The Employment Law Implications of COVID-19

COVID-19 - Employment Law Implications Email sent to www.realestatexcellence.com.au from Carter Newell Lawyers

Andrew Shute, Partner and Lara Radik, Special Counsel

The World Health Organisation has declared COVID-19 (the Novel Coronavirus) a pandemic. So what does that mean for employment rights and obligations?

March 2020 (email received by Real Estate Excellence 18th March 2020)

At the outset, please note the following in respect of the information in this alert:

  • It is current at the time of publishing. Due to the rapidly evolving nature of the guidance surrounding self-isolation, it is prudent to regularly check the information available on the Fair Work Ombudsman website and the Department of Health website;
  • It is general in nature. Additional rights or obligations may arise under an award, enterprise agreement, employment contract or workplace policy applying to a particular employment relationship. It also remains possible that Parliament may enact legislation to address the impact of COVID-19 in respect of employment matters;
  • It does not apply to contractors. Where a business has engaged contractors, the terms of the contract should be considered on a case by case basis in determining whether the contractor’s services can be varied, suspended or terminated.

What happens if an employee tests positive for coronavirus?

It is important that employers seek immediate advice from health authorities if there is a confirmed case of COVID-19 in the workplace. Employees who have contracted the virus cannot attend the workplace, and the employer can direct the employee to stay away from work and to obtain medical clearance before returning to the workplace. In making such directions, employers should ensure their actions are reasonable in the circumstances and are supported by medical evidence or advice.

Full time and part time employees who have contracted COVID-19 are entitled to paid sick leave for the duration of their incapacity for work (assuming the employee has sufficient accrued personal leave).

An employer is entitled to request a medical certificate or other evidence of the employee’s incapacity for work.

What happens if an employee’s family member tests positive for coronavirus?

If a member of an employee’s household or immediate family has contracted the virus and requires care, the employee is entitled to paid personal (i.e. carer’s) leave (assuming the employee has sufficient accrued personal leave).

The Fair Work Act further contemplates that paid personal leave is available when a member of an employee’s household or immediate family requires care or support because of an unexpected emergency affecting the member. In circumstances where an emergency has been declared in several Australian states and territories, it is arguable that employees are entitled to paid personal leave in order to support any members of their household or immediate family affected by COVID-19 (regardless of whether the member of their household or immediate family is ill).

An employee in these circumstances will be required to self-isolate in any event (discussed in further detail below) and should be permitted to work from home or use their accrued leave entitlements for the duration of the self-isolation period.

Whilst an employer cannot force an employee to take paid personal leave, the employee is not entitled to be paid unless they use their paid leave entitlements.

Casual employees are entitled to two days of unpaid personal (i.e. carer’s) leave per occasion when a member of their household or immediate family requires care and should be permitted to decline shifts for the duration of any self-isolation period.

An employer is entitled to request a medical certificate or other evidence to support an employee’s request for personal leave.

What happens if an employee is stuck overseas or is unable to return to work due to quarantine or self-isolation?

Where an employee was sent overseas for work, and is prevented from returning to Australia, the affected employee will be entitled to full pay.

Where an employee is stuck overseas following personal travel, they are not entitled to be paid unless they rely on paid leave entitlements. At an employer’s discretion, the employer may permit the employee to work remotely from overseas or may negotiate paid or unpaid leave arrangements.

All people entering Australia from midnight on 15 March 2020 are required to self-isolate for 14 days. The Fair Work Act does not specifically cover these circumstances, so it is advised that an arrangement be negotiated between the employer and the employee. Such arrangements may include:

  • Permitting an employee to work from home or another location;
  • Permitting an employee to access any accrued leave entitlements; and
  • Any other paid or unpaid leave arrangement (including, for example, allowing employees to take annual leave in advance of accrual).

