Important Employment matters for all employers to consider:
- Urgent action needed to take advantage of Superannuation Guarantee Amnesty
- Clerks Private Sector Award varied in response to the COVID-19 pandemic
- (Not-so) long service leave in New South Wales - new COVID-19 legislation
- Modern award changes during COVID-19 pandemic
- To stand down or not? That is the question for many employers
- Stand downs and redundancies: are there any other options for employers, in light of COVID-19?
- Who are Essential Travellers for COVID-19 interstate border restrictions?
- FAQ: COVID-19 (Coronavirus) - Employer rights and obligations
- Employer obligations in the time of coronavirus (COVID-19)
- Investigating workplace complaints - who should do it and why?
- COVID-19 and its impacts on workplace leave entitlements
Urgent action needed to take advantage of Superannuation Guarantee Amnesty
The Federal Government has long been concerned with the "superannuation gap". This is the difference between the superannuation guarantee contributions that employers have been paying on behalf of workers and what they are required to pay under the superannuation guarantee regime.
For the six years ended 30 June 2017, the ATO has estimated the superannuation gap at $2.3 billion – an enormous figure given that it is calculated after taking into account the benefit of contributions made as result of ATO audit activity.
What is the Superannuation Guarantee Amnesty?
On Friday 6 March 2020, the Treasury Laws Amendment (Recovering Unpaid Superannuation) Act 2019 received Royal Assent. It provides for an amnesty for rectifying superannuation guarantee errors made for periods up to 31 March 2018.
The amnesty period ends on 7 September 2020.
What beneficial treatment is available to employers under the Superannuation Guarantee Amnesty?
Under the superannuation guarantee law, where an employer does not make the required superannuation contributions to their employees' superannuation funds by the 28th day after the end of every quarter they are liable to pay superannuation guarantee charge (SGC) to the ATO.
Unlike superannuation contributions, SGC is not deductible for income tax purposes. Further a $20 administration fee is imposed for each employee in respect of whom superannuation has been underpaid.
In addition, "nominal interest" of 10% per annum is imposed together with the possibility of culpability penalties of up to 200% of the superannuation underpaid.
Employers that make voluntary disclosures during the amnesty period and qualify for the amnesty:
- can claim a tax deduction for the unpaid SGC paid that is actually paid to the ATO by 7 September 2020;
- will not be required to pay the $20 per person per quarter administration fee; and
- will not be subject to any culpability penalties.
What employers must do to qualify for the Superannuation Guarantee Amnesty
To qualify for the amnesty, an employer:
- must voluntarily disclose the SG shortfall to the ATO and the SG shortfall must arise in a period from 1 July 1992 to 31 March 2018;
- must not have been informed by the Commissioner of Taxation (Commissioner) at any time prior to the disclosure, that the Commissioner is examining, or intends to examine, the employer's compliance to pay the SG charge; and
- must provide the information regarding the SG shortfall in the approved SG amnesty form.
Why should employers take advantage of the Superannuation Guarantee Amnesty?
The ATO is continuing to conduct reviews and audits in respect of employers failing to pay their employees' superannuation and will continue to do so once the amnesty is over.
The amnesty represents a one-off opportunity to remediate any underpayments in a way that is financially palatable. The tax deductibility of the amounts paid under the amnesty is a critical feature in achieving that outcome.
What happens after the Superannuation Guarantee Amnesty is over?
Once the amnesty is over, amounts paid as SGC will revert to being non deductible and the administration charge will be imposed.
An important change, however, will occur with culpability penalty.
Whilst the prospect has always existed that a culpability penalty of up to 200% would be imposed, it generally has not been.
Once the amnesty is over a culpability penalty of a minimum of 100% will be imposed on any SGC bill.
The Commissioner of Taxation will have no power to remit the penalty to below 100% unless the Commissioner is satisfied that "exceptional circumstances" prevented the employer disclosing the information relevant to the SG shortfall during the amnesty period.
It is expected that the Commissioner will apply the judicial interpretation of "exceptional circumstances" and therefore "exceptional circumstances" for employers will not include such matters as:
- receiving poor professional advice;
- being unaware of having a SG shortfall for a quarter during the amnesty period; or
- being ignorant of the amnesty and associated penalties.
What are the next steps?
Employers should carefully check to see whether they have made the correct superannuation contributions in respect of their employees and, if not, take advantage of this amnesty.
Often, superannuation underpayments are a result of systemic errors or misunderstandings in the way that the law applies to a business. These errors can involve failures to pay superannuation for individual contractors, failure to make contributions on time and failure to properly calculate ordinary time earnings. The liability attached to these errors can quickly mount.
Please contact us if you are unsure about whether you have an SG shortfall to declare to the ATO and if you require further advice about the information that is to be disclosed to the ATO in order to take advantage of the amnesty.
Clerks Private Sector Award varied in response to the COVID-19 pandemic
On Saturday 28 March 2020, the Fair Work Commission made its second determination in an effort to preserve the ongoing viability of businesses and jobs in response to the challenges being experienced by employers and employees as a result of the COVID-19 pandemic. This determination inserted a COVID-19 flexibility schedule into the Clerks Private Sector Award 2010 (Award).
We have set out the key variations to the Award that commenced on 28 March 2020 below.
Increased operational flexibility
Where necessary, an employer may direct employees to perform alternative duties that are within their skill and competency regardless of their classification, provided that the duties are safe, and the employee is licensed and qualified to perform them.
The hourly rate for employees who perform duties outside of their usual classification will not be able to be reduced as a result of being directed to perform the alternative duties.
Part-time employees working from home
Part-time employees who are working from home by agreement with the employer because of measures in response to the COVID-19 pandemic are required to be rostered for a minimum of two consecutive hours on any shift.
Casual employees working from home
Casual employees who are working from home by agreement with an employer because of measures in response to the COVID-19 pandemic are entitled to a minimum payment of two hours' work at the appropriate rate.
Ordinary hours of work for employees working from home
The spread of ordinary hours of work for day workers can be varied by agreement between an employer and its employees to between 6.00 am and 11.00 pm, Monday to Friday and between 7.00 am and 12.30 pm on Saturday, for employees working from home by agreement with the employer in response to the COVID-19 pandemic.
