Gill South: Be prepared, or face the consequences when the pandemic peaks

For many New Zealand businesses, the swine flu virus has arrived at the worst possible time; when they are already leaning heavily on a depleted staff, with many personnel doing more than one job, the idea of losing even more employees for a period is enough to send many management teams into despair.

The Ministry of Health says businesses can expect absenteeism to be as high as 50 per cent for a two-week period during the peak of the pandemic, and businesses need to be aware the overall pandemic could last around eight weeks.

There has been plenty of news about how to handle the clinical side of things in the workplace, but how should companies respond in a more considered managerial way?

Business continuity specialist David Dunsheath, who runs Business Continuance Planning, says managers should be trying to protect their reputation, operation and finances. Don't think of this as a pandemic, think of it as a business continuity challenge, he says. "It's about preparedness."

The consultant recommends larger operations not only have a crisis management team, but a business continuity team and a clinical health team.

"How do you preserve your reputation? If you don't appear to know what you are doing, your reputation will be in tatters."

Management should be looking at key resourcing, dependencies, and how teams work together, he says.

One of the first things is putting the microscope on highly valued personnel without whom the company could not function. How would things change if they were disabled - what effect would it have on the company and on external clients, asks Dunsheath.

Mike Wood, chair of the Society for Risk Management, says the last big challenge for New Zealand businesses was the 1998 Auckland CBD power outage.

He recommends every company have a crisis management team, including people who head all the major functions involved, such as HR, communications, operations and finance.

The team will need a number of plans - a plan for staff being down by 10 or 20 per cent and a different plan for the "oh shit" situation, says Wood.

Treat your staff humanely, he adds. If you want good relationships with staff, think about exceptions which could be made about sick leave.

Some companies are woefully under-prepared, says business continuity specialist Janet Osborne, senior consultant at Standby Consulting, a Dunedin-based business continuity firm. "It would be reassuring to think that the majority of medium to large businesses in New Zealand put the same level of input into having an up-to-date and fully tested business continuity plan as they do for their insurances and other aspects of their businesses, but sadly this is not always the case," she says.

Ideally, staff should be trained to operate in multiple roles or business functions, says Osborne. Where this is not possible, management should ensure that there is good documentation of policies and procedures, so business sectors can continue to function.

Management should also ensure there are secondary people approved and trained for authorising transactions.

Immediate and frequent communication with your staff is essential, recommends Osborne. They should be given advice on what will happen to wages if the business is forced to close down for a period.

"Don't forget also that communication with customers, contractors and suppliers is also important. Keep them informed of the situation if your business productivity is impaired," says the risk management expert.

The way that city and district councils are managing the pandemic is very much in the public eye - if too many people are off sick to collect the rubbish, you could have another kind of health hazard.

"With three fault lines in our region we are well aware of obligations," says Mike Mendonca, city operations manager at the Wellington City Council. The city has a well-established crisis management team which has meetings twice a week and is being chaired by the chief executive, Garry Poole. The crisis team has representatives from IT, welfare, HR, operations and infrastructure.

Mendonca is well aware he has some staff who are critical to keeping the city running - those in charge of the water supply, sewerage and rubbish collection.

"It's about prioritising what absolutely needs to be done, and stuff that can be deferred that's not critical," he says. Most of the council's 1500 staff have email at home, enabling them to communicate with work.

After a flood of inquiries from clients, employment law specialist Jennifer Mills, a partner at Minter Ellison Rudd Watts, has written a comprehensive newsletter taking them through all the employment ins and outs.

As well as all the employment issues - such as whether employers can expect quarantined employees to work from home - she also urges management to ensure their business has considered the potential impact of customer and supply issues. For instance, local or international suppliers being unable to meet orders, or the business itself being unable to fulfil an order.

In the worst case, she says, such issues may harm the financial viability of the business. If you default on a contract for an important customer because you had to close your factory or office due to swine flu, are you liable?

Many commercial contracts contain a clause which may be invoked if there is a "force majeure" event, otherwise known as an "act of God", she says. In many situations, force majeure clauses will capture swine flu-related interruptions. "That said, swine flu will not be able to be used as a 'get out of jail card' in all cases. Where a business fails to take reasonable steps to mitigate the risks posed by a pandemic, the courts may be reluctant to allow force majeure to operate," says Mills.

There is the possibility that if cases of swine flu continue to increase, decisions may be taken from employers and made under the powers of the Civil Defence Emergency Management Act.

Meanwhile, businesses should stay abreast of the situation as the momentum builds, says Mills.

The latest information from the Ministry of Health can be obtained at www.moh.govt.nz. International information can be found at www.who.int.

Gill South is a freelance journalist and author of the newly released Because We're Worth It, a "where to from here guide" for today's working mother.