But anyway, that's not why I'm here to waffle on about. I'm feeling a bit ranty today, ranty. That was with the tea, not with anything else. Don't worry, anyone that was concerned about that. And I'm going... And the reason I'm ranty is because there are various things that are annoying me that have come out through the media this week about Workplace Relations, I'm gonna update you on. So I'm gonna go through those things. We're gonna talk a little bit about JobKeeper 2.0. So this time next week, we're gonna come to the end of JobKeeper 1.5, as we've been calling it and move into JobKeeper 2.0. It's a bit of a chat about that. Finally, I'm gonna talk about this thing that you might be reading about called the K-shaped recovery, which doesn't sound like it's much good news for small business. And I'll explain what I understand of that and what I'm saying. Before I do, just a reminder of why we do this session, I suppose to try and get some alignment on it and give it some purpose.

[00:01:41.127]
Hopefully, what we're doing is providing you with some insights from inside a business as much as anything, how things are going here, what I'm seeing, how I'm managing the crisis here. Hopefully, that's useful, even if it's just so you can see how much better you are than me at managing your business. And you perhaps get some comfort out of that. And the second is to do a bit of what we do professionally, which is Workplace Relations, and to give you some insights and updates into what's happening in the world of Workplace Relations. Couple of updates this week, around, for example, the concept of wage theft that I'm gonna go through, then finally, it helps me. So there really is a purpose to this for me. It keeps me on top of the media to make sure that I'm reading all the right articles. I need to understand what's going on in my business. But it also gives me a point of focus in the week, which enables me to stay true to the mission that we're on at Employsure to work our way through the crisis with success and to ensure that we come out successfully on the other side.

[00:02:53.644]
So, that's a bit about why we're doing it, just to keep me on track. And I'm gonna move swiftly on then to wage theft, which has gotta be one of the most offensive terms that have come out in corporate-speak in recent years, I think. So, the worrying thing about this concept of wage theft is it's no longer a throwaway comment used by journalists and so forth in the media about the concepts of underpayment. It's now become law, not just in one state Victoria, but now too in Queensland, that businesses, employers can be prosecuted for what is called wage theft with the prospect of a maximum of 10 years of jail time if they're found to be the thieves, which, it really disturbs me because when you read the media on this, and actually even if you go behind the media on it, which, you know, they've gotta sell papers ultimately, so it might be a bit prone to embellishing things.

[00:03:52.573]
But actually, if you look at the commentary from the state politicians in Queensland, the relevant ministers on Grace in Queensland, and what she said on that was a couple of things that were just totally... It was like taking a plug socket from one country and trying to shove a plug-in from another country. It just didn't fit. So she's justifying this concept of a wage theft law in Queensland. And she says, "The reason I need to do it is that," she says, "one in four Queenslanders are being ripped off, are subject to wage theft." I just don't think that that's a true number to suggest that 25% of Queenslanders are having money ripped off from them. Bear in mind, less than 25% of Queenslanders work in the first place, but that's true of all states. No offense to any Queenslanders before you jump on. I'm not suggesting you're not hard-working types. It's just that the reality is less than 25% of people work in an economy. But even if you just look at the working people, there's no way 25% of people are being ripped off. Now there may be a case to argue that 25% of people are getting underpaid by the confusion caused by the very confusing set of modern awards that we're all subject to. But it does suggest that those 25% of people and therefore, a huge volume of employers, presumably 25% of employers are thieves is just an awful thing to say, frankly. And it really undermines I think, the hard work that employers do day to day to create ultimately and support the economic success for our country. And I just wanna give you a bit of an insight then is to... So there's that hop, skip, and a jump. She says we need wage theft laws because 25% of people getting ripped off. No, they're not. You're fibbing. So you then get into the next thing that gets quoted, which is, "Look at how bad things are."

[00:05:49.792]
The FWO went after the restaurant industry, just before the pandemic, and it found that they looked at 1,351 companies, restaurant businesses, and they had been underpaying to the tune of 1.2 million. Glorious headline, $1.2 million of people being ripped off. It's terrible, isn't it? I'm just gonna go through a very brief exercise to make my point here with my big calculator. Many of you may not see one of these before. If you just use your phones and so forth, these days, I still hang out with my old fashion calculator. But if I do $1.2 million, and I divide that... Let me just check my math is correct by what the 1,351 businesses. That means each business on average is underpaid $888. So it doesn't sound great, initially. Let's divide that by let's say five employees in each business. So let's assume they're all pretty small businesses, they're probably gonna be bigger than that, to be honest, as restaurant businesses, but let's say 5, that means $177 per employee. On average, let's say the employees in that workplace work for them for a couple of years. That gives you $88 per year per employee, divided by a week gives you $1.7 per week per employee. Now, I think it's absolutely shambolic that a government would gauge itself, which ultimately is just political point-scoring in the idea of calling small businesses thieves, when no one's trying to cut the corner of $1.7 per week, not even per hour, per week per employee to make more money. The reality is they're doing it because it's so bloody hard to administrate wages in Australia because the award system is so bloody complex, that people make errors. And we see the errors in Woolworths and Westpac recently, and huge businesses that yes, should know better and should have the systems in place to know better, but the reason they fail is because it's so bloody hard.

