COVID-19 Employment Law Update
We understand that employers are facing unprecedented challenges in light of the COVID-19 pandemic. The purpose of this pulbication is to provide some general guidance to employers on the key issues that they might face.
Do I still need to pay staff if we shut down temporarily?
If your employment contract, modern award or enterprise agreement provides for stand down provisions, you should look to that contract or agreement for rules around stand down, and section 524 of the Fair Work Act 2009 (the Act) will not apply.
If your employment contract, modern award or enterprise agreement does not provide for stand down provisions, you may be able to stand down your affected employees without pay under the Act if all of the following elements are satisfied:
• you are a national system employer (most entities are national system employers except for entities such as state or local government employers or non-incorporated entities in WA);
• the reason for the stoppage of work, i.e., the government direction, is the real reason employees are being stood down;
• there is actually a stoppage of work, not just a downturn of business or just because an employee has coronavirus; and
• there are no other opportunities for the employees to be usefully employed (e.g. working from home or working in another role).
Stand down should also be implemented as fairly as possible (e.g. by giving staff as much notice as possible or by consultation with staff).
Note that employees affected by stand down will continue to accrue leave entitlements.
Stand downs are likely to be closely scrutinised and can be challenged by an employee or union in the Fair Work Commission if not implemented properly, so we strongly recommend seeking advice prior to implementing a stand down.
Can I direct my staff to take annual leave?
If a modern award applies to your employees, you should look to that award for rules around annual leave. Modern awards usually allow employers to direct an employee to take annual leave:
• during a temporary close down of business; and
• where the employee has accrued excessive annual leave (e.g. 8 weeks).
If an enterprise agreement applies to your employees, you should look to that enterprise agreement for rules around annual leave.
If your employees are not covered by any modern awards or enterprise agreements, you may direct your employees to take a period of paid annual leave, but only if the requirement is reasonable under the circumstances and complies with the relevant legislative requirements. Closing down your office due to COVID-19 is likely a reasonable reason for forcing your employees to take annual leave.
Can I direct my staff to take long service leave?
You may direct your employees to take long service leave pursuant to the applicable State or Territory long service legislation by giving a period of notice.
Can I make my staff redundant?
Before making any employees redundant it is important to first consider:
• whether there are any options for redeployment within the business or associated entities; and
• your consultation obligations under any enterprise agreements or modern awards.
Most employees (who have at least one year of service with the employer) will be entitled to receive a minimum redundancy payment in accordance with the Act. A general exception applies to employers with fewer than 15 employees in most (but not all) industries. The amount of redundancy pay employees are entitled to will be based upon their continuous service, as well as any terms in any applicable enterprise agreement or award.
Redundancy is likely to be closely scrutinised and can be challenged by an employee if not implemented properly, so we strongly recommend seeking advice prior to considering making an employee redundant.
What if one of my staff has COVID-19?
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury.
Notwithstanding the above, an employee is not considered temporary absent from work if that employee has been absent for more than 3 months within a 12-month period.
If you require any immediate assistance, our firm is available to assist you and we have fixed fee packages for the current employment law issues which our clients are experiencing. Feel free to contact us for a free consultation on (02) 9262 5495 or (03) 8899 7870; visit our Website; Like our Facebook Page.
This article is written by Megan Kong and settled by Damin Murdock. This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.