Day workers will not be considered to be shift workers for the purposes of any penalties, loadings or allowances under the Award.
Temporary reduction in ordinary hours by agreement
An employer and the full-time and part-time employees in a workplace or section of a workplace, may agree to temporarily reduce ordinary hours of work for those employees for a specified period while the changes in response to the COVID-19 pandemic are in operation but only with the approval of at least 75% of the affected employees.
The support of employees needs to be determined by a vote of employees and, in order for the vote to be valid, the employer must comply with the requirements in the flexibility schedule.
For full time and part-time employees, ordinary hours of work may be temporarily reduced to not fewer than 75% of the ordinary hours applicable to those employees immediately before the implementation of the temporary reduction in ordinary hours.
Where there is an agreement to temporarily reduce ordinary hours of work, the employee's ordinary hourly rate will be maintained but the employee will be paid on a pro-rata basis.
An employer and an individual employee are not prevented from agreeing in writing (including by electronic means) to reduce hours or to have an employee move temporarily from full-time to part-time hours of work, with a proportionate reduction in the minimum weekly wage.
Where an employee's ordinary hours have been temporarily reduced, the employer must:
- not unreasonably refuse a request by the employee to engage in reasonable secondary employment
- consider all reasonable employee requests for training, professional development or study leave.
All relevant accruals and all entitlements on termination of employment will continue to be based on each employee's weekly ordinary hours of work before the commencement of the flexibility schedule.
The flexibility schedule allows an employer and employee to agree to an employee taking twice as much annual leave at half the rate of pay for all or part of the annual leave, including any close-down.
An employer may direct an employee to take annual leave that has accrued, subject to considering the employee's circumstances, by giving at least one week's notice, or any shorter period of notice that may be agreed. A direction to take annual leave cannot result in an employee having less than two weeks of accrued annual leave remaining.
An employer may direct an employee to take annual leave by giving at least one week's notice as part of a close-down of its operations, or part of its operations, or any shorter period of notice that may be agreed.
If an employee has not accrued sufficient leave to cover part or all of the close-down, the employer must allow the employee to take paid annual leave for the period for which they have accrued sufficient leave and to take unpaid leave for the remainder of the closedown.
Where an employee is placed on unpaid leave due to insufficient paid leave accruals, the period of unpaid leave will count as service for the purposes of relevant award and National Employment Standards entitlements.
An employer is not permitted to require an employee to take leave for a period beyond the period of operation of the flexibility schedule.
The determination, which commenced on Saturday 28 March, will expire on 30 June 2020, with the possibility of further extension.
(Not-so) long service leave in New South Wales - new COVID-19 legislation
In response to the COVID-19 pandemic, New South Wales has passed legislation allowing for more flexible use of long service leave. Previously, the Long Service Leave Act 1955 (NSW):
- allowed a worker to access not less than one month of long service leave in advance, if the worker had at least one month of long service leave accrued
- required the employer to give a worker at least one month’s notice to take long service leave.
The amendments to the Act allow:
- long service leave to be taken with less than one month’s notice if agreed by the employer and worker
- long service leave to be taken in blocks of less than one month.
The amendments commenced on 25 March 2020 and will be in place for a period of six months, unless extended.
Modern award changes during COVID-19 pandemic
Hospitality Award changes in response to COVID-19
On 24 March 2020, the Fair Work Commission (FWC) granted an application by the Australian Hotels Association, and supported by the United Workers Union, to vary the Hospitality Industry (General) Award 2010 (Hospitality Award). The application sought to insert a new schedule to provide for award flexibility on a temporary basis.
The FWC acknowledged that the recent Government announcements in response to COVID-19 would likely have a substantial impact on employers and employees in the hospitality sector. The FWC determined that the variation was necessary to achieve the modern award objective and to ensure the retention of as many employees as practicable in the current crisis.
The determination varies the Hospitality Award to insert 'Schedule L – Award flexibility during the COVID-19 Pandemic.' The award variation commenced on 24 March 2020 and will operate until 30 June 2020. The Schedule allows employers to make the following directions:
- For employees to perform duties outside the scope of their classification subject to the duties being within their skill and competency, being safe and the employee being licensed and qualified to perform them, and the Higher Duties provision in the Hospitality Award;
- For full-time employees to work fewer hours (an average of between 22.8 and 38 ordinary hours per week) and the employer will pay the employee on a pro rata basis;
- For part-time employees to work fewer hours (an average of between 60% and 100% of their guaranteed hours per week or the guaranteed hours per week over the roster cycle); and
- For employees to take annual leave with 24 hours' notice, subject to the employer considering the employee's personal circumstances.
Employees that are directed to work fewer hours will continue to accrue annual and personal leave based on the employee's ordinary hours of work prior to the commencement of the Schedule. Employees that take annual or personal leave will also be paid leave based on their ordinary hours of work prior to the commencement of the Schedule.
While employers can direct employees to take annual leave, this does not prevent an employer and employee agreeing to the employee taking annual leave. By agreement between the employer and employee, during the operation of the Schedule, an employee may take twice as much leave at half the rate of pay for the period of annual leave.
Access the FWC's determination and Schedule L here.
Access the reasons for the FWC's decision here.
Proposed Clerk Award changes in response to COVID-19
On 26 March 2020, the Australian Chamber of Commerce and Industry (ACCI) and the Australian Industry Group (AI Group), with the support of the Australian Council of Trade Unions and the Australian Services Union, made a joint application to the FWC to vary the Clerks – Private Sector 2010 (Clerks Award). Similar to the above application, the ACCI and AI Group are seeking to include a new schedule in response to COVID-19.
