Handling staff cuts amid COVID-19

No one wants to cut staff – within a small salon, staff can become family. And yet, this is a position so many salon owners are finding themselves in, following the government’s announcement that beauty salons can no longer trade under tough restriction laws.

If an employee is made redundant, there is an array of factors you need to be aware of.

Redundancy pay
While some small businesses are exempt from awarding redundancy pay – or severance – to casual employees, most staff that are being made redundant will be entitled to some sort of payment. “The amount of redundancy pay the employee gets is based on their continuous service with their employer,” says a representative of the Fair Work Ombudsman. “Continuous service is the length of time they are employed by the business and doesn’t include unpaid leave.” If you’re covered by a registered agreement, check the terms of your agreement for information about how much redundancy needs to be paid out and other entitlements.

Notice and final pay
In an ordinary situation, business owners would be able to give staff some indication that restructuring was going to be taking place, at the cost of roles. However, Coronavirus has taken that luxury away, leaving many salon owners to let staff go the same day they shut their doors. With that in mind, the date of termination of contract is noted as the same day the staff member was notified, and the final pay will need to cover all shifts worked, as well as the severance pay, calculated on the time spent with the company. “It will also need to include any bonuses that are owing, loadings, monetary allowances, overtime and penalty rates,” says the representative.

Forced leave
If you’d prefer not to make staff redundant, providing them some sort of security once the pandemic is over, and saving you the process of re-training a new employee, you can look into the forced leave option. You would come to an arrangement with the staff member that they are on forced, unpaid leave, but are able to seek out temporary work while the salon is closed. This is on the provision that once the salon has re-opened, they become available to you in the same capacity as they previously were.

 

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