Paper | COVID-19: Frequently Asked Employment Law QuestionsDownload Full Document April 2020
IMPORTANT DISCLAIMER: The advice in the article below was prepared on 2 April 2020. Some of our advice, particularly as it relates to a reduction in work, has been superseded by the Job Keeper Rules. Please ensure you obtain tailored advice if you have any questions.
COVID-19 has had an immediate and significant impact on employers. To assist, we have compiled this up-to-date FAQ based on advice we have been providing employer clients.
What are my obligations to employees in the workplace?
Employers must take all reasonable steps to minimise the risks to employees of being exposed to coronavirus while they are working. What does this mean in practice? Consider:
- appropriate equipment like masks or plastic shields at a check-out;
- resources, training and monitoring to ensure that appropriate hygiene practices are implemented including that the premises are regularly and thoroughly cleaned;
- whether any workers are vulnerable, particularly in terms of age and existing medical conditions, and;
- the mental health of your employees. It is more important than ever that employers remain mindful of doing what they reasonably can to support mental health and well-being.
WHS considerations vary significantly across workplaces. If in doubt, obtain advice.
What are my obligations to employees working remotely?
Home is the new workplace. If you have staff working from home:
- you must have a comprehensive working from home policy and self-assessment checklist;
- you must address working from home risks like ergonomics and adequate lighting; and
- ensure you keep appropriate records, including evidence of compliance.
Can I compel employees to take annual leave?1
In most cases, no, but this is changing.
Your first port of call is the enterprise agreement or award, if applicable. In most cases, they provide that an employer can only direct an employee to take a period of annual leave where they have excess leave or during a shut-down period, such as Christmas. Unfortunately, neither option is very helpful in the current situation, given the notice required.
The situation is different again for award free employees, most of whom can be required to take annual leave where it is “reasonable” to do so. Whether the current exceptional circumstances make such a request reasonable will remain open to debate, and will depend on the circumstances of each employer.
In short, if you feel you have little option but to require employees to take leave, try and reach agreement with employees on the basis:
- it may be preferable to being stood down without pay; or
- it may genuinely assist with the longer term viability of the employer.
Having said that, our readers covered by the Hospitality Award, Clerks Award or Restaurant Award have important exceptions available to them. The Fair Work Commission recently varied those awards to allow employers to direct an employee to take a period of annual leave on much shorter periods of notice.
Given the wide ranging impact on industry by COVID-19, we expect similar amendments will be made to other awards. Please visit our Linkedin page for developments:
1The answers from this point apply to our private sector and Commonwealth Government clients only. If you are a State or Local Government client, you will have different considerations. It is very important you contact us for tailored advice.
What about long service leave?
It depends on which State or Territory you are in. In most States, an employer can require an employee to take long service leave, but there are lengthy notice requirements, which can make this option impractical. Again, like annual leave, your best option is to appeal to the understanding of employees during these difficult times, and see if a consent position can be reached.
What happens if an employee does not have annual leave available – can they use personal leave?
It depends. Care must be taken before agreeing to personal leave where ordinary eligibility requirements are not met. An employee may only utilise statutory personal leave where they are unable to work due to personal illness or injury, or an illness or injury affecting a member of their immediate family, or household.
If you grant this leave in other circumstances, there is a risk an employee could assert (down the track) that what they took was not their legal entitlement to personal leave, and that the employer owes them more leave as a result.
What about providing personal/carer’s leave while children are home from School?
Employers should exercise caution when granting paid carer’s leave in situations in which a child is not “unwell”. Carers leave is ordinarily only available to care for a (well) child in an emergency. However, care requirements over the longer term, such as the entire school holidays, are unlikely to be an “emergency” – even in these difficult times.
Employers are of course free to grant additional paid leave in these circumstances. However, the safer presumption should be that personal leave granted purely for school care, if not an emergency situation, ought to be classified as additional “special leave” – and not statutory personal/carers leave.
When can I stand employees down without pay?
The Fair Work Act 2009 (Cth) (FW Act) allows an employer to stand employees down without payment where there is a stoppage of work for any reason that the employer cannot be held responsible. Enterprise agreements and contracts may also deal with stand down of employees, but this is unusual.
An employee may generally only be stood down where there is no ability for the employee to provide any benefit to the employer. If an employee can provide any revenue generating work, which may include duties that they would not ordinarily perform, then stand down may not be appropriate.
A decision to stand down employees may be subject to challenge in the Fair Work Commission. An employer and employee may also agree to the taking of paid annual or long service leave, as an alternative to standing down without pay. Whether your particular workplace has met the stand-down requirements is a legally complex question. This is addressed below in section “usefully employed”.
What are my options if revenue decreases significantly due to COVID-19?
If it is the case that there is a stoppage of work as a result of COVID-19 restrictions, then stand down may be appropriate. However, the “bar” to justify stand down is high.
If it is the case that there is a reduction in revenue, even if significant, steps should be taken to discuss with employees whether agreement can be reached to reduce their working hours to better reflect the amount of work available, or to take a period of paid leave.
If there is no stand down of employees, then consideration may be given to whether those positions are redundant, or if a period of unpaid leave could be taken until work levels return to normal.