Any person who has been in close contact1 with someone who has a confirmed case of COVID-19 must self-isolate at home and cannot return to work until receiving medical clearance. As explained above, such an employee may be entitled to access paid personal (i.e. carer’s) leave. If paid personal leave is not available or not appropriate (for example, because the employee lives alone and had close contact with a friend who tested positive for COVID-19), work from home or leave arrangements should be negotiated between the employer and the employee.

What happens if an employee chooses to stay home as a precautionary measure?

Any person who has been in casual contact2 with someone who has a confirmed case of COVID-19 may continue to attend work while they remain well. Any such person will be required to self-isolate if they begin to experience symptoms.

Employees who choose to stay home following a casual contact or for other precautionary reasons may seek to negotiate an arrangement with their employer taking into account what is reasonably practicable in the circumstances (such as working from home). Alternatively, the employee may choose to take some form of unpaid or paid leave. In this case, normal leave application processes will apply. If the employee is not relying on paid leave entitlements, the employee is not entitled to be paid.

An employee does not have an entitlement to stay home or refuse to perform work unless the employee has a reasonable concern about a serious risk to their health or safety from immediate or imminent exposure to a hazard. Employers should take a common-sense approach to any such scenario, including consideration as to whether:

  • The employee is in a high risk category; or
  • The employee is in regular contact with a person in a high risk category.

It will almost always be unreasonable for an employer to refuse an employee’s request to stay home on a precautionary basis if the employee is willing to take unpaid leave for the duration of their absence.

Can an employer direct an employee to stay away from work as a precautionary measure?

The model Work Health and Safety (WHS) laws do not expressly permit an employer to direct a worker to stay away from work as a precautionary measure. The WHS laws do, however, require employers to take reasonably practicable steps to ensure the health and safety of their workers and others at the workplace. This duty requires identifying risks at the workplace and doing what is reasonably practicable to eliminate or minimise those risks. In other words, employers are required to undertake a risk assessment taking into account all of the relevant information from the health authorities and the prevailing circumstances at the workplace.

Depending on the circumstances, directing workers and other people to stay away from the workplace as a precautionary measure may be considered a reasonably practicable step in eliminating or minimising the risk of the virus spreading, as well as minimising other risks that may be created by the virus (including physical, psychological or other harm). Particularly where employees have the ability to work from home, a risk assessment conducted by the employer may point towards a requirement that all such employees work remotely.

In other circumstances, directing employees to stay away from work may not be reasonably practicable, particularly where employees do not have the ability to work from home. In these circumstances, there may be other controls an employer may implement in order to minimise the risk of the virus spreading (including increased cleaning arrangements, and supply of hand sanitizer, gloves, etc.) and minimising other risks created by the virus (including more regular paid breaks, provision of counselling to employees, etc.).

In deciding what steps are reasonably practicable in a particular workplace, it is essential that the employer:

  • considers the specific context of the workplace; and
  • consults with employees about the most suitable approach to be taken to minimise the risk presented by COVID-19.

What should an employer consider when directing employees to work from home?

In addition to conducting a risk assessment (as outlined above), employers should review their obligations under any applicable enterprise agreements, awards, employment contracts or workplace policies. Employers should consider the nature of the work, and whether it is suitable for the employee to do at home. Employers should be aware that WHS laws still apply when an employee is working from home, and employers must therefore take reasonably practicable steps to ensure home workspaces are without risks to health and safety.

What if I need to make employees redundant or reduce working hours?

All awards and enterprise agreements impose obligations on employers to consult with employees prior to any major changes, such as redundancies or reduced hours. These consultation processes require the employer to provide written notice to any award or agreement-covered employees who are likely to be affected by the changes, and to have open discussion about steps that could be taken to avoid or minimise the impact of the changes on employees.

Avenues which should be explored in order to avoid or minimise the impact of redundancies or reduced hours may include:

  • Inviting employees to volunteer for redundancies or reduced hours; and
  • Inviting employees to voluntarily take paid or unpaid leave.

