When the COVID-19 pandemic began to unfold and travel restrictions were confined to travellers coming from Wuhan/Hubei province, ground zero for the pandemic, employers were concerned about the type of leave that their employees should be paid should they be directed either by the employer or by the government, to self-isolate.
The advice provided at the time was that those who were directed by the government to self-isolate should have their absence from work processed as paid personal leave (sick leave and carer’s leave), and if they had exhausted personal leave accruals, the leave could be unpaid. For those employers who were taking additional prudential measures by directing employees to self-isolate even if they had not travelled from Wuhan, the advice was that those employees should be paid “special leave” and should not be asked to dip into their personal leave or annual leave entitlements.
However, since then, the situation has progressed rapidly and it is becoming increasingly difficult to require employers to make “special leave” payments on a much broader scale, or for employees to go without pay, for an indefinite period of time.
Employers now have a whole gamut of factors they need to consider, and to consider quickly, in order to protect their employees whilst attempting to maintain business viability.
Employers should ensure they turn their minds to the following considerations to ensure they are adequately prepared for the COVID-19 pandemic which is likely to remain unresolved for the next few months:
- working from home
- travelling to work
- attendance at events
- overseas travel
- leave arrangements: paid, unpaid, special leave or annual leave?
- performance management and disciplinary action
- assistance for businesses
Working from home
Employers still have work health and safety obligations towards employees who are working from home. As more and more businesses are directing employees to work from home where possible, employers should ensure they have a working from home policy in place that is up to date, and accessible to all employees.
Employers should ensure that employees have safe, ergonomic workplaces set up from home and that employees are aware of which assets and resources will be provided by the employer. If employees are using their personal assets and resources for business purposes, the policy should also set out whether the employer will reimburse the employee for business related expenses, and if so, how these expenses are to be monitored and authorised.
During this unprecedented situation, employees may be left feeling quite uncertain and anxious, and working from home in an isolated environment can exacerbate these feelings. For those employees with dependents at home, such as the elderly or young children, attempting to work from home, while caring for others, and meeting the ongoing demands of their employer and clients, can easily become overwhelming, especially if the employee is also concerned about potentially losing their job in the face of increasing rates of unemployment and projections of economic downturn worse than the Global Financial Crisis (GFC).
Employers should therefore also take steps to ensure the mental wellbeing of their employees and this can include taking steps to check in with employees to see how they are doing and ensuring the additional responsibilities of those with carer responsibilities are considered and managed while also managing effective performance of the required work. Flexibility all round will be important.
Travelling to work
Where employees are unable to work from home or are required to travel into the office from time to time, employers should consider taking steps to reduce the need for employees to travel on public transport. This could include staggering start and finish times to avoid the need to travel during peak hours. If possible, it could also include making on-site parking available to more employees, to encourage employees to drive in to work.
Attendance at events
Many employers are cancelling scheduled face-to-face events, or making them available by live online streaming. Employers should take steps to ensure that all non-essential employee gatherings are cancelled or reduced in size, so as to encourage social distancing where possible.
Employers should also consider the safety of the attendees at their events and should consider what claims their public liability insurers will and will not cover in pandemic situations, should the events proceed, or losses be incurred for cancelled events. Potential attendees at business premises should be warned not to visit if they have any symptoms of cold, flu or the virus.
As of yesterday 17 March 2020, The Department of Foreign Affairs and Trade has contacted all Australians overseas and have encouraged them to return to Australia as soon as possible. As more countries impose travel bans, it is prudent for employers to take steps to cancel all non-essential work-related overseas travel, until further notice. This is because if an employee is impacted by these travel bans and they were directed to travel overseas for a work related purpose, the employer is still responsible for the employee’s safety and wellbeing while overseas, and this cannot be guaranteed in light of daily changes to travel bans. It would be unreasonable for an employer to direct an employee to travel overseas for a non-essential work event, in light of recent global travel bans.
Leave arrangements: paid, unpaid, special leave or annual leave?
As more employees are affected by the COVID-19 self isolation requirements, it is becoming more difficult for employers to pay “special leave” to each employee that is unable to attend work, whilst maintaining financial viability of the business. At the same time, employers are aware of the need for employees to continue to receive wages in order to meet personal financial stresses of mortgages, medical costs and basic food and health items.
