From floods to fires, Australian businesses have been hit hard by a range of natural disasters in recent years, below are some things to consider if you have been impacted or are so in the future.

Financial assistance

For affected residents and businesses, there is often a range of assistance available at both a State and Federal government level. This assistance may help defray some of the recovery costs. Irrespective of which State or Territory you are located, to view the government assistance on offer, visit the Disaster Assist website www.disasterassist.gov.au

Taxation

Some of the insurance payouts received may have tax consequences. This will need to be factored in when determining your business’s financial position. Touch base with us for the correct tax treatment.

Initial actions

One of the first practical steps to take is to contact your insurers. To maximise insurance compensation, don’t attempt to clean up or make repairs before you have taken photos of the damage and provided your insurer with a preliminary damage assessment. This way you can convey to them the full extent of the damage.

With the damage having been assessed, your insurer will then be in a position to inform you of the payout, and when it will be made. This may be crucial in determining whether you are in a position to recommence, or whether you may have to alter your business (e.g. downsize), or cease business altogether.

Staff will also need to be kept in the loop. Redundancies or instructions to take annual leave may need to be considered – depending on the timeframe for recommencement (if at all). The Fair Work Act generally allows employers to instruct their workers to take annual or long service leave in less busy periods. Where an employee has no accrued annual or long service leave to take, or does not wish to take paid leave during an enforced shutdown outside the employer’s control, then the Fair Work Act allows the employer to stand workers down without pay. This provision of the Fair Work Act however only applies where the employee’s Award or employment agreement does not contain a stand down provision which deals with the same circumstances.

It’s also noted that an employer is not permitted to ask employees to start or continue work if it is unsafe or unreasonable. In relation to bushfires, the heat or smoke from bushfires may be a risk to health and safety at work. Where employees do not recommence work for safety reasons, they are not entitled to be paid during this period– unless their Award or employment agreement requires otherwise.

Note that all employees, including casuals, are entitled to take community service leave for certain voluntary emergency management activities if what they are absent for meets the definition of a voluntary emergency management activity. This leave is unpaid, and is unlimited.

Financial position

To determine this, you can source your financial records from us (your accountant). Sit down with us and establish the financial position of the business, taking into account insurance payouts and recovery costs moving forward. Cashflow will be crucial in recommencing, therefore it’s recommended that you prepare a cashflow forecast with our assistance in light of your changed circumstances.