[00:08:00.576]
There is no one sitting in a Westpac boardroom or a Woolworth's boardroom saying, "You know what guys? I have worked out a way how we can get our profits up this year. Let's screw the little guy and not pay him his minimum wage." It just doesn't happen. But instead, these governments have rushed through a bit of some political posturing, which we all know in Queensland, it's pretty prevalent at the moment in order to start sort of stigmatizing small businesses. And I find it really bloody insulting, as you can tell from my tone. But the idea is small business owners could face 10 years in jail because they're trying to do the right thing in a system that's so hard. All it does is dissuade people from running small businesses. Why on earth would you go into small business? We all know that running a small business... We might have thought when we got into it that we were all gonna become millionaires by running small businesses, but the reality is small business owners aren't millionaires and not people that are out rotting systems. They're trying to make ends meet and quite often are not paying themselves minimum wage because they're simply having to try and make ends meet for their employees. So I find it pretty bloody insulting that that's the tone of the political debate at the moment. And that political debate goes into the reforms meant to be going along at the moment. There's all these sort of secret committees, which is never particularly been having no idea why Christine Porter set up these secret committees. No one really knows who's in them. We don't know who's meant to be discussing our future as employers.

[00:09:30.455]
I've certainly not been asked as an employer whether I've got any views on it, which is a bit odd, if you bear in mind, I'm not only an employer of 900 plus people, but we've got 27,000 small business clients who have very real views about what's going on in the employment world. But what we saw this week was there was a big blow-up great surprise. I predicted on here, like, some sort of Workplace Relations [inaudible 00:10:00]. I'm gonna claim... I predicted on here that these discussions would go nowhere and fairly predictably, they haven't. What has happened is there's been this enormous amount of focus on these things called Enterprise Bargaining Agreements, to which I think if you're watching this as a small business owner, you may have heard of that have really got no relevance to you. About 10% of businesses use enterprise bargaining. If you're a small business in the construction industry, you might be tied into one by a worksite agreement. But in reality, most small businesses don't use enterprise bargaining, but they spent oodles of time discussing how they can improve enterprise bargaining. And what has come out in the last 24, 48 hours is that it seems that the ACTU has been trying to further its nest really, and what they have proposed and they've somehow managed to get the Business Council Australia to support this. Remember, Business Council Australia is just a big business thing, really. It doesn't really affect us as small business owners. But big business representative has said, "You know what? Let's set up an enterprise bargaining system where things are done more quickly and efficiently if you're a union member," which fairly logically would lead to an increased amount of union membership, feathering as I say, the nest of the ACTU.

[00:11:20.656]
And I get this slightly ridiculous thing to suggest, given that only 10% of the private workforce is a member of a union, a tiny number of people are union members. So, again, that would be heavily distorted by things like construction. Outside of construction, a tiny, tiny fraction of businesses, private businesses, private employers would have union membership in their workplaces. So the idea that all of those people who are actually the ones who have less access to legal help, and so forth, should not get the benefit of the same things as the bigger businesses and less their staff of union members. It's just an awful thing, really. It's just a fairly transparent attempt to increase union membership, which in a modern world would be probably the only OECD economy where you'd be seeing union membership increase. That's just not the way things are going. So in response to that, the Master Builders Association who represent a number of building businesses, so they represent about 30,000 building businesses, about the same number that Employsure represents in small businesses across sectors. They got invited to these committees, I didn't. I'm just saying, but I'm a bit bitter about that. I feel like I'm not being invited to someone's wedding or something. But they got invited, but they did what I would have done anyway, which is they walked out in response to the suggestion that there should be this two-tier system. And I think it was a very reasonable thing for them to do on behalf of their small business members who would have been outraged at the way these conversations going or outraged. I feel like there's a shock jock just giving outrageous outrage and anger today, lots of anger.

[00:13:03.905]
So, less anger on this one, JobKeeper. 2.0. End of next week is the end of JobKeeper 1.0. So, you should be getting your house in order to work out. And when you can't really work out the JobKeeper 2.0 with complete accuracy X. You've gotta measure to the end of September quarter as to whether you are eligible on the downturn test. Talk to your accountant about that. I'm not an accountant. Speak to your accountant about whether you are eligible for JobKeeper 2.0. But even if you don't qualify for 2.0, chat to your accountant about whether you've had the requisite 10% downturn to become what they call a legacy employer. And I'll come back to why that's important in a moment. So if you are JobKeeper 2.0 eligible, you've gotta satisfy the wage condition by the end of October. Remember, that means making sure that your employees are paid at least the amount that they would be entitled to under JobKeeper, either for work that they are doing for you or on the basis that they stood down. But there are two types of employees, those who have less than 20 hours are on $750 at this stage of JobKeeper 2.0, $750 fortnight versus $1,200 a fortnight for everyone else.

[00:14:26.768]
So talk to your accountant about that, talk to organizations like us about whether your employees satisfy employment tests, for example, is on a regular and systematic casual. I don't think that's the sort of advice you should be asking your accountants for with respect to them. That's not their area of expertise. And I can answer some questions about that in due course. And then beyond that, make sure you're checking the employment issues that flow from JobKeeper 2.0. So remember, one of the things before JobKeeper 2.0 got legislated was that everyone was quite scared of this sort of what they called, I think a JobKeeper cliff.