The application seeks to vary the Clerks Award by inserting 'Schedule I – Award flexibility during the COVID-19 Pandemic.' The Schedule would make the following flexibility changes:
- For employees to perform duties within their skill and competency regardless of their classification, provided the duties are safe and the employee is licensed and qualified to perform them;
- For employers to roster part-time employees working from home by agreement for a minimum of two consecutive hours on any shift, and for casual employees working from home by agreement to be entitled to a minimum payment of two hours' work at the appropriate rate;
- For the spread of ordinary hours for day workers to be between 6.00am and 11.00pm, Monday to Friday, and between 7.00am and 12.30pm on Saturday, for employees working from home by agreement with the employer;
- For employers and full-time and part-time employees to agree to reduced ordinary hours;
- For employers and employees to agree to the taking of up to twice as much annual leave at a proportionately reduced rate;
- For employers to direct an employee to take accrued annual leave with at least one week's notice or on shorter notice if agreed; and
- For employers to require employees to take annual leave as part of a close down, or for employees who have not accrued sufficient leave to take paid annual leave for the part of the close down for which they have accrued leave and unpaid leave for the remainder of the close down.
The application is listed for hearing on 28 March 2020.
Access the application here.
Given the widespread impact of COVID-19 on employers and employees, we anticipate that other unions and employer associations will make applications to vary other modern awards. Employers should stay informed of any award changes to assist with the management of their employees during this time.
To stand down or not? That is the question for many employers
COVID-19 is placing pressure on all businesses. Many employers are considering redundancies and reducing or cutting hours for casuals. An alternative for permanent workers is standing them down.
There is no general right for employers to be able to stand down employees without pay. Standing down employees should be approached very carefully. The starting point is to check the employee's contract of employment and any applicable Modern Award or Enterprise Agreement.
If there are provisions in the contract of employment or the industrial instrument applying to stand downs these need to be followed.
Section 524 of the Fair Work Act enables stand downs in some circumstances. There are three criteria's relevant to this COVID-19 crisis. They are:
- There is a stoppage of work
- The employees to be stood down cannot be usefully employed, (such as working from home)
- The cause of the stoppage must be something that the employer cannot reasonably be held responsible for.
A stoppage of work is not a slow down nor is a deterioration of business conditions. Some examples of a stoppage of work are:
- if there was an enforceable government direction requiring a business to close
- if a large proportion of the workforce was required to be self-quarantined; and this stopped production.
Often the most difficult area is whether or not the stoppage was something which an employer cannot reasonably be held responsible for. Clearly, if there is an enforceable government direction requiring the business to close this falls within the definition.
The New South Wales government has said that clubs, pubs and restaurants are to shutdown. If employees in those industries cannot be usefully employed they can be lawfully stood down.
Many other industries are not yet subject to a requirement to shut down. Standing down employees due to a shortage (rather than a stoppage) of work may not be lawful. When, and if, Australia or an individual state moves to the higher level of shutdowns, more employees are likely to be lawfully stood down.
Stand downs and redundancies: are there any other options for employers, in light of COVID-19?
We are in a crazy time, without precedent. The novel coronavirus, COVID-19, has led to confusion and shutdowns across many industries. This has in-turn led to a slow-down of economic activity for many businesses.
We know that this will pass. It's important to remember that. Stories of people helping one another in response to COVID-19 are starting to appear, whether it's helping Tom Hanks to ease up on the amount of Vegemite he's spreading - here, or the socially-distant 'bear hunts' that are popping up to provide another non-contact activity for parents and their stir-crazy littl'uns - here.
Unfortunately, in the meantime, some businesses are having to make tough decisions to ensure they can eventually emerge from this mire. This has led many employers to consider the 'stand down' provisions of the Fair Work Act 2009, and whether roles need to be made redundant.
But, are these the best or only responses available to employers? Let's have a quick look.
Redundancy is an option currently being considered by some employers. In a nutshell, a role is redundant when an employer no longer requires that role to be performed by anyone, because of a change in operational requirements. In order for the redundancy to be deemed a 'genuine redundancy', there are then hoops for an employer to jump through, which may include consultation, redeployment and redundancy pay.
Stand down is another option being considered. Under the Act, employers can stand down an employee without pay if there is a stoppage of work due to causes beyond the employer's control which means the employee cannot otherwise be usefully employed.
According to the Fair Work Ombudsman's recently published advice, employers cannot generally stand down employees simply because of a deterioration of business conditions resulting in a reduction in business: see here. There must be a stoppage of work.
A stand down of employees is a last response.
So what other options are there?
Making roles redundant, or standing down employees, are drastic steps that have a massive impact on both the employees (in the immediate short term) and the company (in both the short and long term). The loss of employee goodwill is significant especially for any recovery phase from this pandemic. So what are the other options?
Firstly, consult with your people. This is generally good corporate practice at a time as uncertain as this to retain them moving forward, and also to allay certain fears (so far as is possible). Indeed, a stand down may amount to 'major workplace change' requiring consultation for award-covered employees.
Secondly, ask your people whether they might volunteer to change their circumstances. In any business, there will be a myriad of different circumstances and financial positions. Some people will have paid off their mortgage, others will barely be making ends meet, others may work for interest or enjoyment and not because they need the money.
Calling for volunteers to reduce hours, reduce pay or take leave without pay, early on may really help some businesses avoid redundancies and stand downs (and help others to keep their jobs). This might be a viable option for some businesses. Remember, changes to pay and hours of work cannot usually be made unilaterally, so you need agreement.
Thirdly, consider whether you can direct or encourage employees to take paid leave. In certain circumstances, businesses can direct employees to take leave. This usually requires notice, and this can depend on the wording in their employment contracts, or any applicable Modern Award or Enterprise Agreement.
Encouraging employees to take annual leave at full, or 'half-pay' (which technically involves half their absence being on annual leave, and half being on an unpaid authorised absence), may be an option where there is no ability to direct employees to take such leave. Such circumstances can't be forced, this must be by agreement with the employee.
Finally, if possible, businesses might follow in the footsteps of the casinos, Star and Crown, who have each provided special paid 'pandemic leave' (see here and here). Obviously, not all companies will be in the financial position to be able to do this. But for those companies who can, it is worth considering. Not only will it help retain your current work force (and simultaneously boost morale, something we could all do with right now), it will likely also provide a useful public relations tool.
After these options have been exhausted, if stand downs or redundancies remain the only option for your business, messaging is important. A stand down is not a dismissal, and redundancy relates to a role not a person.
During a stand down, affected employees will continue to accrue employment entitlements over the period. After the business is back in operation, the 'stood down' employees will be able to return to their jobs. The business still needs the role of the employee to be performed (except for the unforeseen stoppage of work).
