The ACT & Region Chamber of Commerce & Industry has been serving the Canberra business community for almost 80 years. Chamber members have access to advice on a range of issues regarding the employment of staff, varying other business matters, and we receive many calls from members to our Workplace Relations hotline. Regrettably, this year there has been a marked increase in the number of businesses seeking advice on how to downsize their staffing, or otherwise restructure their organisation.
There are a number of reasons why an organisation might need to reduce its staffing levels, and each case is different, but there are some consistent themes. Most business people don’t like to cut back – they would rather see their business thriving and expanding. And they don’t like having to lay off employees either. It’s difficult and stressful having to fire someone for misconduct or poor performance, but at least that outcome can be seen as being brought about by the employee’s own actions. It’s far worse having to dismiss someone due to a situation that is not the employee’s fault, which may be the case if the business’ income has fallen due to a decline in trade.
Because of this reluctance to terminate staff, many employers continue to delay even after it’s become clear that they must take action to address a worsening financial situation. We’ve had a number of calls from Chamber members that run like this:
Good afternoon, what can we do for you?
I need some advice on terminating an employee.
Can you tell me why you need to terminate someone?
It’s because our revenue is down – down a lot. We’ve been bringing in less income than our expenses for about four months already, and I can’t see that it’s going to improve. I’m worried about whether I’ll be able to make payroll next month if I don’t do something.
Sorry to hear that. The law does allow you to lay off staff provided that you have a valid reason, and you follow a reasonable process. If you’ve called, then you’ve probably already done your financial analysis and you know that you have to reduce business expenses. Let’s talk about which staff are affected, because you will have to talk to them and provide information, and also consult with them about whether there are any other options besides terminating employment…
The Chamber held a Business Crisis Summit in August which was attended by over 200 local business representatives. Valuable information was provided by those in attendance and via an online survey, it’s clear that the Canberra business community is very concerned about the state of the economy, both on a national and local level. Not only has the Federal Government reduced its spending, but our members have told us that the protracted Federal election has certainly not been helpful either; people who are uncertain about the future of their job are prone to cut back on their household spending.
One simple option put forward by a Summit participant was a “Buy Local” philosophy; where governments, businesses and consumers look to purchase goods and services from local providers, rather than from interstate or overseas.
The Chamber will follow up on all the information collated through the Business Crisis Summit, and make recommendations to both the ACT and Federal Governments, as appropriate. In addition, we strongly encourage business people from Canberra and our region to join with us in the Small Business Too Big to Ignore campaign (http://toobigtoignore.org.au). Politicians of all persuasions are now taking note of the views and needs of businesses, and the campaign will continue past the date of the Federal election.
Greg Schmidt, Director, Workplace Relations ACT & Region Chamber of Commerce & Industry