Thinking | 12 March 2020

Novel coronavirus (COVID-19): implications for employers

By Karl Rozenbergs and Georgia Macri

On 11 March 2020 the World Health Organisation (WHO) declared the outbreak of COVID-19 a pandemic, and the emergency has continued to escalate.

The outbreak has given rise to issues that every employer must address. For example, employers must manage:

  • their workforce’s health and wellbeing;
  • their business’ workflow;
  • workplace flexibility;
  • their reputation;
  • reductions in production and revenue; and
  • the potential long-term effects on business continuity.

The virus is here, and it’s spreading. Our national team of employment law experts has been busy advising clients about navigating the issues.

Here are some of the key issues employers are facing.

Employers must identify and control risks to health and safety

Employers must provide and maintain a working environment that is safe and without risks to the health of employees and others, to the extent that it is reasonably practicable to do so.  Failure to provide a healthy and safe environment can expose employers to criminal prosecution under work/occupational health and safety legislation, and maximum penalties in the millions.

While every employer’s response must be tailored to its circumstances, below are some measures that every employer should be taking:

  • Establish a clear line of managerial responsibility for the organisation’s COVID-19 response, from operational up to Executive/Board level.
  • Ensure managers are provided with adequate resources and authority to implement the organisation’s policies and government recommendations.
  • Maintain and adhere to up-to-date and effective workplace policies relating to infection control, workplace hygiene, risk identification, working from home and other relevant policies.
  • Educate and update employees on new information relating to the impact of COVID-19 on their workplace and business operations but balance the information sharing with information overload.
  • Provide adequate facilities and products to allow employees to maintain good hygiene practices (for example, providing hand sanitiser and disinfectant wipes).
  • Direct employees to self-isolate at home if they are feeling unwell, if they have been in any country or region listed by the Department of Health, or if they have been in contact with confirmed cases of COVID-19.
  • Communicate with employees about support available eg medical facilities on-site, Employee Assistance Programs, personal and carer’s leave entitlements, income protection insurance, etc.

Boards and Executive groups should also consider adding the organisation’s COVID-19 response as a standing agenda item while the emergency persists.

Employment and industrial issues

Employers will likely face some of the following issues:

  • Employees will take increased personal and carer’s leave. Employers need to make it clear to their employees that these avenues are available to them, as long as they fulfil the requirements for such leave. This may also create issues where employees have exhausted their leave balances, or where they are running out of leave. In these circumstances it may be appropriate to allow employees to access accrued annual leave or long service leave, or even access annual leave in advance.
  • Employees may also refuse to work if it would create a risk to their health and safety by exposing them to COVID-19. Employers will need to quickly assess the legitimacy of health risks raised by employees. If employees refuse to attend work, we recommend that you seek legal advice immediately.

‘Isolation leave’

COVID-19 requires employers and employees to weigh up the health and safety implications of people attending for work.

This is very difficult in circumstances where an employee is not so unwell that they would ordinarily take sick leave, but is ‘high-risk’ because they:

  • have travelled through a specified area or region (eg China, Italy, South Korea or Iran);
  • present with mild cold symptoms; or
  • have been in contact with persons in these categories.

Most employers have, rightly, implemented policies requiring the isolation of employees in these ‘high-risk’ categories. Provided that employee isolation is supported by legitimate health information (eg a recommendation from the State or Commonwealth Government), employers generally do have power to direct an employee not to attend the workplace. For want of a better term, we refer to this type of absence from work as ‘isolation leave’.

However, isolation leave raises some complex and important questions:

  • If an employee is directed not to attend work and go on isolation leave, can an employer withhold wages for the period not worked?
  • Can employees be directed to take personal, annual or long service leave while on isolation leave?
  • Can ‘stand down’ provisions in the Fair Work Act or enterprise agreements be used to facilitate isolation leave?

For employees who are not actually unwell, unless an organisation has specific arrangements in individual employment contracts, an enterprise agreement or another industrial instrument, the answer to each of the above questions is very complex.

That is, if an employee is directed to not attend work and go on isolation leave, but is not actually unwell, depending on the specific circumstances, it is possible that the employer will need to pay the employee for their non-attendance (noting that the situation for casuals raises further complex issues).

In these circumstances, it is critical for employers to consider whether it will be required to pay employees on isolation leave and, if so, what labour costs it can bear while productivity may be significantly curtailed.