[00:15:05.846]
The subsidy is stopping. And suddenly people are not having the money to employ the people that they had on JobKeeper. And suddenly, they're being a ton of redundancies, and so forth. And the government's obviously put this in place to try and prevent that cliff occurring. However, because the test has changed, there are gonna be a number of businesses who are coming to an end of JobKeeper now. If you are one of those businesses, you should have already considered whether you need to reshape your workforce, restructure your workforce, and look at redundancies. You're too late to be honest if you haven't because any process now is gonna take more than the following week. So you're gonna have the costs going outside the boundaries of JobKeeper, of going through processes relating to that.

[00:15:48.153]
So I hope that you haven't had your head stuck in the sand on that. But if you have, I'm not gonna judge you on here, just ask the questions, and I'll see what I can do. But if you're not a JobKeeper 2.0 business, but you are a legacy business or you've suffered a 10% downturn in the September quarter, then you're still gonna have the ability to do certain forms of stand down, changing in hours and so forth for your staff. And that's important for two reasons. One, it gives you continued flexibility, which means even if you're not getting the subsidy, it might be that you can reduce the hours of your staff. You can only do that importantly as the legacy employer down to 60% of their usual hours, as they were at the beginning of March. And what you can't do is call someone in to do less than two hours work a day.

[00:16:46.189]
Importantly, if they are currently on some form of stand down, you basically need to renew that stand down. You need to do it again and you need to provide seven days' notice of that. So, remember, it's only seven days, as from Monday, the JobKeeper 2.0 kicks off on. So you need to be thinking that you're getting these notices out Monday, and we're getting a lot of calls for clients today who are needing to understand how to renew or refresh their JobKeeper 2.0 directions if they are a legacy employer and so on. So, you talk a lot more quickly when you're angry. You know, I'm not really flying through it. I thought I had loads to say but apparently don't. So yeah, be very aware of this legacy point and what is happening with your staff as we come to the end of JobKeeper 1.0. Just can't sit there and think, "Well, they were on stand down and they can carry on stand down." That's not the case. It's much more complex than that. And we'll go through it in a moment.

[00:17:47.704]
So final thing for me before we go on to some questions is this concept of trying to get on here on a K-shaped recovery. And what it's meant to mean is this, I think is that we came into the crisis in a certain direction. And there are basically three routes out of the crisis. There is up, there is down, and then there is out. And what the narrative in the media is, is a worry there's an increasing concept of a K-shaped recovery in that there are certain businesses flying as a result of the crisis. Some of those are small businesses but what they're pointing to particularly is tech-based businesses that were already in strong positions to expand upon the technology they use in their business. So, classically, the biggest one out of the crisis is probably Zoom, that people are saying, like, the circumstances have just created this amazing growth story for them. And these big tech unicorns as they're sometimes called are just only getting bigger and bigger as time goes on.

[00:18:54.585]
Amazon has also been a benefactor of the crisis. As I say, some small businesses, those particularly that had certain business models suited the crisis better, perhaps were already doing a lot of that transactional work online and so forth, have done well. I can think, for example, a classic one, things like retailers of gym equipment or retailers of bikes were a classic one that really did well out of the crisis. Then you've got, so I said, there's up, which is those and there's down, which is I suppose most other businesses. You know, I'd count myself probably somewhere near this group in that, look, I wouldn't ask for the crisis. Again, I think we've been very fortunate in that what we do is very relevant to people at this time. But it doesn't change the fact that we ultimately have a client base of small businesses of 27,000 small businesses who are paying us money. And the problem that we foresee is that those clients are not able to carry on doing that because they're going out of business, whatever it might be. And that's not a good thing for us.

[00:20:04.376]
So things have been okay for us, but there are other businesses that will have undoubtedly suffered downturns, but will survive through this crisis. And then the out strand of the K is the risk of small businesses going out of business particularly. And the narrative in the media is that this is increasingly becoming a K-shaped recovery, with that, meaning that small businesses are under real risk. And I don't want to understate that. There are certainly risks. And, you know, I'm saddened as anyone is when you see shops, particularly in areas like CBD, that just not seeing the point in opening, again, because people's working behaviors are changing and so forth. But what I am seeing to give any comfort on an economic level. And I think that we're really a good bellwether of this, because of our scale in terms of the number of small businesses that we work with, across so many different industries.

[00:21:03.364]
But we are not saying yet, and I stress the yet, maybe JopKeeper is supporting this, maybe we will keep an eye on it over the next few weeks ourselves. What we tend to see during this crisis is that where there's a dramatic change in operating rhythm, Victoria goes into lockdown. For us, we're in New Zealand as well. When Auckland went back into a lockdown, you see a big sort of reverberation in the small business community of people saying, "I can't pay bills anymore. I've got problems." And then it settles back down once people have sort of gone out of the worrying phase, into the thinking phase, and critically look at whether they can actually do things and carry on. And what we're seeing actually is a lot of stoicism from small business, and most people are carrying on. A lot of people, as we've talked about on here have changed their business model successfully.

[00:21:54.883]
And I think that that's a necessity now. And I'm drawing on that realization as a business owner. I quarterly meet with all of my direct reports in the business and have a review with them. And a common theme that's coming out of that from them, not me, is that they're sort of saying in their quarterly review this quarter, "I don't really feel like I've done much this quarter." Now I said it's funny that isn't it in the... When I look back to what we talked about at the end of last quarter. We've just come through this intense crisis period at the end of the June quarter would have been. And we were all just sort of out of breath from how crazy it had been, and proud, and pleased that we'd sort of stood up to the fight, I suppose. And the narrative at that time was that we felt like, by this time we would be out of the crisis. And the reality is that three months later, we're not out of the crisis. We're still in the midst of it, but it's not quite as chaotic and dramatic and so forth.

