by Breda O'Malley March-27-2020 in Employment Law, COVID-19
On 29 February 2020, the first confirmed case of COVID-19 in the Republic of Ireland was announced by the National Public Health Emergency Team. Since then, the outbreak of the virus has evolved rapidly, with employers initiating certain measures in order to mitigate the risk of spreading COVID-19 within the workplace and to manage employees’ health and safety in line with national public health advice.
As Ireland is now in what is considered a “delay phase” in an effort to combat the spread of COVID-19, Breda O’Malley of Hayes Employment Law Team takes a look at the key considerations for employers in managing concerns around their employees and business continuity planning.
1. Consider the balance between cutting costs and treating employees with compassion.
As business leaders transition from health and safety priorities to mitigation of business risk and financial loss arrangements, there will be a natural cost-cutting response in most workforces. A key component to this inevitable cost-cutting response will be balancing the economic outcome of this pandemic with treating employees in a clear and compassionate way. Communicating openly with employees and inviting them to provide suggested approaches to the business’ crisis management is a means of seeking workforce “buy in”, and loyalty from employees in the longer term.1
2. Consider each role in your business independently and in-line with your business needs.
For businesses that have closed or are due to close in the near future, business leaders will need to look at whether there are notable differences in business requirements for each role within the business over the coming weeks and months. The business may require certain employees immediately, whereas others may not be needed until later stages, prior to re-opening. With these considerations in mind, decisions need to be tailored for the various roles within the business around the issue of timing. It is important to be aware that business decisions around reduced hours and lay-off won’t be a ‘one size fits all‘ response, given the variability of each business’ needs, over the coming weeks and months.
3. Continually review your situation.
In some circumstances, it may not be appropriate to make decisions around key roles now due to planning being carried out on a phased basis. Depending on business needs, it may be preferable to leave plans for many roles under review throughout the coming weeks while further developments arise, to allow the business flexibility to respond fluidly, when the time comes.
4. Take caution when deciding to pay some employees, but not others.
When it comes to paying employees, business leaders should bear in mind whether there are key performers in the business that may need to be incentivised by paying in full, if practical, throughout the duration of any closure. This decision would be made in order to ensure that these key performers remain loyal to the business and available when the business re-opens. This type of commercial business decision needs to be balanced against a risk of a damaging business perception by those who are not considered to be ‘key’ performers. With this in mind, there is a balancing of competing interests to be met here.
5. Clearly and objectively document your rationale for paying some employees, but not others.
If making the decision to pay certain key employees in full during any closure, it is imperative that there is a clear and objectively verifiable rationale for all business decisions taken, particularly ones which see different categories of employees being treated less favourably than others. These decisions should be documented and kept on file for future reference. This will assist the business with addressing any public relations, industrial and employment relations and legal risk issues around discrimination, breach of contract, or other potential legal claims that may arise.
6. Consider how your response may affect your brand reputation.
The way in which business leaders deal with their employees now may either enhance or potentially damage brand reputation. This is an important consideration to be kept at the forefront of all business decisions made during this pandemic.
7. Align your response with your business’ ethos and value system.
All decisions taken at this time in response to mitigating the risks associated with the spread of COVID-19 must be aligned with the business’ ethos and value system. If this is not a key consideration in decision making, the business is at risk of damaging cynicism and a breakdown of trust in employees may prevail at a later stage.
8. Consider alternative options to lay-offs.
Employers have been asked by the Government to try to retain, rather than let employees go. Business leaders should consider the possibility of offering employees reduced wages, part time work, shorter working days or weeks, suspension of pension payments, delayed bonuses, pay freezes, temporary cessation of incentive grants, and other similar measures before making decisions with respect to lay-offs and redundancies. Avoiding lay-offs and redundancies, where possible, lends itself to positive PR for businesses.
9. Ask employees to use their annual leave entitlements.
Another alternative to the above, is to ask employees if they wish to use their annual leave entitlements in order to be paid during any closure of business, where they would otherwise be subject to pay reductions. In the event that employees use their annual leave during this time, they should be actively encouraged to use such time for rest and recreation.
10. Plan effectively
Identify what is a ‘known unknown’, and plan resources around those eventualities.
For further information on any of these issues, please contact Breda O'Malley bomalley@hayes-solicitors.ie or any member of the Employment Law Team.
1 Tarki, A., Levy, P. and Weiss, J., 2020. The Coronavirus Crisis Doesn’T Have To Lead To Layoffs. Available at: <https://hbr.org/2020/03/the-coronavirus-crisis-doesnt-have-to-lead-to-layoffs>.
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About the Author
Breda O'Malley
Breda is a partner in the Employment Law Team at Hayes solicitors.
Breda advises on the full range employment issues across a broad range of sectors, for established business clients and senior executives.