To mitigate the issues that arise from employees being directed not to attend for work and go on isolation leave, we recommend that employers consider the following actions:

  • Create a new leave code for isolation leave in payroll systems to track and measure employee non-attendance in these circumstances.
  • Prepare a standard direction to be provided to employees required to go on isolation leave. The direction can set out conditions for the leave including that:
    • the employee provide daily/periodic updates to a specified person/inbox as to their wellness (this will assist the employer to monitor the situation and also understand if the employee should instead take personal leave if they become unwell);
    • the employee remain contactable and available to undertake work as reasonably directed during the period of isolation leave; and
    • the employee may be directed to perform tasks not ordinarily performed by the employee in the ordinary course of their duties, but which are reasonable, fall within their general skills and experience and can be undertaken remotely (this may include, for example, lower priority administrative tasks, online learning and development activities, etc – it could be a good opportunity to ensure employees have completed online equal opportunity training modules).

Direction to get a medical clearance

In some circumstances it may be appropriate to direct employees to obtain a medical clearance before returning to work, for example where a person presents for work with flu-like symptoms but does not wish to self-isolate or take personal leave.

If employees are directed to obtain a medical clearance, employers will generally need to pay the employees for their absence from work for a reasonable period to enable them to obtain that clearance, for example 2-5 days (this timeframe will also be dependent on the availability of medical services at the time). Employers may also need to pay employees for out-of-pocket expenses in obtaining a medical clearance.

If an employee is directed to obtain a medical clearance but is not certified as fit to work by a medical professional (eg a GP), it may be appropriate to direct the employee to access accrued personal leave, or otherwise take unpaid leave until they are certified as fit to return to work.

Privacy issues arising from COVID-19

Employers may wish to request information about their employees’ health, and they may intend to disclose the identity of affected employees to others in the workplace.

Private health information is strictly regulated in Australia, and breaches may undermine trust within the employment relationship as well as result in penalties.

Specific privacy laws will depend on the jurisdiction in which the employer is based. For example, the Health Records Act 2012 (Vic) (Health Records Act) provides that an organisation may collect or disclose health information about an employee if:

  • the health information is being used or disclosed for the primary purpose for which the information was collected, eg to manage the health and safety of employees in the workplace; or
  • the organisation reasonably believes that the disclosure is necessary to lessen or prevent a serious threat to the public’s or an individual's health, safety or welfare.

Taking these permitted uses of health information into account, we consider that the Health Records Act (and other applicable privacy legislation couched in similar terms) creates an authorising environment for employers to disclose health information if necessary to manage health and safety risks. Of course, if you are concerned that privacy laws may be infringed by your intended disclosure of information, you should seek specific legal advice.

Communications with employees and external stakeholders

Communications with employees and external stakeholders will play a crucial role in responding to the COVID-19 outbreak.

Employers should maintain a dialogue with employees, customers and suppliers in order to minimise the impact on their professional relationships and their reputation.

Employers’ communications should be consistent with the most current expert advice, including the advice of the WHO, Australia’s Department of Health, and the Australian government’s travel advice.

Communications should also be cognisant of growing fears relating to COVID-19’s potential consequences.

Economic downturn and business continuity

The COVID-19 outbreak has already had a significant impact on the economy. It is expected that many businesses will continue to face reduced revenue.  For example, COVID-19 may trigger a downturn in production or a reduction in customer activity.

Cutting costs is the likely first response to these circumstances. However, it is crucial that employers are compliant with their legal obligations when implementing cost reductions. For example meeting consultation obligations under the award or enterprise agreement.

There are a range of options available in order to lawfully secure business continuity during the current economic climate. Employers should obtain legal advice to discuss their options and to ensure that their chosen course of action is compliant.  Options could include:

  • Standing down employees if work stoppages are required
  • Directing employees to perform alternate duties or work at alternate locations
  • Entering into agreements with employees to work reduced hours, have temporary salary reductions, take accrued personal, annual and/or long service leave, or other flexible options
  • Reducing the non-permanent workforce

Take out for employers

Complex legal and operational issues arising from the COVID-19 emergency are only just emerging. Employers need to be taking steps now to prepare for disruptions to their workforce and business-as-usual environment. Take heed of the suggestions above, and seek advice at an early stage to ensure your responses are lawful and not creating additional sources of legal exposure.


Karl Rozenbergs

Employment lawyer Karl Rozenbergs advises clients in adverse action claims, on negotiating enterprise agreements and much more.

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