For employees required to self isolate as a result of government action, who would therefore be on unpaid leave, but who have annual leave or long service leave or personal leave accruals, employers should consider allowing employees to use those sources of leave, by agreement (which should be recorded in writing, even if only by email. While personal leave is not applicable to an employee who is not sick or caring for a sick family member, under the strict terms of the Fair Work Act, in the context of a public health emergency, and quarantine resulting from that, bending the rules in a manner beneficial to an employee who has no other source of income continuance is unlikely to have negative consequences. This approach will assist employers in reducing the leave liability they have on their books, and will in any event, in the case of annual or long service leave, be payments that will need to be paid by the employer at the end of employment.
If businesses are forced to shut down or reduce operations, because of disruption to supply chains or other effects of the coronavirus emergency, section 524(1)(c) of the Fair Work Act 2009 (Cth) (“FW Act”) enables an employer to stand down employees for a stoppage of work for any cause for which the employer cannot reasonably be held responsible and an employer is not required to pay an employee in these situations. However, this section applies only if the employee’s employment contract or enterprise agreement, does not contain a clause in relation to shut downs. Employers should seek advice about section 524(1)(c) of the FW Act before relying on it. If the reason for closure is financial stress, that would result in redundancy rather than a stand-down.
The government is calling for businesses, where possible, to minimise the need for redundancies as businesses will still require positions to be filled, when the social and economic effects of the COVID-19 pandemic begin to ease. At this stage, it is unclear when that will be, although the current situation is forecast to carry on for a few months at least.
Many businesses in the tourism and aviation industry, as well as businesses that were struggling prior to the pandemic (including many businesses in the tourism industry already impacted by the bushfires), are facing potential insolvency and the need to implement redundancies in an effort to reduce costs in the face of decreasing revenue. Directors of corporations should be mindful of their ongoing obligations to prevent insolvent trading.
Employees who are covered by a Modern Award, are entitled to a consultation period before the redundancy is effected. As a matter of best practice, employers should follow a consultation period prior to any redundancy, regardless of if their employees are Award covered or not. The purpose of a consultation period is for the employer to inform the affected employees about the proposed redundancy, and to give the employee an opportunity to provide any information or solutions that may reduce the impact of the redundancy on them. Potential solutions could include:
- reduced hours or days
- utilising annual leave or long service leave
- shut down periods
- alternative duties
- considering financial assistance packages the employer might be entitled to from the government
- Any redundancies should be implemented carefully as there is a risk of unfair dismissal/adverse action claims if implemented incorrectly.
Employers may revisit some of the options adopted during the early stages of the Global Financial Crisis (GFC) in 2008, by seeking agreement
from the whole workforce, or a particular section of the workforce, to shift to reduced days or hours for a period, to try to weather
the storm without redundancies.
Assistance for businesses
The government recently announced a Boosting cash flow for employers stimulus package, in addition to other economic stimulus packages to assist with the economic impact of COVID-19. Those businesses also effected by the recent bushfires may also have access to bushfire relief payments.
The package provides up to $25,000 to small and medium sized businesses, with a minimum payment of $2,000 for eligible businesses, being those with a turnover of less than $50 million, that employ staff. The payment will be tax free.
These payments may assist employers with being able to hold onto staff rather than implement redundancies, and may also assist employers with “special leave” payments to employees. Click here for information on financial assistance for businesses.
Performance management and disciplinary action
Employers who were in the midst of performance managing or disciplining an employee, may find themselves wondering if and how they should proceed. The COVID-19 pandemic has heightened concerns amongst employees of job security and their personal wellbeing, as well as those of their family members. In these circumstances, the potential for an employee to feel aggrieved during a performance management or disciplinary process can be heightened, which can increase the likelihood of an unfair dismissal, general protections or workers compensation. Employers facing these situations should proceed carefully and obtain legal advice.
Detailed information about COVID-19 and employer obligations can be found on the Fair Work Ombudsman’s website.
This article is a guide only and is based on advice at the time of writing, being 18 March 2020. Employers should seek legal advice about their specific circumstances. Please do not hesitate to get in touch with a lawyer in Coleman Greig’s Employment Law team, who would be more than happy to assist you.
Author: Lisa Qiu, Coleman Greig. (PH: +61 2 9895 9207.)