In the meantime, employees who have been stood down should be informed that they may be able to access one of the Government's recently passed stimulus packages, including 'JobSeeker payments', depending on their personal circumstances.
It is a tough and, frankly, scary time, for many. Individuals are acutely aware that the security of their employment may be taken from them any moment. In that context, we would encourage businesses to consider all options available to them before deciding on standing down their employees. Employees may just be willing to share the pain for the greater good of all. After all, we are all on this ride together!
Who are Essential Travellers for COVID-19 interstate border restrictions?
The states and territories have passed separate legislation restricting domestic interstate travel, which has significant implications for some employers.
Which states and territories have implemented interstate border restrictions?
The following states and territories have implemented interstate border restrictions:
- Queensland from 12.00 am on Wednesday, 25 March 2020
- South Australia from 4.00 pm on Tuesday, 24 March 2020
- Tasmania from Friday, 20 March 2020
- Western Australia from Tuesday, 24 March 2020
- Northern Territory from 4.00 pm on Tuesday, 24 March 2020.
Each of these jurisdictions have declared the restrictions will apply to all travellers arriving by air, land and sea. Travellers will need to comply with strict quarantine requirements or be refused entry.
Each jurisdiction has declared that the strict border restrictions and quarantine requirements will not apply to persons who fall within 'essential travellers' exemptions.
Which states and territories have not implemented interstate border restrictions?
New South Wales, Victoria and the Australian Capital Territory have announced that their borders will remain open to interstate travellers. However, based on the rapid changes occurring as states and territories attempt to deal with coronavirus, it is highly likely that some form of border restrictions in these jurisdictions will also be implemented.Essential traveller exemptions
The rules for interstate border restrictions are slightly different in each state and territory but exemptions for essential travellers appear to be relatively the same. The essential travellers categories are generally:
- national and state/territory security and governance
- health services and essential medical treatment
- transport, freight and logistics services
- skills critical to maintaining key industries or businesses
- emergency services workers
- cross border community members (for the purposes of work and obtaining essential goods and services)
- passing through (excluding Tasmania)
- compassionate grounds
- FIFO workers (that are linked to an essential traveller category and are able to provide evidence of their employer and location they are travelling).
At the time of writing this article, the legislative directives for each state and territory are not fully in place or complete. Due to the complexities in implementing border restrictions, it is likely that these directives and legislative provisions will change rapidly.
In Queensland, essential travellers are required to complete an online application to obtain a Queensland Entry Pass and have documentation supporting their status available. Queensland Police have also indicated they are working on an 'identifier' (a visible sticker) to place on vehicles regularly passing across the border. Police have also closed roads to support the Queensland restrictions.
In Tasmania and the Northern Territory, essential travellers are required to complete arrival forms at available border access points. In some circumstances, essential travellers will need to have applied to the relevant government authority to obtain the necessary exemptions before travel.
South Australia has only stated that police will be stopping persons at checkpoints, taking details and making enquiries as to the person's movements and reason for travelling into South Australia. Because of the limited guidance, we recommend that essential travellers have documentation supporting their status available.
In Western Australia, essential travellers are required to complete forms on arrival at points of disembarkation, road checkpoints or stations. For persons entering by road, there is a further requirement that only 'designated roads' be used (Victoria Highway or Eyre Highway).Quarantine conditions for essential travellers
Tasmania requires essential travellers to comply with strict quarantine conditions, including self-accommodating and monitoring symptoms for COVID-19.
At this stage, it does not appear that essential travellers need to comply with quarantine conditions in other state and territories. However, this position may change rapidly.What this means for employers
Employers with interstate operations will need to ensure that travel complies with interstate border restrictions and that operations fall within the essential traveller categories.
In Queensland, employers need to ensure that they have provided employees required to travel interstate with a Queensland Entry Pass.
For other interstate travel, employers will need to consider what application or exemption forms and documentation needs to be available to employees ahead of interstate travel. This will include determining whether exemptions need to be submitted and granted by relevant authorities before travel.
There are strict monetary penalties for both individual employees (of up to $62,800) and corporate employers (of up to $250,000) where border restrictions and essential traveller requirements are not complied with.
FAQ: COVID-19 (Coronavirus) - Employer rights and obligations
By now, most, if not all, workplaces will be impacted in some way by the coronavirus (also referred to as COVID-19) pandemic.
To help, we've prepared this information sheet covering some of the frequently asked questions our employer clients are asking us. However, you need to get specific legal advice for individual circumstances (and the possibility that enterprise agreements or workplace policies may affect some situations). As the pandemic and legal issues continue to evolve, we may prepare and issue subsequent editions of this document.
On this point, please note that the information in this sheet does not constitute legal advice. To keep it as short as possible, it is also not a complete description of the matters it covers or all possible scenarios. Rather, it is guidance of a broad and general nature only and should not be relied on for specific cases. For information or advice about your particular workplace or a specific case, please contact us directly on the details at the end of this document.
We understand that many businesses will be (or are already) doing it tough due to COVID-19. For this reason, we are offering reduced rates (including for existing clients) for any new inquiries relating to COVID-19. Please contact us directly for questions about this.Can I require employees not to attend their usual workplace?
Yes, if you consider this is an appropriate and reasonably practicable control measure to reduce or eliminate the risk of COVID-19 for employees and others in your workplace. Employers have duties under occupational / work health and safety (OHS/WHS) legislation in each State and Territory to provide and maintain a work environment that is without risk to health and safety and adequate facilities for workers in carrying out their work, so far as is reasonably practicable. This includes the risk of contracting COVID-19 in the workplace or in carrying out duties (even away from the usual workplace).
Some employers are directing some or all workers to work from home. Others are using a mix of working from home and minimal staff in the workplace, in some cases on a rotating basis i.e. 1/3 in the office and 2/3 from home, rotating in weekly cycles. For some employers it will not be reasonably practicable to have workers work from home, e.g. workplaces with specialised plant and equipment. In those cases, employers should take whatever forms of risk minimisation are reasonably practicable, such as social distancing at work, information about hygiene, etc.