Can an employer enforce a shut down period or stand down employees without pay?

A shut down is when a business temporarily closes during slow periods of the year, such as Christmas and New Year. Some awards or enterprise agreements allow for more than one shut down period per year. Employers should consult the applicable award or enterprise agreement governing their business to check whether an additional shut down period is allowed. During a shut down period, employers can direct their employees to take annual leave (or unpaid leave if an employee has exhausted their annual leave entitlements).

An employer may stand down an employee during a period in which the employee cannot usefully be employed due to circumstances outside of the employer’s control. In these circumstances, section 524 of the Fair Work Act allows an employer to stand down an employee without pay. It is likely that any unpaid stand down due to COVID-19 will be closely scrutinised, so employers should exercise caution and seek advice before doing so.

Can an employer direct employees not to travel?

Employers can direct employees not to engage in work-related travel. In normal circumstances, however, it is unlikely that employers will be able to direct an employee not to engage in personal travel. In the context of COVID-19, it is reasonable for an employer to require an employee to abide by any limitations on travel imposed by the Australian Government.

Can an employer refuse an annual leave request if an employee is planning to travel overseas?

Pursuant to section 88 of the Fair Work Act, an employer can refuse an employee’s annual leave request if the refusal is reasonable. If an employee is planning to travel overseas during a period of annual leave, there is a strong argument that an employer could reasonably:

  • refuse the annual leave request on the basis of operational requirements, noting the employee will need to comply with the mandated 14 day self-isolation period imposed by the Australian Government for people entering Australia; or
  • make approval of the leave request conditional on the employee’s agreement to take either annual leave or unpaid leave for the duration of the mandated 14 day self-isolation period (if work from home arrangements cannot be facilitated).

What entitlements do employees have if schools or child care centres are closed?

The Fair Work Ombudsman is yet to issue any guidance on this issue. Ideally, employees should be permitted to work from home. If this is not possible (either because the employment is not suited to work from home arrangements, or because the presence of children in the house will inhibit the employee’s ability to complete their work), employees will likely be entitled to access any accrued personal (i.e. carer’s) leave entitlements. As outlined above, an employee is entitled to paid personal leave where a member of the employee’s immediate family or household requires care or support because of an unexpected emergency. Noting several state and territory governments have declared a state of emergency, there is a strong argument that any closure of schools or child care centres will result in a need to care for a child due to an unexpected emergency.

Once any personal leave entitlements are exhausted, the employee would be entitled to any accrued annual leave. In the absence of that, the employee would be required to take unpaid leave.

Can an employee make a workers’ compensation claim if they contract coronavirus in the workplace?

The workers’ compensation schemes differ across states and territories. There are, however, some common elements that would apply to COVID-19. These include the following prerequisites for a valid claim:

  • The worker is covered by the scheme;
  • The worker has an injury or illness covered by the scheme; and
  • The worker’s injury or illness arose out of, or in the course of, their employment.

Whether a claim for contracting COVID-19 will be covered by workers’ compensation will depend on the individual circumstances of the case and the applicable state or territory law. In many circumstances, it will be difficult for an employee to prove that the virus was contracted in the course of employment. This difficulty will be amplified as confirmed cases grow and the spread of the virus through social contact continues.

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1 There is a broad definition of close contact, which includes having more than 15 minutes face-to-face contact with a confirmed case, spending more than two hours in an enclosed space with a confirmed case, living in the same household as a confirmed case, and having direct contact with the body fluids of a confirmed case. Ordinarily, health authorities will contact all identified close contacts of persons who test positive to COVID-19 to enforce self-isolation measures.
2 A casual contact occurs where a person has had less than 15 minutes face-to-face contact with a confirmed case in the 24 hours prior to the onset of their symptoms, or who has shared a close space with a confirmed case for less than two hours in the 24 hours prior to the onset of their symptoms.

This article may provide CPD/CLE/CIP points through your relevant industry organisation.