[00:23:00.611]
But there is a sense of a new normal. And I think that we're all coming to the understanding that the answer to what's gonna occur is neither black nor white. We're not gonna wind up in a situation where we're heavily locked down forever, but we're not gonna be back to normal either, anytime soon. So what we're trying to do as a business and I'd urge others to do as well, just find out what our new normal is now, what we can actually expect from the business. Let's get back to where we thought we had good rhythm and routine going in to make sure that people weren't just in crisis mode all the time. But we're just working on that now. Because I think apart from anything, it's pretty exhausting to be in crisis mode all the time. We've now gotta deal with a realism that we need to be moving forward and accepting that Christmas isn't gonna be the end date of this. There isn't really an end date. It's going to be some form of evolution over time. There's not gonna be a switch that gets flicked for any of us, unfortunately, to get back to normal. So, that's it from me. Over to Stig, for... You've got new glasses, Stig. You look like you're copying me there. No, they're the same. Stig's very offended. He's far trendier than I am. And he's probably spent thousands on these trendy specs and he's just been told he's got the same Specsavers ones as me.

[00:24:25.949]

Stig: I've got a couple of pairs, I just choose one in the morning.

[00:24:29.316]

Ed: Yeah, okay. Just casual. Yeah, sure.

[00:24:30.999]

Stig: Ed, just kicking off with a couple of comments from Janai. Good on you for taking a break.

[00:24:38.419]
Ed: Thanks, Janai.

[00:24:39.632]

Stig: Richard says, [inaudible 00:24:41] of your trusty calculator, where's your Abacus?

[00:24:44.564]

Ed: I suspect there's a disproportionate amount of small business owners that's still calculator-based. There's a... I certainly see it when I speak to clients is quite often you're in a bit calculated on MDs desks, that seems to probably be a tool MDs still use in small business.

[00:25:07.143]
Stig: And as always, from a colleague, we may come across some financial questions through the course of this. It's not our area of expertise, we do encourage people to speak to their accountants and registered tax agents, as you've mentioned.

[00:25:20.051]
Ed: Who is that mysterious colleague? She appears every week,

[00:25:23.110]
Stig: Stig times 2.

[00:25:26.917]

Ed: Yeah.

[00:25:27.621]
First comment from Anita. She's a client, Hired. "I'm still unclear if a few of our casual staff who have been on stand down since March 27th, we're in the swimming industry, 100% closed, but were employed by us for the previous nine months, at the minimum, are still eligible for JobKeeper 2.0. Do they qualify for JobKeeper and do we have to put them on JobKeeper if they are still on stand down?"

[00:25:53.224]
Ed: Hi, Anita. So I think the question is, if I'm right in saying this, they weren't JobKeeper 1.0 eligible because they were casuals. You stood them down in March, that they had only worked for you for nine months at the first of March. So they weren't eligible. There hasn't been complete cloud. So the messaging from the government is that the eligibility rules are not changing for employees. We've gotta get clarification on that still. Shout out if anyone's got this clarification. I can't see it, I've looked online. But, you know, what we know is that from August forward in JobKeeper 1.0 or 1.5, as we've been calling it, the goalposts shifted to say, if you have done 12 months as a regular and systematic casual, up to the 1st of July, then you would qualify for that period. It's not clear whether that... So I can't say as I said, not clear where that eligibility rule translates since 2.0, meaning that the eligibility test is 12 months from 1st of July, which in your case, would enable those casuals to be qualified. So, first things first, speak to your accountant about whether you are eligible. Hopefully, by the time you've got the chance to do that, your accountant will be able to advise as well on whether your employees by eligibility date are eligible. We as a business can advise you whether they're really regular and systematic casuals, and therefore, whether they should be included in that pool. So I'm happy if you wanna ask more questions on here to talk about their hours and things I can give you a sense as to whether they're regular and systematic or not.

[00:27:40.836]
Stig: Makes sense. From Naomi, she also is a client. "We have employees that are unable to come into work due to current border closures. They're on JobKeeper stand down. You mentioned that we can't leave employees on JobKeeper stand down with 2.0, but they can't get to the worksite. Do they then have to use their accrued annual leave or go on to unpaid leave?"

[00:28:02.923]
Ed: So hi, Naomi, and thanks for your business. I think this is probably the Naomi that I've spoken to a couple of times on here before. Austin, is that her surname?

[00:28:14.140]
Stig: [inaudible 00:28:15]

[00:28:15.420]
Ed: So okay, that might stick for slicing the ball today. But, whatever points reveal of this. Yeah, way around, Naomi. The question there has a couple of branches to the answer. So, first of all, you need to work out whether you're a JobKeeper 2.0 company, depending on the scale of your downturn. If you are, you have different forms of availability or different levels of access to stand down directions. So if you're not a JobKeeper 2.0 company, and you're not a legacy company at a 10% downturn in September quarter, then you don't have those stand down rights anymore. So, basically, you would have an employee who is not able to do their job, assuming they physically need to be with you to do their job. If that is the case, then you go down the pathway of needing to terminate their contract with them on the grounds of what sometimes lawyers call frustration, which is probably quite an apt term. It's frustrating that you can't basically execute the contract, the deal between you and the employer. If you're a legacy employer, and they weren't able to come across the border at all, and therefore still couldn't do zero hours, you've got a similar problem in that... That means you're only allowed to reduce their hours down by 60%. So in essence, you'd still be at zero hours, which would mean, again, you'd have a problem that you'd need to try and work through. And, again, this is all on the presumption they need to physically be with you to work. If you are a 2.0 employer, you would be able to continue the stand down. So, it's a challenging situation for you there, Naomi, I have to say.