Whatever the case in your workplace, to comply with OHS/WHS legislation, you should conduct a risk assessment, consult with affected workers, and take all reasonably practicable steps to eliminate (or if not possible, reduce) the risk of COVID-19 in your workplace or in the course of workers' work.
Remember, too, under OHS/WHS legislation, 'workers' means more than employees. It extends to independent contractors and their employees, and others.Do I have to pay employees if I direct them not to attend work (for example an additional period away from the office after an overseas trip)?
Yes, you do have to pay them – even if you cannot give them useful work otherwise. Where an employer does not have a stoppage of work but is directing a person not to attend work in order to protect the health and safety of other employees, it must pay the person who is told not to attend work.Do I have to pay employees if there is a government-imposed lockdown?
Depending on the circumstances of your workplace, you may be able to stand employees down without pay under the Fair Work Act (section 524). However, this only entitles employers to stand down an employee without pay if they cannot usefully be employed because of a stoppage of work for any cause for which employers cannot reasonably be held responsible.
If the government requires a stoppage of work (i.e. a society-wide lockdown), employers may be entitled to stand down employees without pay. Ensure you seek legal advice before taking any such steps.
You cannot stand down employees without pay due to a downturn in work/reduction in business (see 'Redundancy' below for information about what to do in such cases).If an employee or their family member is sick with COVID-19, what do I have to do?
An employee who is sick with COVID-19 must not attend work, due to your OHS/WHS duties. You can require them to obtain a medical clearance before attending work. However, ensure you avoid unlawful discrimination by acting reasonably, based on government and health practitioner advice at the time.
Permanent (full time and part time) employees can use any accrued paid personal leave if they are sick. They can use any accrued paid carer's leave if they need to care for a member of their family or immediate household who is sick. An employer can require production of a medical certificate or other reasonable evidence (such as a statutory declaration) to support a claim for paid personal/carer's leave.
If employees run out of paid personal leave and are still sick, they can take unpaid personal leave or elect to take paid annual leave (or long service leave in some States or Territories).
Casual employees are not entitled to paid personal/carer's leave. However, under the Fair Work Act, casual employees are entitled to 2 days of unpaid carer's leave per occasion. This does not prevent an employer from granting special leave for compassionate reasons but there is no legal obligation to do so.What happens when my employee cannot attend work because they are delayed or quarantined on or after an overseas trip? Do I have to pay them?
Subject to the terms of any applicable enterprise agreement or workplace policy enforceable by employees, no you do not have to pay them. At common law or under the Fair Work Act, if an employee is prevented from attending work because they are delayed or quarantined on or after an overseas trip, you do not have to pay them. Other than casual employees (see above), they can use any accrued paid annual leave or, if they are sick, accrued paid personal leave.Can I tell employees to stay away from work, whether or not they are sick?
Yes, if you consider it is a reasonably necessary control measure to ensure health and safety in your workplace. However, except for casual employees, you would ordinarily need to pay them if they are not sick. If they are sick, they can use paid sick leave, if they have any.What steps should I be taking to protect my workforce?
You must implement a workplace policy to deal with the risk of COVID-19 in the workplace, having regard to the requirements of your particular workplace.
At a minimum, this should include directing employees to observe government and health authority requirements as to self-isolation (not attending work) after returning from overseas or when sick in any way.
It should also include other recommended measures such as social distancing, hand washing/hand hygiene, and potentially working remotely if possible for your workplace.
There is now ample guidance online about these measure but seek legal advice if unsure or if you need assistance establishing a policy.I want to do something to help my employees if they have to self-isolate or need to stay home during a school closure. What can I do?
There are many things you can do – the only limits are creativity and resources. For example, you could create a 'Pandemic Leave Policy', for people needing to self-isolate due to suspected exposure, or for a primary carer who needs to stay home during school closures, capped at (say) 14 days.
However, it is important that anything you do still ensures health and safety, does not contravene or conflict with any applicable legislation, and does not create unexpected or undesired consequences for your business. If you want to create a certain type of leave policy, we can assist you in drafting the parameters.
My employee says they do not want to attend work to protect themselves – are they entitled to be paid?
No, except in limited cases. This is if they have a reasonable concern that they would be exposed to a serious risk to their health and safety from an immediate or imminent hazard. For example, if they know someone in their workplace has just returned from overseas (especially a 'high risk' country) and you, the employer, have allowed that person to be at work, they may be able to argue that the workplace is unsafe.
The employee must inform you as soon as they can that they have ceased work. They must also then be available to carry out suitable alternative work, such as working from home. If they cannot be provided with any suitable alternative work and you cannot provide a safe workplace, ordinarily you would need to pay them.
If you are intending not to pay an employee, you should seek legal advice immediately, due to the significant adverse implications for your business if you get it wrong.Do I have to allow employees to work from home? What are my obligations to employees when working from home?
In certain cases, you would need to allow employees to work from home, for example:
- if you cannot provide a safe working environment otherwise
- if it would be safer for them to work from home
You may also be required to consider and respond to requests for work from home arrangements for employees if their family/carer responsibilities mean they request flexible work arrangements. Whilst there is no strict entitlement to flexible work arrangements under federal workplace laws, section 65 of the Fair Work Act provides that certain eligible employees may make a request for flexible work arrangements and employers can only refuse the request on reasonable business grounds. Further, state and territory anti-discrimination / equal opportunity legislation will generally require granting such a request, unless it would impose an unjustifiable hardship upon a business to do so.
Ensure you seek legal advice before denying an employee request to work from home.
If you allow employees to work from home, you must still ensure they have a safe working environment, as you would at their usual workplace. At a minimum, you should require them to complete a working from home safety checklist and provide it to you. Ensure you seek legal advice if you cannot obtain such a checklist.Are casual employees and independent contractors entitled to be paid if directed not to attend work?
No, they are not (unless the contract of an independent contractor says otherwise, which is unlikely).
Redundancy: if my business suffers a downturn or reduction in business, can I make employees redundant (let them go)? What do I have to do then?
You can make employees redundant if you no longer require anyone to perform their job due to changes in your operational requirements. This would include a downturn in business due to COVID-19.
