17/03/2020

The world is struggling to meet the challenges presented by the rapid spread of COVID-19.  Politicians and policy makers have been coming to grips with the effects of the virus on the nation’s health system and economy.

Employers too have been and are facing challenges posed by the virus.  The initial response of employers involved taking steps to meet work health and safety (WHS) obligations and provide a safe working environment.  However, as the economic side-effects of the virus become clearer and Australian Governments impose mandatory quarantine periods, employers will face difficult choices in managing staff including during any economic down-turn.

In this article, we examine the options available to employers to comply with their WHS obligations and the implications of those options for employee entitlements.

WHS compliance

In each State and Territory, employers have a duty of care to take reasonably practicable steps to ensure the health and safety of employees, contractors and others whilst at work.  Whilst the duty is expressed differently in some jurisdictions, the duty generally requires employers to assess the risk posed by the virus and take reasonably practicable measures to ensure employee health and safety. 

This duty includes providing information and education to employees about the risks of the virus, keeping up to date with medical advice on the virus (see www.health.gov.au), and developing systems for dealing with the virus, such as sanitisation measures, interstate and overseas travel rules and changes to business as usual operations at risk of disruption by the virus.

WHS compliance is particularly an issue for employers where an employee:

  • reports symptoms of the virus or is diagnosed with the virus; and
  • an employee returns from travel (in particular where returning from overseas) or has had contact with someone who has the virus, whether at work or elsewhere.

In order to comply with their WHS obligations in respect of all of their employees, employers may lawfully direct employees not to attend work or work from home as a strategy to quarantine employees from potential exposure to the virus.  The right to direct is subject to an employee’s terms and conditions and may be subject to challenge in limited circumstances only (such as employee’s paid per work product produced). 

Employee entitlements

Personal/carer’s leave: The starting point when considering employee entitlements is the permanent employee who:

  • contracts the virus; or
  • is providing care or support to a member of their immediate family or household who has contracted the virus or because of an unexpected emergency affecting the member.

In these circumstances, an employee who notifies their employer and substantiates the absence will be entitled to any untaken personal/carer’s leave (i.e. sick leave).  If the employee has exhausted their paid personal/carer’s leave entitlement, they are not entitled to further payment unless other forms of paid leave are available. 

If schools or child care centres are closed to help contain the virus, some employees may want to  (or have no other option but to) take leave to care for their children - where the employee or child have not contracted the virus.  Employees in this scenario will not be entitled to personal/carer’s leave. However, the employee will be entitled to personal/carer’s leave to deal with an unexpected emergency if the school or centre closes at short notice and their children must stay at home.  Carer’s leave in that situation would likely only be justified for a limited period until employees make alternative arrangements and the emergency passes.

Employer directed quarantine: An employee who is directed by their employer into quarantine at home as a precautionary measure is entitled to their ordinary wages for their ordinary hours of work. This is the case whether or not the employee is able to carry out work from home.   If a quarantined employee becomes ill, we recommend that employees are required to notify and substantiate their illness. The employee should then be paid as personal/carer’s leave rather than wages.

Employees unable to work: As a result of the government response to the virus, some employees are in effect prohibited from attending work.  For example, the NSW Government issued an order on 16 March 2020 under the NSW Public Health Act 2010 which makes it an offence punishable by 6 months prison and/or a fine of up to $11,000 for overseas travellers entering NSW who fail to self-quarantine for 14 days.  

An employee is entitled to their wages by being ready, willing and able to serve their employer as directed.  For this reason, an employee who is able to work and is directed by their employer into quarantine as a precautionary measure is entitled to be paid.  However, it’s likely that an employee is unable to work if the employee was legally required to self-isolate or face being charged with an offence by presenting for work or working in breach of the Government’s quarantine order.

In these circumstances, the available options in respect of the mandatory quarantine are:

  • the employee works from home and continues to receive their normal wages;
  • the employee applies for and takes any available annual leave;
  • the employer pays the employee their normal wages despite the absence of an obligation to do so;
  • the employer does not pay the employee because the employee is not able to perform service to the employer as and when directed during the mandatory quarantine.

Employee refuses to work: An employee will not be entitled to wages or personal/carer’s leave if they remain at home as a precautionary measure provided that they are otherwise fit to work and not able to work from home.  It may be arguable that an employee who’s at greater risk from the virus (eg because they have a compromised immunity from another condition) may be entitled to personal/carer’s leave on the basis of an existing illness or injury although we are not aware that this has been tested.   Their entitlement would be subject to providing notice and substantiating their compromised immunity related illness.

Employees with excessive annual leave: Other options may be available to employers to effect the absence of employees from work: 

  • employers may direct award covered employees to take annual leave where the employee has more than 8 weeks leave, and the resulting balance is not less than 6 weeks. Certain procedural steps are required to be taken depending on the provisions of the modern award. For example, the Clerks Private Sector Award requires employers to provide notice of at least 8 weeks (but no more than 12 months’ notice) to employees to take the leave;
  • modern awards may provide for the close down of an employer’s business and for employees to take annual leave during that close down. For example, the Clerks Private Sector Award and the General Retail Industry Award enable an employer, with 4 weeks’ prior notice, to require employees to take leave as part of the close down of the employer’s operations.  Other modern awards such as the Manufacturing and Transport Industry modern awards allow a close down of some or all of the employer’s enterprise but no more than twice per year;
  • employees who are not covered by a modern award or enterprise agreement may be directed to take annual leave provided that the requirement is reasonable.  A requirement to take annual leave may be reasonable if, for example the employee has accrued an excessive amount of paid annual leave or the employer's enterprise is being shut down for a period.

Stand down: under the Fair Work Act, an employer may stand down employees without pay if:

  • the employees cannot be usefully employed because of a stoppage of work; and
  • the employer cannot reasonably be held responsible for the stoppage.

This right is most clearly applied to an employer whose premises are the subject of a natural disaster which damage the premises and create safety risks (such as floods and blackouts).  There is no decision of the Fair Work Commission which explains how the stand-down provision might be applied to a stoppage of work caused by the risk that employees may contract a virus. 

Unpaid stand-down may be an option for some employers provided that the stoppage of work broadly affects a significant part of an employer’s business or the entire business (such as a mass quarantine order or where manufacturing ceases as a result of a supply issue).  However, an employer is likely to attract significant industrial, political and media attention if standing down employees without pay during the current crisis.  Any decision to stand-down would need to be carefully considered taking these factors into account.

Casual employees: are not entitled to be paid in the same circumstances when a permanent employee is entitled to personal/carer’s leave.  Casual employees are only entitled to 2 days’ unpaid carer’s leave in respect of each occasion they qualify for the leave. 

A casual is not entitled to payment if not rostered to work.  However, casuals are entitled to a minimum payment under their modern award (usually for 3 hours’ work) if directed to cease work before the end of their shift.

As some casuals working on a regular and systematic basis qualify to make an unfair dismissal claim, employers should follow a proper process if reducing their hours or not including casual workers on the roster.  We are able to help with advice if this situation arises.

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This knowledge hub collates important articles and legal advice on various aspects of COVID-19 on how it may impact your business.