[00:29:57.349]
Stig: And this from Karen. She's a client from Crofts hired just to confirm, again, even if an employee is currently on unpaid parental leave, they would still be entitled to the full JobKeeper rate and not the reduced amount if they were on annual leave of more than 80 hours per week in the referenced period before the first of March 2020.

[00:30:19.917]
Ed: So, it was Karen, wasn't it?

[00:30:21.923]
Stig: It was.

[00:30:22.564]
Ed: And Crofts from my recollection are an accounting firm. They're a client of ours, that if... And maybe there's more than one Crofts. But I say that because I remember coming to the sales meeting the best part of 10 years ago. So, Karen, if that is you from Crofts Accounting, sounds like you're an accountant from your question. No offense, Karen, but that's the most complicated set of numbers I've ever heard. I have to get my calculator out to quickly go through it slowly again. And there's a high risk as well, Karen. I'm gonna turn around and say this is a question for you, and not me if you're an accountant. So let's see what she says again [inaudible 00:30:58].

[00:30:58.201]
Stig: Just to confirm, again, even if an employee is currently on unpaid parental leave, they will still be entitled to the full JobKeeper rate, in brackets, and not the reduced amount, if they were on annual leave of more than 80 hours per week in the reference period prior to the 1st of March 2020.

[00:31:18.570]
Ed: Okay. So, the question is, they're on unpaid leave at the moment, and they were on annual leave prior to the 1st of March 2020?

[00:31:31.144]
Stig: Yes.

[00:31:31.900]
Ed: Essentially, are they eligible for a JobKeeper 2.0? I was breaking the question down, Karen. I think question number one is, are they eligible for JobKeeper 2.0? On any reckoning, the marker there is the 1st of March 2020, given they're doing annual leave. I'm assuming they're permanent employees. So yes, they'd be eligible for JobKeeper 2.0 if you as a business are. And then second to that you get into the question of, okay, they're away on parental leave, which I think you said is unpaid, in which case, you know, as long as they're not getting paid parental leave, then yes, they would get JobKeeper. But remember that it's at reduced rates in what they call stage 1 of JobKeeper, depending on their hours. I'm not quite sure on that AT hour piece on the annual leave that you mentioned. But if they're doing less than 20 hours a week, they'd be on the reduced JobKeeper at $750 in stage 1 or $1,200 per fortnight, if there were more. But if you are a Crofts the accountants, you've got accountants down the corridor from you. If you're working in the HR team there, Karen, then ask them as well.

[00:32:42.357]
Stig: This one is from Tanya. She says, "I missed your company at Friday lunch last week. Anyway, I had a question about calculating JobKeeper 2.0 payment tiers greater than 20 hours. For permanent part time employees, do I just count extra hours work that were beyond contracted hours because they are not, in a bit of brackets, usual or do I literally use the average hours worked in the month of February/June? Some stuff worked extra days, but it was not a permanent ongoing change."

[00:33:12.521]
Ed: Yep. So, I can't answer that, I don't think, not because I don't know the answer, but because I think it's probably an accounting question that I'd love to answer, and I apologize for not... You said you missed lunch from me. You might say stuff like that, and you can't answer my questions anyway. So I'm sorry, I'll get in trouble if I start trying to unravel that for you.

[00:33:36.597]
Stig: Yeah. This is from Diane, Hired. "Do we need to register for JobKeeper 2.0 or does it simply flow from JobKeeper 1.5?"

[00:33:44.917]
Ed: So you need to have registered. So I was just looking at the ATR website, which is pretty well set out and will set out the process for you.

[00:33:54.166]
Stig: From Roberta. She's a client. "I have an employee on leave without pay, and has to be made redundant. Do they accrue annual leave while on unpaid leave?"

[00:34:05.169]
Ed: Hi, Roberta, thanks for your business. So employee away on leave...

[00:34:12.558]
Stig: On leave without pay.

[00:34:13.768]
Ed: Without pay, and then they're about to be made redundant. So, it depends on the basis that they're on leave without pay and also need to check on your award as well, Roberta, given you're a client rather than try and guess those things now. We'll pick up the phone to you today and speak to you about it.

[00:34:31.753]
Stig: Ben says, "Hi, Ed. I have an essential worker who had to make some deliveries recently in areas that are known hotspots. He has since been back into the workplace. If he were to be infected with COVID, would I automatically have to shut down?"

