Do you need to reduce staff hours or numbers?

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Here's what you need to know

If you need to cut hours or reduce staff numbers, it's critical that you're following a proper process and staying on the right side of the law.

  • Refer to your Employment Agreement to confirm employee's contracted hours and any business change process that must be followed.
  • An open conversation with employees around the current situation may result in employees offering ideas that you had not thought of or considered.
  • With any business change that may affect your employees, you are required to act in good faith, to consult with them and to be reasonably fair.

The Business Change process in brief:

  • Prepare a proposal and discuss this with each employee, the employee should be invited to bring a support person if they wish.
  • Allow time for a consultation period where employees can seek advice and information. The timing of a consultation process is dependent on the situation, where it relates to immediate business survival the consultation period may be a lot shorter than a standard consultation.
  • Document all feedback, discussions and changes to the proposal as you work through the consultation process.
  • Once you have considered all the questions, feedback and suggestions from employees you are able to make a final decision.
  • Meet with affected employees to confirm the decision.
  • Everything should be confirmed in writing including changes to terms and conditions.
  • Notice of when final outcomes are to take place should be reasonable and clearly explained.
  • If an employee is made redundant - refer to Employment Agreement for notice period for redundancy.

For more information:

A full guide on Business Change process is available by request. For more information contact our Advisors on 0800 472 272 (1800 128 086 from Australia) or email us at

Keep up to date with advice and guidance on COVID-19 on our website.

Published in the 16th March 2020 edition of Talking Shop.