As the world enters unprecedented times, various issues have arisen as to the obligations of employers to their employees. This is especially applicable to handling employees’ rights to leave and pay.
The purpose of this article is to inform you about workplace entitlements and obligations if your workplace is ultimately affected by the outbreak of coronavirus, or COVID-19.
What is the overarching responsibility of an employer?
To meet work health and safety duties, including ensuring the health and safety of employees and other persons in the workplace.
In doing so, employees are required to consult with staff, implement appropriate hygiene and infection control measures, correctly accrue and pay employee leave entitlements, manage workplace stress and implement staff travel and isolation measures, and consider discrimination and privacy issues (including health information).
This may require the:
• scaling down of operations;
• considering stand downs or redundancy programs;
• ensuring mandated isolation decisions, such as remote working, are medically required and supported by expert advice;
• documenting all decision-making processes and ensuring proper processes and company policy is complied with
• ensure employees are treated consistency and parity where appropriate;
• ensure employees who access rights, such as the taking of personal / carer’s leave or reporting of workplace risks and complaints, are protected from reprisal action.
Can an employee take personal / carer’s leave?
Yes, in certain circumstances.
Section 96 of the Fair Work Act 2009 (Cth) (“Fair Work Act”) provides that an employee, to the exclusion of casual employees) is entitled to 10 days of personal / carer’s leave for each year of service, to allow the employee to take time off work to help them deal with personal illness, caring or family responsibilities.
Situations where personal / carer’s leave may apply include where the employee:
• has tested positive to COVID-19;
• is in Government directed or optional self-isolation and is unwell;
• is unwell with any illness or injury;
• is required to care or support a member of their immediate family or household who is sick, injured, or has an unexpected emergency including, but not limited to:
o any illness or injury;
o School closures due to COVID-19;
o Government directed isolation of the child or dependent due to COVID-19.
Can an employee take leave without pay (“LWOP”)?
Yes, subject to the discretion of the employer (as there is currently no statutory entitlement in Australia for LWOP).
With the exception of casual employees, section 87 of the Fair Work Act provides that employees are entitled to four weeks paid annual leave for every year of service (5 weeks if a shift worker). In the current climate, an employer can offer annual leave if the employee requests this and has an adequate leave balance.
Situations where LWOP might apply include where the employee:
• is in Government directed or optional self-isolation and is not unwell or has used the 10-day personal / carer’s leave entitlement or does not have an adequate annual leave balance; or
• has been unable to return home as result of border closures or being prevented from disembarking from a cruise ship.
Can an employer change an employee’s regular roster or hours of work?
Yes, so long as the employer has undertaken the consultation process with the employee.
All modern awards contain consultation provisions and the Fair Work Act require that consultation provisions are set out in all enterprise agreements. Additionally, the Fair Work Act requires all employers to consult with employees in other situations, whether or not a modern award or enterprise agreement applies.
What this means is that employers are required to consult with employees about a change to their regular roster or ordinary hours of work. In particular, employers are required to:
• provide information about the proposed change;
• invite employees to give their views about the impact of the proposed changes (including any impact it may have on their family responsibilities); and
• consider the employees’ views about the impact of the change.
Modern awards and enterprise agreements may also have set out additional provisions about changing rosters or ordinary hours of work.
Can an employer cut a permanent employee’s ordinary hours?
Yes, so long as the employee has agreed to it.
An employer and employee may agree to an ‘individual flexibility arrangement’ (“IFA”) which allows the employee and employer to vary terms in their award or enterprise agreement relating to when work is performed. At a minimum, an IFA:
• only applies to an individual employee;
• must be genuinely agreed to by the employer and employee;
• result in the employee being better off overall than would have been the case if no IFA was agreed;
• must be in writing and signed by the employee and employer;
• must set out how the IFA may be terminated by the employee or employer; and
• be provided to the employee within 14 days after it is agreed to.
Can an employee be stood down from their employment?
A common question has been whether employers can lawfully stand down and not pay employees during the COVID-19 crisis.
The short answer is yes.
In the absence of an express contractual term, at common law there is no general right to stand down or suspend an employee without pay. Section 524 of the Fair Work Act, however, relieves employers of the obligation to pay wages to employees where employers have stood employees down for a limited number of prescribed reasons, including a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
Before standing down an employee, an employer must satisfy itself that there is no useful work for the employee to perform. An employee can be asked to do work other than their normal duties, provided they are physically capable and have the necessary experience and qualifications, and it would not involve any safety risks.
An employee must not be stood down if there is still work that could be performed by the employee and the employer is able to obtain some benefit or value for the work.
If employers cannot satisfy the elements above, they may be exposed to a dispute application under section 526 of the Fair Work Act.
Overall, stand down is a drastic step for any business as it deprives employees of an income for an indeterminate period and should be a last resort for an employer. Inviting employees to access accrued annual or long service leave entitlements as an alternative may be beneficial in that it offers employees the option of maintaining an income and it reduces the employer’s leave liabilities.
What happens if the business subject to an enterprise agreement or contract of employment?
While the rules apply under the Fair Work Act, any relevant enterprise agreements or contracts of employment must be checked as they may have further provisions which impose additional requirements that an employer must meet when dealing with stand downs. These provisions may impose additional requirements that an employer must meet before standing down employees.
Where an enterprise agreement or contract of employment deals with the stand down in the same circumstances as section 524, the enterprise agreement or contract of employment prevails.
Are redundancy programs necessary?
Depending on the duration of COVID-19, business continuity requirements may require the implementation of redundancy programs. Redundancy is a form of employment termination, but rather than being a fault-based dismissal, redundancy is usually caused by factors such as economic conditions or business efficiency.
Part 2-2 of the Fair Work Act provides a statutory entitlement to redundancy pay for most national system employees. Generally, where employees have been employed for less than 12 months’ continuous service with the employer or the business has less than 15 employees, the business is excluded from having to pay redundancy (unless a modern award, enterprise agreement or contract of employment has more generous terms).
If a national system employee also has a right to redundancy pay under a contract of employment, modern award, enterprise agreement, or state legislation, these instruments remain applicable to the employee to the extent they confer more generous redundancy terms than the terms set down in the NES.
To be considered a ‘genuine redundancy’ for the purposes of the Fair Work Act:
• the employee’s job must no longer be required to be performed by anyone, because of changes in the operational requirements of the employer’s business; and
• the employer must have complied with any obligation in an applicable modern award or enterprise agreement to consult about the redundancy,
What if an employee is a casual employee?
At common law there is no obligation on an employer to provide a casual employee with work to perform. A casual employee also does not commit to all work an employer might offer.
Casual employees are not entitled to paid personal / carer’s leave under the NES but if the leave is required to take care of a dependent who is ill, section 102 of the Fair Work Act provides the employee may be entitled to unpaid carer’s leave. If the illness of the dependent is life threatening, section 104 provides that casual employees may also access 2 days’ unpaid compassionate leave.
Employees such as casuals may be entitled to payment from ad-hoc welfare or support initiatives provided by the ATO or the Australian Government Department of Social Services.
What are the rights of independent contractors?
Independent contractors are not employees and do not have paid leave entitlements under the Fair Work Act.
Like casual employees, independent contractors may be entitled to payment from ad-hoc welfare or support initiatives provided by the ATO or the Australian Government Department of Social Services.