[00:34:47.295]
Ed: So the way in which it would ways back in the workplace if he were to get infected with COVID. The reality of this is that the process goes something like this. If he would show any symptoms, and he's entitled to do it without symptoms as well, he would and should go and get a test. In that testing process, you get about a 24 hour turnaround that the employee is required to self-isolate during that time, so they wouldn't be in your workplace. Now, if that test came back clear, you'd be fine. If that employee's been in the workplace and they came back positive, there's a sort of machine that takes off, regardless of which state you're in, by the way, that suddenly kind of takes control of what you need to do in your workplace. And it depends very much on the features of your workplace, how it's set up, have you got separate operating functions and so forth. But basically the Department of Health in your state takes over and you'd find out from them. But there's no need to shut anything down or anything like that at the moment. If the employee's been there, you might say, "Can I recommend that you go and get a test?" You cannot force them to do that. And if they do and go get a test, they'll have to self-isolate until they get the result.

[00:36:04.381]
Stig: Right. From Rose, "Hi Ed. I have a highly qualified employee whose duties I'm trying to change. To be fair, they are menial tasks below their usual pay rate, reception, invoicing, etc. But we just don't have the hours right now. We're JobKeeper eligible, and I believe I have the right to direct the employee to do these. They are pushing back and resenting the change in duties. Do you have any advice on this?"

[00:36:29.989]
Ed: Yeah. So hi, Rose. So, we're talking under JobKeeper 1.0 I'm assuming. So you've got an employee who is receiving JobKeeper. You want them to do the same hours or some of their hours doing other tasks, and they're saying no. So, you can ask them to do that, as long as that's sort of a reasonable request. So the debate around it becomes, is it reasonable or not? And it should be reasonable in the circumstances. And really, we've said it on here before that most of the answers to problems like this are not found in legislation. They're found in communication. So, why is the employee pushing back? It's probably not because of the meniality of the task. In my experience of these things, it would be normally because they don't understand why they're being asked. They don't understand the bigger picture. So my recommendation would be to sit down and have a bigger picture conversation, what I'd call a why conversation, to sit down and explain to them, you know, how we need to mark in and this is part of that, and can we all play our part? And see if you can get through it that way, And if you can't, then you might escalate into a dispute, but try and solve these things in those ways first before rushing off to legislation and websites.

[00:37:47.029]
Stig: Ed, this question from Mark, a question about the consultation process on redundancy. "Does that give employees a sense of false hope? For some of us, redundancy might be a fire complete. How do we approach this properly?"

[00:38:03.606]
Ed: Yeah. Hi, Mark. So, yeah, I agree with you, I've always... I'm less black and white about this than I used to be. I used to be a barrister doing employment law stuff in the UK. And so I'd always see these cases of where we would be arguing that someone did or didn't go through a consultation process. And that made the dismissal fair or unfair. And I always used to think it was ridiculous at that end of the chain. In what world does an employer really sit down and say to their employees, "Can you tell me ways in which we can avoid this redundancy?" Surely, they're the business owner. Surely, they're the ones that have really made up that decision, so they're just window dressing for the sake of a bit of legislation that makes no commercial sense.

[00:38:46.878]
And there is an element of that. Particularly, I think, as you get into smaller business, like, where you have someone that is in...if you think about the business owner, typically is in receipt of all sorts of information that they know about the business, its economic position, financial position, as well as the forecast of that position, and what's gonna happen. And they've just got more information at their fingertips to then go to someone in an individual role and say, "I'm consulting with you see what we can do to avoid redundancy," It seems like a bit of a one sided conversation. But there are circumstances in fairness, I've come to understand as an employer rather than as a barrister, that you will get good receptive, constructive conversations. And it might be, for example, there are two people doing the same job, can we look at job sharing? And the answer to it, "Maybe no, you can't or it doesn't work or the other person doesn't wanna do," whatever it might be. But they are valid points that should be considered before you go and take away someone's job from them. So, look, the short version of that is, it can, not done properly but do try to go into consultation with an open mind because otherwise you are really just window dressing.

[00:39:58.374]
Stig: This one from Karen. "If you're starting..."

[00:40:03.792]
Ed: She's back from Crofts. She's got me again.

[00:40:05.480]
Stig: I think you'll find this is a different Karen, different tone. "If your staff are only being paid for JobKeeper hours only, that is 10 hours instead of their normal 40 hours, should they be accruing holiday leave on the 10th or the 40th?"

[00:40:19.425]
Ed: So they're stood down at the moment?

[00:40:20.915]
Stig: It doesn't say.

[00:40:22.492]
Ed: Okay. So it depends... So what's basically happened has been a variation of the contract that says that they're only doing 10, not 40. And typically, what would happen there is that they would only accrue only 10 that they are doing.

[00:40:40.639]
Stig: Okay. This one is from Janet. She says, "Ed, you mentioned in your early streams about communicating with staff and your approach. How does that work for you now that the crisis is lasting longer than we initially thought and it won't be finished before Christmas in all reality?"

[00:40:56.568]
Ed: Yeah, really good question. It feels like it's a staged one. There was actually someone from Employsure asking me... It's something that I've be dealing with this week. It's a real one. There aren't any staged one, I'm aware of. So I say that... I smile, Riley, when anyone starts a question with you said in earlier, "Oh, what if I said? Maybe I've contradicted myself there." No, I was just thinking this this week. So I do a daily post to everyone on our internet, and I'm now at post 135, which you can see from the amount of people that like it, less and less people, I suppose in the business, they're getting a bit less interested. And, you know, I suppose you could put an argument together to say, "Okay, then stop doing it." But to my view, and the litmus test I use about communication is your only communicating well when people no longer need to hear it because they know everything you're gonna say anyway. They haven't got any questions. And so I try and keep it fresh. And I do things, just this week, I've changed the rhythm of how I do my daily updates. I actually do it on Wednesdays, do a thing equivalent to this live stream, where I just do a Q&A with staff. I have a session with them where I call it a white carpet session.

