Jennifer Mills and Bridget Smith: Chance for firms to get creative

Working 9 to 5 - Dolly Parton. Photo/Shock Records

Opinion

Dolly Parton famously sang: Working 9 to 5, what a way to make a living. But in the present economic climate, the focus is not so much on working nine to five but on working - and more particularly, on options to ensure people can continue to make a living.

Call it what you like: the global economic crisis, the credit crunch, the recession - regardless of its name, the downturn has led employers and employees to think of creative solutions to ensure that businesses can continue to operate.

This was perhaps best illustrated at the recent Job Summit at which ideas such as the nine-day fortnight, reductions in employee benefits, periods of unpaid leave, study leave and secondments, together with a cycle lane the length of the country, were all discussed as ways to avoid redundancies.

What these suggestions highlight is that there are options, short of redundancies, that may provide employers with the necessary economic relief to ensure that they can continue to operate in the present economic climate.

However, there is no one magic answer or one-size-fits-all solution and employers need to be aware of potential legal issues.

The first option is a reduction in working hours. If an employee's hours of work are a term and condition of their employment, any alteration would need the employee's agreement.

While employers may think an employee would never agree to this, clients report that in these tough times many employees are willing to reduce their working hours temporarily as a way to ward off redundancy.

Another option is a reduction in benefits. Again, where these are a term and condition of employment, agreement is necessary. However, benefits may not always be a term and condition. Some benefits are contained in specific policies and most policies, if correctly drafted, afford an employer greater flexibility to vary or amend them where necessary.

So the first step is to check if the benefit is a term or condition or is contained in a policy that the company can amend unilaterally and notify the employees.

The next question is whether the right to amend includes the right to withdraw. It is important to closely check the wording to ascertain whether the obligation is to provide a benefit or particular benefits.

Ideally policies will be worded so that the employer has the flexibility not only to amend the particular entitlements that are being provided, but also to withdraw the entitlements, if it wishes to do so.

Think about offering flexible hours of work, unpaid leave, study leave or sabbaticals. Some employees may be looking to ease towards retirement; others may have study commitments or outside interests such as sports training.

This is a prime time for a focus on work-life balance. Employees can keep their jobs and and employers can keep experienced staff.

It would be easy in a downturn for employers to dwell on negatives - rising costs and decreasing sales - but a better option is to focus on what the company wants to achieve, discuss it with the staff, and then get their agreement on a way to work through the crisis. Because musical tastes aside, when push comes to shove we would rather sing upbeat country and western like Dolly Parton than end up singing the blues.

* Jennifer Mills is a partner and Bridget Smith is a senior associate at Minter Ellison Rudd Watts. Both are employment law specialists.