Business Interruption & Planning
Business Interruption Planning & Crisis Management
As a business who provides advice to employers and also as an employer of my own staff, it’s timely to revisit the “planning” aspect around interruption of business operations. It’s pertinent to take a serious look at our business survival and crisis management plans. We have seen many issues arise from Earthquakes in the South, and more recently businesses who have suffered losses through fire and flooding.
Planning for business continuity when the unexpected arises in terms of your employment obligations makes smart business sense. Employers have obligations to their employees under the Employment Relations Act. Business interruption can present itself in many forms – not necessarily through a national disaster, therefore businesses can’t rely upon outside assistance as a given.
There are a number of unique employment and legal situations that arose from the earthquake in Christchurch. Many situations, dependant on the nature of the business interruption will not be covered in current employment agreements; in the past inclusion of such clauses were generally not common practice, but there are clauses that are worth considering for new employment situations.
An important factor when dealing with any interruption in your business and then subsequent decisions around running the business and negotiating with your staff is to keep communication lines open and active. A stressful time for all concerned and a flexible and common sense approach is needed to get businesses up and running and staff back on board. When planning for the unexpected, think outside the square in terms of where your business could potentially operate from – for example, if your premises were damaged or unavailable, could your staff work from home or another location and how easily could company information and data be accessed in order to do so. Likewise a current crisis management plan should be in place and form part of your Health & Safety policy. A Crisis management plan should be a rehearsed plan which outlines policies and procedures that staff need to follow in the immediate wake of such an event. It will cover aspects such as evacuation plans, location of emergency equipment, procedures for containment, treatment etc as they relate to different events, a list of people and/or agencies that need to be contacted in event of an emergency on site. Key steps include avoiding injury/saving lives; minisimise environmental impact; saving of data and records; saving of critical stock and equipment and getting back into business.
Business interruption insurance can help cover businesses with their normal operating expenses and this will likely include covering wages for a period of time whilst your business may not be generating an income. There is a general obligation for employers to pay salaried and wage workers who are fit, willing and able to work but can’t because their place of employment is closed or damaged. There are other options which include the negotiation of using annual leave for a period of time, negotiating a reduction in wages, unpaid leave or the offering of alternative work.
Employers also have Health & Safety obligations to meet by ensuring that the workplace is fit for employees to return and resume work. Employees have the right to refuse to work if they have reasonable grounds to consider the workplace is dangerous. Employers need to ensure that they have taken all practical steps to provide a safe working environment for staff.
Planning and communication are key in times of adversity such as this and we can certainly learn and take practical steps to minimise the impact such an event could have on our own situations.