Natural disasters are not new to Australians. We have suffered together through floods, bushfires, cyclones and drought, always relying on our unique Australian culture of mateship, embodying equality, loyalty and friendship. The coronavirus or COVID-19 is just another challenge which we will overcome.
The spread of the coronavirus in Australia presents some interesting challenges for both employers and employees. As the virus spreads and more people are infected, a growing number of businesses face the prospect of closure due to quarantining of staff and/or their premises.
We are fielding more enquiries from concerned clients regarding the impact of the coronavirus on their incomes and cash flows, requesting advice on what steps they can take to mitigate their potential losses from these impacts.
The purpose of this article is to provide employers and employees with a practical guide on how to best deal with the threats from coronavirus, whilst meeting their legal obligations. We are mindful of the impact the coronavirus may have on people’s incomes and livelihoods and where possible, we recommend employers and employees work together to try and reach equitable, fair and compassionate outcomes.
Where to start? An action plan is a step in the right direction.
We recommend employers take the time to develop a written action plan with respect to the impact of the coronavirus on their business and employees. We would recommend that this plan be developed in consultation with employees and signed by the employer and its employees as an agreed plan of action to be implemented in the event of a coronavirus outbreak or quarantine.
Below is our suggested 6 step pan for dealing with a coronavirus outbreak:
- Contact your insurance company to determine if you are covered by business or personal income insurance for a coronavirus quarantine or shutdown.
- Identify which employees are casual, part time or full time and their respective entitlements.
- Review any enterprise bargaining agreements, industry awards or employment agreements which cover employment entitlements during natural disasters to determine if they would apply to a temporary quarantine of an employee or workplace.
- Consider whether employees are able perform their jobs from an alternate location or from their homes.
- Review your workplace health and safety policies.
- Develop a plan for a prolonged shutdown, and a resurgence.
Step 1: Does your business or personal insurance cover a coronavirus quarantine or shutdown?
Many businesses have business interruption insurance which forms part of their general business insurance. The policies are numerous and varied and many cover businesses for losses stemming from a large range of events including theft, fire, flood and other natural disasters causing direct physical loss or damage to workplaces. However, the vast majority of business insurance policies do not cover losses incurred as a result of pandemics and epidemics.
We recommend business owners contact their insurers or insurance brokers to obtain advice as to whether their policy covers them for loss of income due to a coronavirus shutdown. Unfortunately, if the business policy does not cover this loss it is more than likely too late to insure for the loss as most insurers have already taken steps to exclude epidemics from their policies.
The good news for employees with income protection insurance (which are sometimes attached to their Superannuation Fund) is that they are more likely to be covered for a loss of income due to contracting the coronavirus. This is the same cover which would apply for an employee contracting any other disease. We recommend that all employees contact their insurer or insurance broker to obtain advice as whether their policy covers them for lost income should they be forced to quarantine themselves due to contracting coronavirus.
Please note an employee who voluntarily quarantines themselves as a precautionary measure or is required to do so by a health authority may not be covered under their insurance policy if they don’t actually end up contracting the coronavirus.
Step 2: Identify all full time, part time and casual employees.
Full time and part time employees have access to a larger range of leave entitlements including annual leave, long service leave and sick leave.
Casual employees don’t have access to the above leave entitlements.
The mix of an employer’s workforce can have very different impacts on cash flow should a coronavirus outbreak occur.
Full and Part Time Employees
Full and part time employees who have been infected by the coronavirus are entitled to sick leave after producing a medical certificate to confirm the infection. However, if a workplace has been placed into quarantine due a staff member either contracting the coronavirus or having contact with a person who has a confirmed case of the coronavirus, the employees in that workplace do not have an entitlement to sick leave.
Further, should an employee be directed to self quarantine by a health authority or elect to self quarantine and they are not actually infected by the coronavirus, they will be unable to claim the quarantine period as sick leave.
It should also be noted that an employee is able to take sick or carer’s leave to care for an immediate family member or household member who has contracted coronavirus. This will not cover an employee who is forced to stay home to look after a child whose school or day care facility has been quarantined if the child is not infected with coronavirus.
In the event a workplace is quarantined due to a coronavirus outbreak an employer may agree, but is not legally obligated, to pay its full time or part time employees annual leave, long service leave, sick/carer’s leave or compassionate leave, provided sufficient leave has accrued. This is totally at the employer’s discretion; however, as at the time of this article, the Australian Federal Government appears to be introducing grants and tax breaks targeting business for the purposes of providing relief to be able to retain employees.