[00:42:18.164]
I don't know if I've done that metaphor on here before, but I'll do it in a second just to explain it. But it's basically a sort of honest, true Q&A session where I promise not to hold the punches, and people ask questions. We did the first one this Wednesday. And I started off with a bit of a spiel about this white carpet thing. And then subscribe questions and there was sort of horrible silence. And I sat here for a moment, but fortunately, someone broke the seal and there was quite a flow of them. But for a moment, I thought, "You know what? I don't really care if there aren't any questions. That probably shows I'm doing a reasonable job that people aren't unsure about anything." As it turns out, they were unsure about a few things. But I went through those with them. And I'll continue to do that every week. But that's just... So I'm now doing a daily post.

[00:43:01.515]
But on Wednesdays, I do the Q&A. And you could look at using tools like that within your business, an open door session. You know, always think about those, you know how MPs have, I think they call them surgeries where people pop in and ask them questions, those sorts of things just to try and keep it fresh. But ultimately keeping communication going. Look, I wouldn't come back to doing this if I didn't think there was a need or purpose to it, despite the fact the crisis is going on so long. If anything, actually I think it's more necessary now. And it's important that we as business leaders show the discipline now to really drive through this crisis. If you're giving up in any way could be misinterpreted.

[00:43:44.641]
Just briefly on the white carpet thing, there's this business metaphor that is meant to be a true story, I suppose. But it's probably not. The story goes something like this. So Panasonic, the technology business in Japan, they've got this wonderful glorious headquarters, apparently. These guests walk into the headquarters one day, and in the reception area, there's this gleaming white carpet, where all the foot traffic from people coming to visit cross. There's a guy on the floor on his hands and knees with a bucket and some soap and he's scrubbing away cleaning the white carpet. And one of the guests says to him, he says, "Oh, you've got a difficult job. Wouldn't it just make it easier if you just put a dark carpet down and you wouldn't have to clean it all the time?" And the guy looked up perplexed from the floor and he looks at the guest and says, "But if the carpet was dark, then you wouldn't be able to see any of the stains." And we talk internally here about being a white carpet organization. There are no secrets there. We operate on an objective and transparent, and fair basis. That's what I've been trying to do during the crisis, I suppose. I'm not keeping secrets from anyone. Secrets cause confusion, cause doubt, cause people to start rumoring and cause dissent. So, that's the approach I have been taking and I'll continue to take.

[00:45:15.976]
Stig: Ed., this is from Jill, she's a client. "We have a staff member going on WorkCover this week for surgery for approximately five weeks. We are currently on JobKeeper. I contacted our insurance company regarding payment, etc., and they've said that JobKeeper to them is not classified as income and still have to pay WorkCover regardless, do we have to cancel his JobKeeper temporarily or leave as is? They have said he's entitled to both.

[00:45:43.400]
Ed: I don't think there's an entitlement but there's a carve-out in JobKeeper for anyone being paid WorkCover that's entirely off work, so they can't double-dip on them. So that WorkCover takes over.

[00:45:56.245]
Stig: Okay. And this one from Linda, she too is a client. "Hi, Ed. Do you need to provide your staff with any documentation now that JobKeeper 1.0 is finishing and we won't qualify for next JobKeeper 2.0?

[00:46:13.650]
Ed: Hi, Linda. So, really good question. So, the documentation should follow the process, so to speak, in that if you've got people stood down or any other variations, their usual terms under JobKeeper 1.0. And you're not gonna be JobKeeper 2.0 or you're going to be a legacy employer, have a check of that, then you would need to bring them back from any stand down or variations. You don't have that power anymore. But you do if you're a legacy employer have a reduced set of powers. So you basically would, in effect by process, you would bring them back then send them away, again, subject to the rules around legacy employers and so on. Or you might bring them back and just have them go back to their normal work. But the documentation which our advice team can provide you would be making sure that you follow the process in writing. So you'd be saying, on this date, we stood you down under JobKeeper enable directions. Those directions come to an end on 20th September, please, therefore, return to work on Monday or whatever it might be that you're intending to do. But please speak to our advice team to get specific advice about that.

[00:47:20.403]
Stig: Ed, this one from Steve. He's a client. I have an employee who is regular and systematic, that is historically one to two days per week. Since March, the employee has been full time schooling her children, which one has special needs and needs constant focus and structure. If I asked them to vary their tasks and hours to outside our business hours, and they work weekends and/or evenings to work an average of one to two days a week. Does their award penalty rates apply? Or does JobKeeper directions allow this time to be calculated at normal hourly rates, as they are not available to work their normal day's hours as a regular and systematic routine? I'm keen to understand how the award/penalty rates work here.

[00:48:02.769]
Ed: Hi, Steve, really good questions. So you might have seen a bit of wrangling in the media about this about. Okay, JobKeeper enable directions allow you to do certain things. But what about the fact that awards also have maybe conflicting rules with that. So the classic conflicting rule that you might be suffering here is that pay rates outside of work hours on weekends and so on, will be at a higher rate. And that may be more than is being provided for under JobKeeper. You're asking me essentially, do I have to go and top up that money or not? The answer to that, unfortunately, is it depends on your award. And, again, Steve, as a client will get in touch with you to make sure we go through that. It may be that there's some temporary flexibility afforded under your award. And maybe that flexibility is coming to an end at the end of September, we'll need to look at all of those things for you.

