Thinking | 13 April 2021

Can an employer restrict secondary employment and require exclusivity during the pandemic?

By Fay Calderone

In a previous article, we looked at cases in which secondary employment may be precluded if it gives rise to a conflict of interest and recommended that any restrictions are clearly expressed in an employee’s employment contract.

Prohibitions on secondary employment can also be used as a part of health and safety measures around infection control. This can, however, be an area of tension, particularly in industries such as in the disability, aged and health care sectors, where it can be difficult to strike a balance between the benefits of implementing such measures and the impact this has on the earning potential of what is often a largely casualised or part-time workforce.

The prohibition on secondary employment as a health and safety measure was the focus of a recent decision of the Fair Work Commission (FWC) in Health Services Union v Huntingdon Nursing Home Pty Ltd [2021] FWC 1730.

In this recent case, as part of its COVID-19 infection control measures, the employer, Huntingdon, introduced a policy under which its staff were prohibited from undertaking secondary employment at another aged care facility. Known as the ‘One Employer Policy’, the policy required employees to disclose any secondary employment to Huntingdon and elect which role they would continue to undertake. If they refused to elect, they would be stood down from their employment with Huntingdon until further notice and take either paid or unpaid leave.

The claim focussed on the circumstances of one of Huntingdon’s employees who was engaged as a music therapist one day per week. She also performed music therapy services for three other aged care providers. After notifying Huntingdon of this, she was told she could not come into work, requiring her to use her leave accruals, then take unpaid leave.

The Health Services Union raised a dispute under the dispute resolution clause of the relevant enterprise agreement, challenging the policy and Huntingdon’s ability to stand employees down and require them to take leave.

Although the employer pointed to several documents in support of the policy, including guidelines published by government and by the Communicable Disease Network Australia concerning COVID-19 outbreaks in aged care facilities recommending that staff should not work at other facilities and every effort should be made to maintain a consistent workforce, the FWC found that none imposed a legal obligation on Huntingdon to apply the policy.

Huntingdon also argued that as there was no work available for the employee to perform, a stand down was justified. This was rejected by the FWC, which found there were no operational changes to the work, and the only barrier to her performing her role for Huntingdon was the requirements of the policy. As the employee was otherwise ready, willing and able to work, she was entitled to be paid.

The FWC found that the policy’s effect was either to require employees to take leave in circumstances where Huntingdon would not have otherwise been able to direct employees to do so, or to stand them down on no pay in breach of the terms of their employment.

The case makes clear that employers need to carefully balance their health and safety obligations and implement appropriate measures to ensure it complies with its duty of care to staff, patients and residents. However, in the absence of any legal obligation to the contrary, this does not provide it with a unilateral right to vary or ignore the employment rights and entitlements of employees.

As the employer in this case identified, there are a number of guidelines that recommend minimising staff movement during an outbreak as part of infection control measures. However, before implementing any restrictions, employers should first review their employment contracts to assess the extent of any existing terms that prevent employees from working for others.

In the absence of any existing terms, employers should carefully consider the availability of alternative infection control measures that can be implemented to minimise risk. This could include, for example, retaining a list of those workers who undertake work at other facilities (which is currently a requirement in some jurisdictions such as Victoria).

This measure enables employers to take appropriate steps in the event of a local outbreak (which could include standing workers down on paid leave), rather than introducing a blanket policy such as the one implemented in this case.

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