I can’t afford to have employees take leave now when business is so difficult. What are my options?
If a decision is made to stand employees down, there is no obligation on an employer to make any payments to the employee during the period of stand down. This includes any leave payments. There is no requirement that an employer approve a period of annual leave during a shut down period, as long as it is not unreasonable to refuse that request for leave. As for personal leave, please see our comments below.
Can I unilaterally reduce an employee’s work hours?
Generally, no. An employer cannot unilaterally reduce an employees working hours. However, agreement may be able to be reached with an employee to temporarily reduce their working hours, subject to ensuring continued compliance with any minimum standards in the underlying industrial instruments.
The recent award amendments to the Hospitality, Restaurant and Clerks Awards provide a temporary option for a reduction in employee working hours, subject to certain requirements being met. However, for the majority of employers outside those industries, consensual reductions can only go so far. As but one example, all the negotiation in the world will not absolve an employer of their responsibility to pay the minimum hourly rates prescribed by an award or enterprise agreement. Contracts can be varied at short notice; industrial instruments cannot.
What about a mix of work and leave? For example, can we ask employees to work three days a week and take two days of annual or long service leave a week?
Yes. This is an increasingly popular option, particularly for employees who would have difficulty working from home. But again, this will need to be by consent in most cases.
What about casual employees?
As casual employees are engaged on a daily basis, if there is no work for a casual employee, there is no obligation to roster them to work. There is no need to give notice (unless their employment contract provides for notice) or to stand those employees down.
However, care must be taken with “regular” casuals who are regular and systematic, particularly if they have worked for you for more than 12-months. Any flexibility you may think you have around casuals could fall away if they could be “deemed” permanent.
Could worker’s compensation become relevant?
Yes. Like any other injury, if a worker contracted COVID-19 during their employment, it could be compensable.
The stand-down provision requires an employee to be unable to be “usefully employed”. What does this mean in practice?
This is our most frequent question and with good reason: there is little case law and the provisions are open to debate.
The critical factors that have partially guided our advice to date have included:
- whether you have been, directly or indirectly, affected by a Government shut down;
- an assessment of what roles an employee (or group of employees) could reasonably perform that are within their skill and competence (similar to “reasonable redeployment” considerations in redundancy law); and
- timing: to what extent and for how long has the work reduced, or disappeared entirely?
Please obtain advice before you consider any form of stand-down. Contrary to what many assume, a significant number of employers have not “stood-down” staff, but are granting discretionary paid leave whilst the initial impact of COVID-19 is being assessed. Assume nothing from the actions of other employers.
Can I use stand-down to compel a reduction in hours of work?
No. Stand-down is an all or nothing proposition. It is only those of you with varied modern awards (at the time of writing, those covered by Hospitality, Restaurant and Clerks Awards) that have this option available.
Can I make an employee redundant because of COVID-19?
If the employee’s position is no longer required, then it may be possible to end their employment on the basis of a genuine redundancy. If an employee is terminated due to redundancy, it is important to ensure that all relevant award obligations are complied with, as well as obligations to provide notice and severance pay (if required). It is important to seek tailored advice before proceeding to make any position redundant, to minimise the risks of an unfair dismissal claim.
What should I do if an employee tests positive for COVID-19 or is a close contact of someone who has?
If an employee is not able to work due to illness, including COVID-19, they may take paid personal leave or unpaid leave (if they have no paid leave entitlements). An employee should be required to provide proof that they are fit to return to work safely, before they return to the workplace.
Where an employee is a close contact of someone diagnosed with COVID-19 and at risk of being infected or passing the virus to others, then an employer may wish to direct them to remain absent from the workplace, until the risks of transmission have passed or minimised.
If an employee is directed by the Government to quarantine or self-isolate and cannot lawfully attend work, but is not in fact sick, they should be granted unpaid leave for the period until they can safely return to work.
However, the Fair Work Commission has also recently announced proposed changes to a large number of awards, to allow an employee (including casuals) two weeks unpaid “pandemic leave” where they are required (by government or medical authorities, or on medical advice) to self-isolate and not attend their workplace (but are not in fact sick, so not entitled to personal leave). These changes are likely to be implemented after 6 April.
What about the welfare measures being announced by the Government?
Employers should keep in mind how their decisions interact with the recent welfare measures being announced by the Government. Although questions about welfare entitlements should always be referred to the appropriate Government agency, when making difficult industrial decisions ensure you are across the assistance available to staff if stand-down or redundancies were to occur. As but one timely example, the Government recently announced “Jobkeeper” wage subsidy should be a primary consideration, in any decision making process, in the coming months.
What about personal leave during stand-down?
Watch this space, Qantas is involved in an industrial dispute on this topic. Like so many laws in this area, they are open to interpretation and debate. We will update you when we have more information.
Disclaimer and Assistance
The information in this alert is general in nature. Your considerations will vary significantly depending on industry, employees affected, and precisely how COVID-19 is affecting you. We urge you to obtain tailored advice, from one of our specialist employment lawyers, before taking any action.
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The content of this newsletter is for general information purposes only and should in no way be treated as formal legal advice.