For all employees:
- employees with more than 12 months service are entitled to redundancy pay under the National Employment Standards in the Fair Work Act (and some may have a contractual entitlement which is more generous)
- employees whose employment is terminated for redundancy must also be given notice of termination or paid in lieu, under the National Employment Standards in the Fair Work Act (and some may have a contractual entitlement which is more generous)
For employees with unfair dismissal protection, you must ensure the dismissal is a case of 'genuine redundancy', which requires consultation with the employees (if they are covered by an award or enterprise agreement) and offering redeployment to another position, if it would be reasonable to do so.
Employees will not have unfair dismissal rights if:
- they earn over the current high income threshold (currently $148,700) and are not covered by a modern award
- they have not served the minimum employment period under the Fair Work Act (6 months for an employer with 15 or more employees and 12 months for employees of employers with 14 or fewer employees)
Ensure you seek legal advice before dismissing any employees.Can I ask my employees to take a pay cut or reduction in paid hours to help the company survive a business downturn caused by COVID-19?
You can ask but not insist. You may wish to approach this on a company-wide basis. However, do so very cautiously and with legal advice, ensuring not to take adverse action against employees who refuse to take a pay cut. Doing so is likely to result in liability under the general protections provisions of the Fair Work Act.
As an alternative, you could ask employees if they wish to take voluntary redundancies.
If none of these work, you may need to consider involuntary redundancies (see above).Can I change employee rosters or hours?
Most employees' rosters or hours will be governed by a modern award or enterprise agreement and or a contract of employment. Generally, agreement will be required (and at the very least, consultation in accordance with an industrial instrument) before you can change employee rosters or hours.Can I refuse employee requests for annual leave or cancel annual leave requests?
Under the Fair Work Act, an employer must not unreasonably refuse a request for annual leave. For the same reason, an employer must not unreasonably cancel annual leave requests (or when employees are on annual leave – it would be particularly rare for this to be lawful).
However, there may be circumstances arising from COVID-19 (staff shortages or cash flow reasons, for example) where it would be reasonable to refuse annual leave requests when they are made or impose a blanket temporary ban on annual leave requests (though see 'indirect discrimination' below).
Ensure you seek legal advice before denying an employee requests for annual leave, if you are unsure of your rights to do so. You should certainly seek legal advice before cancelling annual leave whilst employees are on the leave.
You cannot direct employees to take annual leave, even if you cannot usefully deploy them to work. Some long service leave legislation entitles an employer to direct employees to take long service leave in certain circumstances, although usually advance notice must be provided.Can employees be directed not to travel overseas?
Employees can be directed not to undertake work travel (and indeed, in order to comply with your health and safety duties, you may need to direct employees not to undertake any air travel).
It would be rare for an employer to be able to lawfully direct an employee not to undertake private domestic or overseas travel. However, it may be reasonable to refuse a request for annual leave if this involves overseas travel, due to the potential business impact when the employee returns. Again, seek legal advice if unsure.What about workers compensation claims?
If the Agent or Insurer accepts that employee has contracted they contracted COVID-19 in the course of their employment, they would be entitled to workers compensation payments for the period they are unfit for work. However, it will usually be very difficult for an employee to prove they contracted an illness at work (as opposed to a physical injury, for example). In any case, such workers compensation claims would ordinarily be of short duration and low claim cost, due to the short term nature of the virus.
What legal protections do employees have here?
The Fair Work Act prohibits dismissal of an employee because of a temporary absence (of a kind prescribed by the regulations) due to illness or injury. The Fair Work Act's general protections provisions also protect employees against dismissal or other forms of adverse action because of various protected workplace rights (such as making complaints or inquiries in relation to employment or taking/proposing to take leave) and protected attributes (such as race or disability). These protections also operate in relation to employees impacted by COVID-19.Is direct and indirect discrimination a risk?
Yes, it is. You should ensure you take all necessary steps not to fall foul of anti-discrimination / equal opportunity legislation. The Australian Human Rights Commission has advised that it has already received complaints from workers of an ethnic, or perceived ethnic background. Conduct may be unlawful even if it arises from a genuinely held fear about COVID-19.
You should ensure you do not make (or allow to be made) any directions on the basis of an employee's race or ethnicity, such as a direction to work from home or a direction not to attend for work. You should also ensure that directions on the basis of an actual or perceived medical condition are made in accordance with anti-discrimination legislation. Due to the complexities of these issues it is not possible to summarise the obligations further here.
Further, employers must avoid indirect discrimination – that is, they must not impose policies, requirements or conditions which on their face appear equal, but with which a group of people with an attribute protected under anti-discrimination laws cannot comply, unless the policy, requirement or condition is reasonable in all the circumstances.Where can I get more public information on health and safety in the workplace and workplace laws?
You can visit the Fair Work Ombudsman's website (www.fairwork.gov.au) or your State or Territory workplace health and safety regulator. Workplace health and safety regulators can also assist with workers compensation enquiries.
Employer obligations in the time of coronavirus (COVID-19)
With the world's human resources landscape exponentially changing over the last few weeks, it has become evident that the first responsibilities an employer should be considering is that they must, as far as practicable, provide and maintain a working environment in which their employees are not exposed to hazards.
These specific obligations are set out in the Occupational Safety and Health Regulations 1996 (WA) and industry-specific obligations are set out in various Codes of Practice and Guidances notes. Further information on these requirements can be found here: https://www.commerce.wa.gov.au/worksafeWhat responsibilities does an employer have?
These obligations extend to a hazard such as the risk of infection of employees and others in the workplace. The consideration when assessing the steps that can be taken should always be "what is practicable to provide and maintain a hazard-free working environment?"
Steps that workplaces should consider include:
- Providing ample soap and hand towels in all work areas.
- Providing access to hand sanitiser in general work areas, particularly those accessed by external persons.
- Providing tissues (and appropriate disposal containers) in wet and general work areas
- Reminding staff and workplace visitors of appropriate hygiene.
- Limiting visitors to the workplace and allowing staff to work from home where possible.
- Requiring staff to work from home
- Providing for staff to work from home when under government mandated self-isolation or quarantine.
As the government and medical information continue to be updated, the appropriate steps must be continually re-assessed.What if my employees can't work from home?
