As of writing, President Rodrigo Duterte has placed the country under a state of calamity due to the spread of COVID-19. In the Philippines alone, there are currently 187 confirmed cases and 12 deaths. This statistic is expected to rise as soon as testing kits become widely available to hospitals and other medical institutions.

Additionally, the entire Luzon has been placed on enhanced community quarantine, which involves stricter measures to contain the virus, such as suspension of work and mass transportation, and a call for citizens to stay at home. Other provinces and cities are implementing similar quarantine and lockdown protocols as well.

EFFECTS ON THE F&B INDUSTRY

With regulations such as temporary cessation of operations and implementation of a skeletal workforce for those offering essential services, what’s going to happen to restaurants, SMEs and the foodservice industry?

While the once busy streets are now empty and potential customers staying at home or heading to supermarkets to replenish supplies, restaurant and food establishment closures can be expected. Businesses have already begun to downsize or reduce operating times, and others have been forced to shut down.

It will be difficult for a restaurant owner to gain profit at a time when cities look like ghost towns. And when the time comes that they decide to close up shop because it isn’t sustainable any more, it is up to them to make sure that this transition process is done properly. That despite an unfavorable outcome, there won’t be grievances or issues on both parties.

“The management should ensure that the employee hears and understands the message, retains dignity throughout the process and knows what to do next,” says Jo Ann Asetre of Lee Hecht Harrison.

PREPARATION IS KEY

According to Jo Ann Asetre, managing director of Lee Hecht Harrison Philippines, there are certain principles that business owners can refer to when letting employees go, whether there’s a pandemic or not.

“Like any other business, there are several factors that cause cessation of business,” she says, stating the following reasons: competitive landscape, financial performance, regulatory issues, economic conditions, marketplace demands and costs of inaction

While the decision to close is entirely up to management, Asetre lays down options enterprises can look into before doing so.

“If the management is considering business closure due to low financial performance, there are some options to consider before exiting employees.”

  • Consider natural attrition. Don’t replace workers who resign from the company
  • Business restructuring. Shedding non-core activities or contracting them out
  • Workforce management. Retire workers of retirement age.
  • Workforce restructuring. Redeployment to another part of the business, training or re-training to meet identified skills shortages.
  • Reorganization of working time. Unpaid voluntary leave, reduce working hours/working week, reduce overtime.
  • Use of early retirement/voluntary redundancies. Offer early retirement package to volunteers to avoid

If these alternatives won’t keep your business afloat and it’s time to close, one of the first things you have to do is create a designated team to be in charge during this transition period. It would help to have a point person whom your employees would go to for any questions or clarifications about the situation. Doing so creates transparency and trust between both parties.

It’s also important to review the labor code and ensure that the company processes in place are compliant with the statutes stipulated. There should be clear policies, protocols and tools in place that will guide you throughout the time period, such as separation benefits that include:

  • Separation pay
  • SSS separation benefits
  • Retirement pay
  • Tax exemption
  • Leave credits conversion (if applicable)

One of the biggest issues you can face involves miscalculation of the final pay, and you can mitigate this by having a solid regulation in place.

Seek professional advice, especially when it comes to the law. In particular, you must be mindful of the law regarding contractual workers—if you have any—and be clear on the employment arrangements of your staff. Keep in mind that when something is unclear, it’s best to consult the experts. This protects you from any legal issues or future litigations.

COMMUNICATE THE RIGHT WAY

Asetre also stresses the need to provide the right training to managers and other people directly involved in an employee exit. Prepare the leaders on how to properly notify workers of the situation, how to act during meetings that discuss plans moving forward and doing all these without letting their emotions take over.

“The management should ensure that the employee hears and understands the message, retains dignity throughout the process and knows what to do next,” says Asetre.

In the case of the COVID-19 pandemic, make it clear that it isn’t their fault that they’ll be let go or that the establishment will be closed temporarily. Be transparent and be careful with what message you want to convey, providing a clear rationale that led you to the final decision. Make your employees feel like they are in a safe environment and that they are being cared for, especially during a crisis.

In the case of the COVID-19 pandemic, make it clear that it isn’t their fault that they’ll be let go or that the establishment will be closed temporarily. Be transparent and be careful with what message you want to convey, providing a clear rationale that led you to the final decision. Make your employees feel like they are in a safe environment and that they are being cared for, especially during a crisis.

Let them know as well the due process and what they should expect from you, the business owner, and what is needed from them as an employee. This creates accountability, that your workers are counting on you to fulfill any legal or ethical obligations they are owed.

It would also be beneficial to create a communications team that will put a plan in place to let you be in control of the flow of information within the business. This helps stop false rumors from spreading what could potentially create animosity and allow you to protect your company’s internal and external branding as well.

“Successful separation of employees often boils down to human factors, to treating downsized employees professionally and with compassion and treating remaining employees with sensitivity so that morale, commitment, productivity and retention are not adversely affected in the long term,” says Asetre. This particular transition phase will not be too stressful or risky if you demonstrate professionalism and care that they deserve. They have, after all, contributed to the success of your business.

And even before a crisis or pandemic hits, it pays to make your organization more capable to adapt, respond and recover from change and uncertainty.

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