Termination calls increase by 19 per cent as economic recovery struggles to flow through to SMEs

Published June 11, 2021 -
Termination Calls

Terminations have risen as small business owners struggle with the costs of running a business in a two-tiered economy, with many industries still being hit hard by the fallout of the COVID-19 pandemic.

Employsure, workplace relations advisor to more than 29,000 businesses across Australia and New Zealand, has seen a 19 per cent increase in termination-related calls to its employer advice line between January and May this year.

In May alone, more than 3,600 separate calls from employers seeking termination advice were received.

“Termination-related calls to our advice line increased last year shortly before the second round of JobKeeper was announced, and then grew again when the wage subsidy stopped at the end of March,” said Employsure Business Partner Josh Paterson.

“What these figures show, coupled with what employers are telling us, is the economic recovery is not flowing through to small business owners, particularly those in tourism and hospitality.

“Although employment figures are promising and the economic recovery is strong in some areas, more needs to be done to protect small businesses, who are particularly susceptible to slow economic growth. If nothing changes, we will likely see an increase in business owners seeking advice on how to make cuts to survive.”

Calls related to termination can range from employers seeking probation, disciplinary or performance management advice on certain employees, to others needing guidance on redundancy.

While some see redundancy as a way to cut costs, it is not always the most appropriate solution. Under the Fair Work Act, employees made redundant are entitled to a payment in certain circumstances depending on factors such as their length of service, size of their employer, or applicable industrial instrument, which in some cases are costly to the employer.

With JobKeeper at its end, employers should look at how to best manage their business without the extra financial cushioning. While terminating employees through a genuine redundancy is an option, in some circumstances, the process is more trouble and costly than it is worth.

“Over the coming months, some small business employers will need to preserve as much cash as they can until the COVD-19 vaccine fully rolls out and international borders can safely open. Of course, as we’ve seen with Victoria recently, this is far from happening and will only add to the strain business owners have felt for more than a year now.

“While some employers will be able to hold out until then, for some sadly, the increased pressure of operating in this environment will be their end,” concluded Mr Paterson.


Further enquiries:

Matthew Bridges

[email protected]

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