2020 has not been an easy ride for Australian business owners, to say the least. The COVID-19 crisis has left many businesses experiencing uncertainty, rendering decision-making more difficult than ever. While business professionals may have sought out expert legal advice in the past, we’re now looking at a very different set of rules. The contracts and agreements that ensured your business was compliant before, may no longer be relevant.  

In this month’s blog, mode.law Director Yule Guttenbeil explores the main issues that business owners are facing during pandemic and unpacks the steps to avoiding risky mistakes. Read on!  

What are the main issues businesses are facing during pandemic?   

Since we launched our free mode.law subscription at the beginning of the pandemic, we’ve spoken to many business owners via the online chat function on the mode.law site. It didn’t take us long to notice a pattern forming when it came to the main problems business professionals were facing.  

1. Employment issues caused by the pandemic. 

1. Where best to cut costs, and how. 

What impact has the pandemic had on employment issues?   

We’ve been faced with many questions from businesses who have unfortunately had to let staff go. Typically, these questions are about accrued leave and final pay entitlements.  

Where should employers go to check their employment rights? 

The Fair Work Ombudsman’s website is your best online resource for finding out what your obligations and rights as an employer are. They have a specific area on the site dedicated to how problems caused by COVID-19 interact with employment law. It’s easy to digest and should be the first point of call for employers and employees to check their employment rights and obligations.   

Which legal documents are being used to help solve employment issues?   

mode.law has observed that our most popular legal document template at present is the Employment Agreement. Business professionals are being quite proactive in re-documenting the employment arrangements that they have with the employees that they are keeping on. Many of these agreements outline new working relationships with existing employees, for example reduced or changed hours, changing role expectations, or changed roles entirely.  

One of mode.law’s legal partners, Attune Legal, has also seen an uptick in Separation Agreements, whereby employers and employees negotiate the termination of employment. A Separation Agreement is often introduced when a working relationship has broken down and the employment agreement doesn’t adequately cover the way the parties wish to end their tenure.  

If this sounds relevant to your experience, feel free to reach out to a mode.law lawyer via your subscription. They will help to determine whether you require a Separation Agreement and can provide a quote for preparing one for you.  

What are the risks faced when businesses try to cut costs?  

We’ve observed that the two ways business professionals are attempting to cut costs are reducing employee hours and letting staff go. While these actions are somewhat understandable if a business is not trading as normal, there are a few other places that businesses are cutting costs which prove risky. During times of reduced cash flow, business owners have also neglected their relationships with professional advisors such as lawyers and accountants. While there’s an element of understanding here also, it’s what business owners are doing without the advice of these professionals that presents the greatest risk. Often, they’re ceasing to pay superannuation or even tax (a go-to move for a business in distress) but this behaviour can end a business faster than almost any other error.   

How can these mistakes be avoided? 

Instead of pulling back from experts and advisors in times of crisis, reach out to these professionals. It’s in these circumstances where an advisor can be most helpful to a business. Not only will they provide advice about making decisions under pressure, they often know of an alternative course of action that an individual may not otherwise be aware of. This might be as simple as making payment arrangements with the ATO or applying for a grant that a business professional may never have considered. At other times, it might be devising a more comprehensive business strategy. Either way, if a business professional is faced with a tough decision in these challenging times, we highly recommend they consult with a professional before jumping into any major decisions.  

So, how can mode.law help to reduce these risks?   

mode.law is designed for Australian businesses seeking innovative and practical ways to meet their legal needs through uncertain times. To play our part in keeping Australian businesses in the game, we’ve made mode.law subscriptions free until September. Attune Legal are also offering free legal guidance via the chat on our website at this time. Lean on us, we’re here to help.