[00:48:57.524]
Stig: Time for one more?

[00:48:59.546]
Ed: Sure.

[00:49:00.438]
Stig: From Isabella. We have employees in Victoria who has stood down on JobKeeper, our business is deemed an essential service and is able to deliver some services. However, employees have refused to work. What do you recommend?

[00:49:15.938]
Ed: Hi, Isabella. Not an uncommon problem both Vashi and Victoria and outside. So the question if you reverse it is really am I entitled to ask those employees to work? And if you are in some form of a central service in Melbourne at the moment, and you've got some subjects certain restrictions and ability to operate, then yes, you're entitled to ask those employees to come into work. Now, as a starting point, I suppose just using your judgment and empathy as an employer to work out whether there are ways in which you can do this without people who might be fearful of coming into work doing it. Classic scenarios I've seen over the last few months are you know people that live with elderly parents or grandparents, they're worried about being out in the community and bringing back. So there are circumstances that you might as a human, I suppose, look at and say, Look, "I understand it. Let's try and work around that," right through to the other end of the spectrum, which is kind of just people pulling your leg and just not wanting to come into work. And the way best way to address both of them really is to have a, what I call earlier in a response, a why conversation, you know, why do I need you to do this? Why am I allowed to ask you to do this? Why do you say that you can't do it, just trying to have a good frank white carpet conversation with them about that in order to if the right thing to do persuade them to come back in. If they're not going to respond well to that reasonable approach, you might need to move from the carrot to the stick and start looking at disciplinary issues with them.

[00:50:52.304]
Stig: And Ed, just to wrap up with this comment. Nice one from Sandra. Just on the glasses, Ed, did you steal them from the latest Superman movie? We appreciate your superhero efforts throughout this crisis.

[00:51:05.774]
Ed: I reckon Superman's would have been more fancy than these ones, but there we go. Thanks, Sandra. Appreciate it. Cheers, guys. See you next week.

FAQs

What is the role of Fair Work Australia?

Fair Work Australia is the former name of the Fair Work Commission. The Fair Work Commission is Australia’s national workplace relations tribunal. The Fair Work Commission is the independent body responsible for:

  • setting wage rates;
  • creating and changing modern awards;
  • approving enterprise agreements; and
  • resolving disputes
What is the purpose of the National Employment Standards?

The National Employment Standards form part of a safety net that serves to provide fair, relevant and enforceable minimum terms and conditions of employment.

What are modern awards?

Modern Awards are legal documents that outline minimum pay rates and conditions of employment for employers and employees in a particular industry or occupation.

What is the Fair Work Commission?

The Fair Work Commission is Australia’s national workplace relations tribunal. The Fair Work Commission is an independent body, responsible for:

  • setting minimum wage rates;
  • creating and changing modern awards;
  • approving enterprise agreements; and
  • resolving disputes including unfair dismissal claims.
Who set up the Fair Work Commission?

The Fair Work Commission was established by the federal Labor government in 2009.

What is the role of Fair Work Ombudsman?

The Fair Work Ombudsman is an agency of the Australian Government that serves to provide advice and information in relation to the federal workplace relations system. The Fair Work Ombudsman has the power to enforce workplace laws. They may also seek penalties for breaches of workplace laws. The Office of the Fair Work Ombudsman is currently held by Sandra Parker.

What is the difference between the Fair Work Ombudsman and the Fair Work Commission?

The Fair Work Commission is an independent body, responsible for:

  • setting minimum wage rates;
  • creating and changing modern awards;
  • approving enterprise agreements; and
  • resolving disputes including unfair dismissal claims.

This is distinct from the Fair Work Ombudsman, which is responsible for:

  • investigates workplace complaints
  • conducting audits to ensure compliance
  • enforcing the Fair Work Act 2009.
What does the Fair Work Act do?

The Fair Work Act 2009 is the legislation that regulates the federal workplace relations system. The Fair Work Act 2009 sets out the terms and conditions of employment and sets out the rights and responsibilities of employees, employers and employee organisations in relation to that employment.

Why was the Fair Work Act 2009 introduced?

The Fair Work Act 2009 was introduced to govern Australia's workplace relations system and legislate for the entitlements available to Australian workers. The legislation aims to provide a safety net of minimum entitlements and enable flexible working arrangements and fairness at work.

What does the Fair Work Act 2009 cover?

The Fair Work Act 2009 covers ‘national system’ employees and employees. Employment that is not covered under the national industrial relations system is regulated by the relevant state legislation. Whether an employer is a national system employer depends on the location of the employment relationship (state or territory) and, in some cases, the legal status and business of the employer. The Fair Work Act 2009 covers the rights and responsibilities of employees, employers and employees’ organisations in relation to employment.

What are employer responsibilities under the Fair Work Act 2009?

All Australian employers are required to meet their obligations contained within the Fair Work Act 2009. The responsibilities are wide ranging and include, but are not limited, to:

  • abiding by the minimum entitlements contained within the National Employment Standards and any applicable modern award;
  • paying the appropriate wage;
  • keeping appropriate records (as prescribed within the Fair Work Regulations); and
  • not taking (or proposing to take) action against employees for prohibited reasons.
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