Working from home is not an option available to all businesses, or all employees of a business. For example, cafes, restaurants, retail, hotel, reception, construction, (other examples) may not have capacity for employees to work from home if under self-isolation, government mandated isolation/quarantine, or are caring for someone who is unwell (or a dependent who is in self-isolation).
The rights of an employer in that situation will be governed by the relevant legislation (State and/or Federal), the Award or Enterprise Agreement that applies to the employer and employee, the employment contract, and any policies and procedures of the employer.What if my employees test positive for coronavirus, are otherwise unwell, or need to care for a loved one who is unwell?
Your employees continue to have the same rights to personal/carer's leave as they do in relation to other illnesses. Employers should carefully consider each employee's entitlements, and the circumstances of their requirement for leave. In addition, employers can agree with their employees to provide additional paid leave (for example in relation to casual employees who are otherwise only entitled to unpaid carer's personal leave).
Employers are still entitled to receive notice of the leave that an employee is taking, even if the assumption during this time is that it is due to coronavirus. This notice must be given as soon as practicable and advise of the expected duration of the leave.
Full-time and part-time employees who must care for immediate family (including parents and grandparents) and those in their household are entitled to carer's leave.
Additional notice requirements and leave entitlements may be contained in the Award(s)/Enterprise Agreement and their employment contract.What if my employee is unable to work?
Employers should ensure their policies address their expectations in relation to overseas and interstate travel, including their annual leave and long service leave policies. These policies may need to be updated regularly as the government advice changes, in particular as travel bans (into and out of Australia) are imposed.
Generally, by agreement, employers and employees can agree for an employee to take additional annual leave or to take unpaid leave, or alternatively to reverse previously booked annual leave. Employees who are sick continue be entitled to their personal leave entitlements (including two days unpaid sick leave).
If employees must comply with government-imposed restrictions, an employer may be able to place an employee on unpaid leave however an employer should carefully consider the rights of the employee as set out in the legislation, Award or enterprise agreement and employment contract.What if I no longer require certain employees or an employee is on extended unpaid sick leave?
Employers will need to carefully consider both their legal obligations and the business and reputational effect of making the decision to terminate the employment of an employee. Options such as redundancy are still available to employers who no longer require a specific role to be undertaken, and employers should be careful to follow the processes (if any) set out in the relevant Award and make any payments to which an employee is entitled (or seek an exemption from the Fair Work Commission or the Western Australian Industrial Relations Commission). Individual employment contacts or Awards/Enterprise Agreements may also set out grounds for termination or stand-down from work entitlements and employers should seek legal advice on the options that may be available to them.What next?
Employers should keep updated on the latest government and health advice, and keep their employees updated on the relevant policies.
Investigating workplace complaints - who should do it and why?
Every workplace encounters employee disputes and misconduct allegations. Investigating these complaints can be difficult as they are often personal, complex and unpleasant. They also have potential serious consequences for the people involved.
To ensure a proper investigation is conducted which is procedurally fair, it needs to be determined who the best person is to conduct the investigation. Should it be conducted internally, perhaps by HR or senior managers, or externally by lawyers or consultants?
There are a number of considerations to take into account that will help with this decision.Fairness and impartiality
It is important that whoever investigates a workplace complaint is, and is seen to be, free of bias. It is most common for investigations to be conducted internally, either by management or HR staff. Although there are advantages to this, such as detailed knowledge of policies and procedures and the particular workplace culture, the obvious disadvantage is perceived bias.
Internal investigators are more likely to know the people involved and may have even been involved in other workplace issues, for example, performance management. Consequently, internal investigators run the risk of being in a position of conflict or at the least, perceived bias.
Maintaining impartiality is crucial to the success of an investigation and an external investigator is less likely to be perceived as biased.Skills, knowledge and expertise
It is critical that any investigation into a workplace complaint is conducted appropriately and fairly. Courts repeatedly attach great importance on procedural fairness in investigations. It is imperative that the investigator has the right skills and understanding to ensure fair process. Any organisation undertaking such an investigation needs to consider whether it has staff who are equipped with the correct knowledge and experience, or whether external investigator with those skills and experience should be engaged.Time constraints
An investigation should not be run part-time and just fit in around other commitments. It requires immediate action and the investigator should be dedicated to that investigation. Investigations can be very time consuming, they are often complex, involve the gathering and consideration of extensive evidence and may go on for months. There are often many hours of witness interviews to do. It may be difficult for internal staff to effectively and efficiently conduct such investigations when they have ongoing and/or competing priorities. The organisation may prefer its staff to focus on their normal tasks and engage external investigators to dedicate the necessary time and focus on the investigation.Who is the decision maker?
Lastly, in order to avoid any suggestion that the outcome of an investigation was predetermined and the investigation was merely designed to achieve that outcome, the investigator who is responsible for determining what has happened, and whether a breach of policy or employment agreement has occurred, should not be the same person who makes disciplinary decisions.
Quite often, senior internal managers lack the necessary experience to appropriately conduct a workplace investigation. Others, such as HR, do not have the time to devote to complex investigations on top of their existing workload. Critically, if the investigation is conducted internally, there can be a significant risk of perceived bias towards either the complainant or the accused. Any decision as to who undertakes the investigation should be decided with these factors in mind to ensure a fair process for all involved.
COVID-19 and its impacts on workplace leave entitlements
Mounting COVID-19 concerns have been playing on the minds of employers and their employees, with many worried about the financial hardship that will stem from an inability to work.
We are already witnessing real world and "live" examples of large organisations having to take drastic action with their employees, Qantas being a notable example. This article provides an overview for employers in relation to their options for utilising relevant leave entitlements and the implications for casual employees in particular.
It is vital to bear in mind the unique nature of these circumstances when considering this article. Every business is different, and each businesses' arrangements with employees can be highly varied and may include unique contractual entitlements, awards or temporary concessionary entitlements that provide more employee-favourable outcomes. This article instead focuses on legislative minimums and is subject to change as state, territory, and federal governments issue new advice and relief packages.WHAT ARE THE IMPLICATIONS IF AN EMPLOYEE OR FAMILY MEMBER IS SICK WITH COVID-19?
Sick employees, whether from COVID-19 or any other ailment, and employees caring for a sick person, are entitled to sick or carer's leave respectively.
