Workforce considerations during COVID-19 lockdowns
With the introduction of Government lockdowns right across Australia, many businesses are once again required to close their doors. One of the many difficulties that businesses are facing is how to best manage its workforce. In that respect, businesses should consider the following options, each of which are addressed in further detail below:
- whether employees can work from home;
- the utilisation of annual or long service leave;
- the circumstances in which sick leave can be taken;
- standing down employees without pay;
- varying employees’ hours or rosters;
- managing redundancies and complying with redundancy obligations; and
- Government financial assistance schemes which may be available.
Working from home
For some businesses, it may be possible to direct all or most of their staff to work from home with minimal disruption.
Where this is practical having regard to the nature of the work the employee performs and the availability of technology/resources, it is likely that such a direction would constitute a lawful and reasonable direction.
Even where employees are working from home, employers are still required to comply with their work health and safety duties by taking reasonable precautions to verify that an employee’s working environment at home is safe. Where they have not done so already, all employees should be required to undertake a safety assessment process in respect of their home work environment.
Employers should also review existing policies with respect to flexible working arrangements and consider whether they are adequate.
Employers should also encourage staff to remain connected and in touch to the extent possible during the lockdown.
Utilisation of annual or long service leave
Both annual leave and long service leave may be taken by agreement between an employer and employee.
Employers can direct staff to take annual leave if permitted under the terms of applicable modern awards/enterprise agreements. Under most awards, a direction to take annual leave can be given where there is a business close down. Where an employer and employee are covered by one of the 69 modern awards which contain Schedule X as was introduced to provide flexibility during the COVID-19 pandemic (a list of eligible awards is available here), the business and the employee can agree to provide double the amount of amount of annual leave at half the pay.
Where an employee is not covered by an award or agreement, an employer may require an employee to take annual leave if the requirement would be reasonable. Arguably, depending on the circumstances facing the employer, such a direction would likely be reasonable where the business shuts down and the employee is unable to usefully work from home, or where an individual has been directed to isolate.
It is possible that employees may by agreement, take annual leave in advance of being accrued, subject to the terms of applicable awards/agreements.
Under State legislation employees may be directed to take long service leave in certain circumstances.
Employers should review the terms of employment contracts, awards and enterprise agreements and also consider staff leave accruals, so they know the circumstances in which employees can be required to take leave if necessary.
Utilisation of sick leave
Permanent employees will be entitled to access paid sick leave (subject to the usual requirements to submit substantiating evidence, such as a medical certificate) if they contract COVID-19 or are otherwise sick during the lockdown. Paid sick leave will also be available where an employee is required to care for an immediate family member or household member who has contracted COVID-19 or is otherwise sick. There is no limit on the number of days of accrued sick leave that can be taken in these circumstances. Subject to the above, there will be no entitlement for an employee to take paid sick leave as a result of a Government directed lockdown.
A casual employee who contracts COVID-19 will not be able to access any paid sick leave. A casual worker may take up to two days of unpaid carer’s leave if they need to care for an immediate family member or household member who has contracted COVID-19.
Standing down employees without pay
If a business (or part of a business) closes down (including by direction of the Government) and employees cannot be usefully employed, employees may be stood down without pay.
There is no right to stand down employees if there is useful work available for employees to do which is within the terms of their contract of employment.
Where an employer and employee are covered by one of the 69 modern awards referred to above, an employee may also be entitled to take up to 2 weeks’ unpaid pandemic leave (which can be extended upon agreement with the employer) where they are required to self-isolate or are prevented from working by Government restrictions such as lockdowns.
In essence, there is little difference in an employee taking unpaid pandemic leave or being stood down.
Varying hours or rosters
Where a business is required to vary, or scale down, their operations, an employee’s hours of work can generally only be reduced by reaching agreement with individual employees. Otherwise, an employer’s ability to reduce employees’ hours of work will depend on the terms of employee contracts of employment and awards/agreements. Employers should seek advice before implementing any changes of this nature.
Managing redundancies and complying with redundancy obligations
In the unfortunate event that businesses are required to make employees redundant, the amount of redundancy pay employees are entitled to receive will depend on their period of service and any terms in their employment contract or award/agreement.
It is possible for employers to request from the Fair Work Commission a reduction in the amount of redundancy pay required to be paid if they cannot afford to pay the full amount.
Businesses with less than 15 employees are not required to pay redundancy pay under the Fair Work Act (but may be required to do so under the terms of contracts of employment or awards/ agreements).
In the event that it may become necessary to terminate the employment of employees due to a reduction in work requirements, businesses should ensure that they:
- consider whether there are any options for redeployment within the business or associated entities;
- undertake a proper consultation process with any employees covered by an award/agreement about the current circumstances, its potential effect on the business, the potential for redundancies and interim options available to limit or delay redundancies; and
- comply with the notice of termination of employment and redundancy pay requirements under the Fair Work Act and any more generous contractual provisions.
- Taking these steps will ensure the terminations are genuine redundancies and the employees are not eligible to bring unfair dismissal claims.
Businesses should also be mindful of not dismissing employees or taking any other adverse action against them on unlawful grounds, such as age, illness or disability (i.e. because they have or had COVID-19).
Government financial assistance
Business should also ensure that they are aware of the relevant Government financial assistance schemes.
With the declaration of the majority of the Greater Adelaide Metropolitan area as a pandemic ‘declared hotspot’, individuals will be eligible for the Commonwealth Government’s COVID-19 Disaster Payment of:
- $375 if they have lost between 8 and 20 hours of work during the 7 day lockdown; and
- $600 if they have lost 20 or more hours of work during the 7 day lockdown.
While further details are yet to be released, it is understood that such payments will be paid in arrears and affected individuals will be able to apply online from the myGov site commencing 28 July 2021.
Unlike JobKeeper, the onus is on the affected employee (and not the business) to apply for payment. Accordingly, businesses should simply ensure that any affected employees are aware of the Disaster Payment scheme and how to apply.
The South Australian Government has also announced a one-off $3,000 cash grant to businesses who satisfy the following eligibility criteria:
- be based in South Australia and employ people in South Australia;
- annual turnover of $75,000 or more in 2020-21 or 2019-20, be registered for GST and have a valid ABN; and
- have a payroll of less than $10m in 2019-20 and have experienced at least 30% reduction in turnover due to the lockdown.
A $1,000 cash grant will be available instead for eligible small businesses who don’t employ staff.
The South Australian Government has also indicated that it will be providing income support payments of up to $600 for individuals, primarily in the rural or country regions who are not covered by the Commonwealth Government’s COVID-19 Disaster Payment on the basis that they do not work within a ‘declared hotspot’.
The author would like to thank associate Lachlan Chuong for his assistance with this article.
This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.