At the time of writing this article, casual employees who contract coronavirus or are unable to work due to a workplace being quarantined are not entitled to any compensation. This is currently the subject of an active lobbying campaign and the federal government is expected to address this issue in its coronavirus stimulus package. We will continue to update our clients on this very important issue.
Step 3: Review existing awards and agreements.
Many enterprise bargaining agreements, industry awards or employment agreements contain clauses with respect to employee entitlements as a result of closure of a workplace due to a natural disaster or emergency.
Employers who are subject to any of the above agreements or awards need to review them and establish whether any employee entitlements exist under them in the event of a workplace shutdown or employee quarantine from coronavirus. This can be a large task, please feel free to contact us if assistance is required with this step.
Step 4: Consider whether employees can work from home or an alternate location.
Employers with multiple locations should consider what actions they can take to transfer employees from a quarantined workplace to an alternate one. It is best for employers to consult with employees about the practical consequences of the transfer. Issues to be discussed might include things like:
- a change in working hours or rosters
- payment of temporary re-location costs like travel or accommodation
- a change in duties
- a change in pay
Many employers are putting plans in place for employees to work from home. Whilst this appears to be a logical and easy solution to a workplace or employee quarantine, the following issues should be considered:
- How will an employee’s work be monitored whilst they are at home?
- If the employee is using their personal computer, is it secure and does it comply with the employer’s ICT policy?
- How will customers or clients contact the employee whilst they are at home?
Employers may also wish to consider a staged response, for example, retaining key staff in the office, while seeking that non-essential staff work from home for a period of time.
Step 5: Review your workplace healthy and safety policies
The coronavirus represents unique challenges for employers to ensure they are complying with relevant workplace health and safety laws and their own workplace health and safety policies. Two issues which require immediate attention include:
- A review of the workplace health and safety policies with respect to employees working from home. Employees working from home are subject to workplace health and safety laws. Employers need to analyse the exposure of employees to hazards in their homes and ensure they amend their policies to accommodate employees working from home.
- Employees who present to work with symptoms of the coronavirus should be told to return home. Failure to do so by an employer may be regarded as a breach of their obligations under workplace health and safety laws to provide a safe workplace for other employees. Many employers are insisting on a medical certificate from a doctor certifying that an employee is fit for work. The major problem with these certificates is that a doctor is only able to assess an employee for a brief period during a consultation and is only able to certify that the employee was fit for work when assessed. Employers who use these certificates to justify an employee remaining at work whilst displaying symptoms of the coronavirus will be in breach of workplace health and safety laws.
Employers need to be vigilant and put in place a policy regarding employees who begin to show symptoms of the coronavirus.
Please contact us if you require assistance with reviewing your workplace health and policies to ensure you comply with your legal obligations.
Step 6: Develop a plan for a pro-longed shutdown
There is no doubt coronavirus presents some unique challenges however planning for the worst will ensure the long term survival and success of a business.
The worst case scenario for any business and its employees is a prolonged shutdown due to a coronavirus outbreak in the workplace. As discussed above, in the event of a shutdown, employers can cash flows permitting, agree to pay full and part time employees their various leave entitlements. However, whilst ideal, this is not always an option for every employer.
The Fairwork Act 2009 allows employers to stand down employees without pay during stoppages of work for any cause which the employer cannot reasonably be held responsible. This would include the shutdown of a workplace due to an outbreak of coronavirus.
It is important to note that an enterprise agreement or contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).
If an employer does stand down its employees due to coronavirus it is best practice to provide the employees with the following information in writing:
- The start date of the stand down.
- Whether the employees will be paid during the stand down.
- The effect of the stand down on the employees other entitlements for example leave accrual.
- Where possible an estimated end date of the stand down.
How we can help you?
The spread of the coronavirus appears inevitable. What’s yet to be determined is the economic fallout from its impact. Our goal is to help minimise that impact by assisting employers and employees to develop and implement the above action plan.
It is clear that the needs and risks to each business will be different, and one continuity or response plan will not be a one-size-fits all. If you require assistance in preparing a continuity or response plan, we are here to help, please contact us if you would like assistance in developing your action plan.
This article was written by Barry Klopper.