Normally I write or post on Supply Chain and Operations. However over the last week, some interesting conversations have prompted a deviation from the norm.
I have an enormous amount of empathy for companies that have been hit hard by COVID-19 and it is great to see some of the initiatives that companies and their staff have taken to try and mitigate the effects and get through to the other side. But seeing some companies cross the line and take advantage of staff during a crisis does not sit well. Particularly, when they promote themselves as having a strong culture and values.
Many businesses have agreed with employees that their working hours will be reduced and therefore employee salaries will be reduced to match. They have also applied for, and are using, the wage subsidy to support employees.
I know of lots of businesses that are now paying employees 80% of original salaries and employees are now working 80% of their previous hours. Businesses are under stress and workflow and revenues have decreased. The new hours of work and reduced salaries reflect the current situation.
However over the last couple of weeks, individuals from some businesses have told me they are receiving 80% of their salary and are expected to work 100% of their normal hours.
I thought that was unusual and didn’t have a ring of fairness so I had a look at some commentary on the internet. BDO Spicers notes that employees should be paid for the hours they work at their normal pay unless otherwise agreed.
This was the common thread. I guess most people are going to agree to this if they are worried about their job security!
I thought I would dig a bit more and asked a Professor of Law for his opinion. He said employers can ask whatever they want, but they can’t insist. Employees can say no. Of course, the reality is the pressure both implied and actual is considerable. Any bargain struck has to be entered freely and not as a result of undue pressure.
There are situations where staff are taking pay cuts but the business owners are still taking full drawings.
The whole scenario raises plenty of questions: Is it fair? Is it legal? Can you take the wage subsidy and pay your staff less and ask them to continue to work 100% of their normal hours? I know it is not fair and as for the other two questions, the advice I’ve received is no, and no.
For me as a small business owner, it boils down to the fundamentals of your values and your leadership. Where does your moral compass sit?
Are you a leader who leads and is taking the pain with your team? Or are you a leader whose motto is “do as I say, not as I do”?
It is a cliché but it is true – people are your greatest asset. Look after them.