Where available sick or carer's leave is exhausted, employees could seek paid leave, including annual or accrued long service leave entitlement. Otherwise, requesting unpaid leave is the most likely option.
Employers can ask employees for evidence of illness for any period of sick leave, however the necessity for employees to provide evidence is usually determined by company policy.WHAT IF AN EMPLOYEE IS IN SELF-ISOLATION OR STUCK OVERSEAS?
As of 17 March 2020, it is mandatory for individuals returning to Australia from overseas to self-isolate for 14 days.
Given the unprecedented nature of the current situation, there are currently no specific guidelines or legislative schemes regarding leave entitlements for those effected. Accordingly, employees and employers must negotiate their own arrangement.
If an employee cannot work because they are subject to a Government order requiring them to self-quarantine (but are otherwise well and fit to work), the employee is not ordinarily entitled to be paid (unless they use leave entitlements). This is because the employee's inability to work relates to a Government order, and the inability has not been caused by their employer. In these circumstances, working arrangements will be at the discretion of the employer and employee. Working arrangements for employers to consider include the following:
- work from home, or where relevant or appropriate, from another remote location;
- take annual leave (although the employee would likely need to agree to this option);
- take any other accrued leave, including long service leave, or other leave entitlements under an applicable Award or contract;
- take unpaid leave; or
- a combination of paid and unpaid leave by agreement between the employer and employee.
If an employee elects to stay home as a precautionary measure and they are not unwell, they are unlikely to be entitled to sick leave. This is because medical proof or evidence of illness generally must accompany sick leave entitlements. Where an employer does not agree with sick leave being utilised, and an employee refuses to work and is not able to provide a medical or caring-based reason, the employee will not be entitled to pay.
However, the employee could come to an arrangement with their employer. These arrangements may range from working from home, taking paid leave, including long service or annual leave, or unpaid leave.Being "stuck" overseas
On 20 March 2020, the Australian Government closed Australia's borders to all but Australian citizens and residents. Being 'stuck' overseas does not, of itself, entitle employees to compensation in any form, outside of annual leave or other routine paid leave entitlements. Of course, depending on the business, there may be circumstances in which an offshore employee may be able to continue working remotely.EMPLOYER DIRECTED ISOLATION
Where an employer directs a full or part-time employee to stay at home in line with health authority advice, and the employee is not unwell, that employee should be paid while the employer direction applies.
Where the employee is willing and able to work but is directed not to work due to their recent exposure to an infected person or recent return from overseas that employee is likely to be entitled to pay as per usual. This does not generally mean paid sick or annual leave, but instead implies a work-from-home arrangement where possible. Similarly, directing an employee to stay at home as a precautionary measure or requiring medical clearance from a health professional is also acceptable where there is genuine cause for concern. In requiring clearance, employers must provide compensation for the duration needed to complete the test, which depending on healthcare resources may take 2-5 days. This is especially true where the employee is, at the time of testing, willing and able to work and not exhibiting symptoms. Where possible, this should entail working from home, but does not generally constitute sick leave.
An employee directed to stay at home because they have COVID-19 will be entitled to sick leave.WHAT HAPPENS IF SCHOOLS CLOSE?
Where a parent is still required to work but is unable to due to schools / childcare centres being shutdown, an employee could utilise paid carer's leave depending on the circumstances of the closure. If paid carer's leave is exhausted, the employee would have to use paid leave entitlements (such as annual leave or long services leave) if the employee was unable to work. A work from home arrangement could also be put into place if appropriate.WHAT DOES COVID-19 MEAN FOR CASUAL WORKERS?
Under the Fair Work Act 2009, casual employees are not entitled to leave benefits such as sick or annual leave. Casual workers are entitled to 2 days' unpaid carer's leave, or 2 days' unpaid compassionate leave per occasion. Lack of paid leave is in part compensated for by casual loading. However, through Services Australia the Australian government can provide casual employees with a 'sickness allowance', which is distributed on a means-tested basis. In the wake of worldwide COVID-19 developments, the Morrison Government has announced that the one-week wait time to access this payment would be removed (but the 5-day processing window was unavoidable).
As of 17 March 2020, the Morrison Government has made no move to require employers to provide sick leave for casual workers, partially as a result of the 'sickness allowance' scheme. It is noteworthy that this type of payment is generally lower than what casual workers make in employment, and thus even a 'sickness allowance' may still result in a financial penalty for those casuals deciding to stay at home. However some employers, such as Officeworks, Target, Kmart and Woolworths have committed to paying casual workers who are required to self-isolate1.DISMISSING EMPLOYEES
Casual and part-time or full-time employees are protected from dismissal as a result of personal injury or illness. Where the inability to work extends beyond a consecutive 3-month period, or constitutes 3 months within a 12-month period, an employer may have the right to terminate employment (subject to termination rules that otherwise apply). In the longer term, redundancy may become an option. Unlike temporarily standing down, redundancy requires that employer's provide redundant employees with severance or support packages, which are largely dependent on individual contracts or industry awards.CAN I TEMPORARILY STAND DOWN MY STAFF?
Employers may temporarily stand down staff where they 'cannot be usefully employed' due to equipment breakdown, industrial action, or a stoppage of work for which the employer cannot reasonably held responsible. Qantas has stood down employees under this third category, claiming that employees have no meaningful work to do as a result of the COVID-19, which is out of Qantas' control2. Employees that are stood down are not entitled to pay. Although standing down is not available due to a deterioration of business conditions, a lockdown or significant and drastic reduction in available work, as we are observing with COVID-19, is an exceptional situation. Advantages to standing down employees include that there is no need to provide a redundancy package, and once the period of stand down has concluded the employees can return to work far more easily as they have not been 'terminated'.
The level of widespread leave entitlement usage as a result of the COVID-19 is unprecedented in Australia. Given the evolving nature of government and World Health Organisation advice in combination with the rapidly developing virus, it is important to consider each circumstance with nuance and care. In this time of uncertainty, it is recommended that employers practice open communication with employees in order to achieve robust health and safety standards while also making all efforts to ensure that business continues in the smoothest way possible.
The content of this articles is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Please feel free to contact HR Global Solutions if you require any assistance.
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