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With the impacts of COVID-19 and tough business conditions has led to many employers becoming faced with the decision to reduce their employees' working hours. As a business owner, you may be wondering whether you can mandate an employee's reduction of hours and the process you need to use.
Learn how a Reduction of hours notice may be used to help protect your business and access free templates to get started.
What is a reduction of hours notice?
A reduction of hours notice is a document written by an employer to a full-time employee that reduces their work hours. The written notice can help protect your business if any legal issues arise as a result of the reduction of hours.
The notice needs to have the consent of the employee for it to be valid and protect you against legal action. It is best practice to discuss this matter with the employee first before sending out the notice.
Download this template at Lawpath
When should I use a Reduction of hours notice?
As an employer, you can use a Reduction of hours notice when you want to:
- Reduce a full-time employee's working hours
- Explain the reason behind reducing the employee's hours
- Adhere to the proper process and documentation of reducing the employee's hours
If you choose not to give written notice to your employees about their reduction of hours, and if you do not provide valid reasons and follow a fair process, then you may be opening your business up for the possibility of unfair dismissal claims.
Reduction of hours notice vs stand down notice
Unlike reducing hours, a stand down means that the employee has been asked to stop work altogether for a temporary period. While it's traditionally used for natural disasters and internal investigations, COVID-19 has triggered an unprecedented number of employees in Australia being stood down for reasons including:
- The closure of a business due to a government mandate, seen primarily in industries such as food, travel and hospitality.
- A situation where there is a lack of supply causing a stoppage of work, for which the employer can't be held responsible.
Like the Reduction of hours notice, a stand down notice isn't an official requirement. A formal or informal discussion may take place between the employer and employees as part of the stand down process. It's an opportunity to inform and reassure employees of their financial options, such as accessing paid leave, JobSeeker payments or seeking temporary employment elsewhere.
In most cases, once the government restrictions are lifted and there is no longer a 'stoppage of work', employees will be able to return to their jobs as before.
What does a reduction of hours notice include and not include?
- The change in working hours
- When the new arrangement will commence.
- Reasons why this change is necessary
- Invitation for the employees to give their comments about the impact of the change.
- Signatures by the employees on the notice is generally not required
- Your employee's employment contract
How effective is a reduction of hours notice?
A Reduction of hours notice can be an effective tool in formalising a change in employee's working hours. If accepted, you will be able to amend the contract and remuneration accordingly.
What happens if an employee doesn't accept the reduction of hours notice?
If the employee does not accept the reduced hours, the employer can choose to accept the refusal and keep the existing arrangements, or terminate the employment by giving notice.
Do I need a lawyer for a reduction of hours notice?
A reduction of hours notice does not have to be drafted by a lawyer. You can use an online template to draft one up if you're unsure how it's meant to look or what exactly to include.
That being said, as each business is different, you should always seek legal advice where possible from lawyers who can help you review your company's employment contract.
Get access to customisable reduction of hours notice templates online
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How do I write a reduction of hours notice?
A reduction of hours notice reads more as a letter to your employee. While there is no set way of writing the notice, you can follow this as a general guideline:
- Insert key information, such as the date, your company address and your employees name
- Explain the reason why you're reducing hours by providing a valid business reason and efforts made by management to avoid this situation.
- Explain what the reduction of hours looks like by clearly outlining the number of hours reduced and when things will return to normal, if applicable. Be empathetic and offer a silver lining even if the bad news outbears the good.
- Closing remarks to offer employees an invitation to raise questions with HR as well as next steps.
Where to get free legal documents and templates like a Reduction of hours notice
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