COVID-19 – Managing employees in the face of the outbreak

The outbreak and rapid spread of a novel corona virus, COVID-19, is throwing up all sorts of dilemmas for businesses – with a spotlight on business continuity planning.

As the Fair Work Act 2009 (Act) does not include specific provisions dealing with epidemics or pandemics, working out how to manage your workforce in a manner that is safe, lawful and financially viable can be tricky.

In this blog, we take a look at three of the issues that many of our clients are navigating with respect to managing their employees.

 

1. Use of sick leave and quarantine measures

An employee can (of course) avail themselves of their accrued sick leave if they take time off work due to being ill with the novel corona virus.

But what about where an employee is in quarantine or isolation solely because of exposure to or potential infection with the virus and government rules?

Technically, an employee is not entitled to take sick (personal) leave under the National Employment Standards unless they are taking leave due to a personal injury or illness. Where feasible, employers can permit an employee to work from home during such a period of quarantine or isolation. Alternatively, depending on the circumstances and the individual’s leave balances, an employee may be able to avail themselves of:

    • annual leave
    • long service leave
    • carer’s leave (e.g. where caring for a member of their household or immediate family who is ill or dealing with an unexpected emergency), or
    • unpaid leave – as agreed with their employer.

Always be sure to check any applicable modern awards, enterprise agreements, employment contract terms and company policies – as they may contain additional rules or entitlements.

 

2. Directions not to attend work, stand downs and business closures

“We are directing you not to attend work ….”

If an employer directs an employee not to attend work, despite them being fit and able to do so, the default position is that employees must continue to get paid.

For example, prior to the 14-day self-isolation requirement on all overseas arrivals that was imposed by government with effect from 16 March 2020, some organisations were imposing company-specific quarantine requirements on employees who were returning from overseas destinations outside of the ‘red zone’.

In this situation, it’s important to check whether you can simply issue this direction (e.g. pursuant to the employee’s contract or on the basis of your workplace health and safety obligations) – or whether you need employee agreement. (Again, check any applicable industrial instruments, contract terms and company policies – and seek specific advice.)

“We are standing you down…”

The Act contains stand down provisions that permit employers to stand down an employee during a period in which the employee “cannot usefully be employed” because of a number of circumstances, including “a stoppage of work for any cause for which the employer cannot reasonably be held responsible.” (The other circumstances are industrial action and breakdown of machinery or equipment.)

Whilst the “stoppage of work” stand down provision has typically been used in the case of adverse weather and natural disasters (e.g. bushfires), a pandemic such as the COVID-19 outbreak may result in a situation that meets the requirements for a lawful stand down under the Act. An employer will need to be able to establish a causal nexus between the stoppage of work and the impact of the pandemic.

In some cases, whether there is a casual nexus might be fairly clear cut, in others, it may be uncertain. For example, if an entire business is forced to close to comply with a government direction, the stoppage of work would be squarely due to the pandemic. Similarly, where a manufacturing business is unable to import goods due to closed borders or travel restrictions related to the pandemic, causing production to halt, the stoppage of work is the direct result of the pandemic. On the other hand, if a business can continue to operate but is experiencing reduced demand for its goods or services due to the pandemic, there is a risk that the stand down would not be permitted by the Act. That said, on a practical (rather than legal) level, a business experiencing a significant downturn in the face of the pandemic may opt to stand down employees and try to retain its workforce (notwithstanding the legal risk), if the only viable alternative is redundancies.

On 22 March 2020, federal and state governments have announced further measures to slow the spread of COVID-19, which include ordering “non-essential” operations to halt. At present, there remains considerable confusion over what falls into “essential” vs. “non-essential”, with greater clarity anticipated in the coming days. It will be of course be easier for businesses deemed as “non-essential” to have confidence that any stand downs they implement are permitted under the Act.

The regulator – the Fair Work Ombudsman – cautions on its website that the deterioration of business conditions of itself will not justify a stand down under the Act. It has also asserted that best practice in respect of stand downs is to first consider alternatives, including letting employees take a period of paid leave (such as annual leave) or to work at another location such as from home or another work site.

What happens if a lawful stand down is effected? An employer does not need to pay wages to stood down employees, but an employee accrues leave in the usual way. Importantly, an employee is not taken to be stood down during a period when he/she:

    • is taking paid or unpaid leave that is authorised by the employer, or
    • is otherwise authorised to be absent from his/her employment.

For example, an employee may be able to take paid leave (e.g. annual leave) during all or part of a period during which the employee would otherwise be stood down (subject to their leave balance being sufficient or the employer agreeing to grant leave in advance).

Depending on the circumstances, an employer may be permitted to stand down some or all of its employees – and it is important to keep in mind that only the employees who cannot be usefully employed due to a stoppage of work because of the pandemic (or other cause for which the employer cannot reasonably be held responsible) may be stood down.

There is no minimum or maximum duration of a stand down under the Act – it is a question of fact whether, on a particular day, an employee can be “usefully employed” and this is to be determined by reference to the circumstances of the employer’s business at the time.

Finally but importantly, the stand down provisions in the Act only apply when an employee’s employment contract and enterprise agreement don’t contain stand down provisions that deal with the same circumstances.

“We are closing our business …”

In some circumstances, an employer can close down their business and direct employees to take their accrued annual leave.

Typically, this occurs at Christmas or due to machinery upgrades etc – but an epidemic or pandemic could prompt a temporary close down.

For award- and enterprise agreement-free employees, the Act stipulates that the direction to take annual leave must be reasonable – and there may be relevant terms in contract or policy too. Otherwise, check any applicable industrial instruments too.

 

3. Workplace health and safety obligations

Employers have a duty to provide and maintain, so far as is reasonably practicable, a working environment that is safe and without risks to the health of employees. This includes identifying risks to health or safety associated with potential exposure to COVID-19 – and taking measures to control these risks.

Employers are taking various measures to the control the health risks to their workforces, including:

    • providing adequate facilities to enable good hygiene practices (e.g. soap, hand sanitiser, signage and reminders)
    • limiting or banning non-essential travel
    • developing infection control policies and procedures
    • directing employees to obtain medical clearance and comply with quarantine measures, particularly following travel to high risk locations

The Department of Health has published an information sheet for employers; as the situation and corresponding medical advice is constantly changing, it is critical that employers keep up to speed with the latest information. Specific advice should be sought and the steps that your business should take will vary depending on factors such as the nature of your business and the locations of your operations.

This is general advice only and should not be relied upon; it may not be applicable to your organisation or situation and you should obtain specific advice.