On 22 March 2020, the Prime Minister, announced new measures and restrictions to help prevent the spread of COVID-19. The Prime Ministers announcement contained stage 1 restriction which have come into place at 12:00 pm 23 March 2020 and will have effect on a wide range of businesses. The states of New South Wales and Victoria have implemented further measures including that children remain at home to protect against the further spread of COVID 19.

The World Health Organization (WHO) is reporting that individuals with COVID 19 may be contagious even before they show symptoms and increased number of COVID 19 cases is appearing in majority states and territories.

This guide is intended to provide employers with a brief synopsis of situations that they are likely to encounter during this difficult time. Every employer’s situation is unique and specialist advice should be sought prior to any action taken.

Can employers stand down employees under section 524 of the Fair Work Act 2009 (Cth)?

For National System Employers, section 524 of the Fair Work Act 2009 (Cth) (‘FW Act’) provides that an employer may stand down an employee during a period where the employee cannot be usefully employed. Section 524(1) of the FW Act provides a narrow set of criteria which gives rise to the opportunity for employers to stand down employees as follows:

  • (a) because of industrial action (other than a lockout);
  • (b) a breakdown of machinery or equipment; or
  • (c) stoppage of work for any cause outside of the employer’s control.

Where any of the above circumstances apply, an employer may stand down an employee for a period. It is noted that the above stand down provisions apply to full-time, part-time and casual employees.

With respect to section 524(1)(c) of the FW Act, a stand down may only apply where the employer cannot reasonably be held responsible for the stoppage of work.

We anticipate that until the Australian Government issues a health direction which requires quarantining of employees’ section 524(1)(c) of the FW Act ‘stoppage of work for any cause outside of the employer’s control’ the employer cannot safely rely on the stand down provisions under the FW Act. This is because a stoppage of work has not been directed by the authorities.

During a period of stand down the employer is not required to pay an employee for the stand down period as it is essentially an absence from work, at the employer’s initiative (in accordance with s 524), that is unpaid.

Do we have to pay employees if a business is shut down due to safety concerns?

Whether employers will have to pay employees when a business shuts down due to safety concerns will depend upon the circumstances of the shutdown of the business.

In circumstances where a business is shut down after an employee has tested positive for COVID 19 and there is no alternative way of conducting business, then section 524 may apply.

In circumstances where a business is shut down based on safety concerns at the initiative of the employer, then an employer is unable to rely upon section 524 and employees should be paid their ordinary rate of pay. Employers should consider alternative arrangements, such as working remotely.

Should we let employees go?

In the case of casual employees, employers may wish to consider reducing the casual working hours. This may assist employers in balancing their workforce without the need to take drastic measures of letting full time or part time staff leave.

It is also important to note, that should part-time, and full-time employees be terminated as a result of no work being available this will trigger a redundancy which can be costly for businesses.

What should employers do with employees if you they don’t have useful work for employees?

If employers do not have any active duties for their employees, then the employees should be stood down on unpaid leave. An employer can choose to pay employees at their discretion. If this is the case, and to avoid confusion, the employer should ensure employees clearly understand the payment is discretionary, not an entitlement.

What if my employee has to self-isolate as a result of travel?

If an employee has travelled at the initiative of the employer, the employee is to continue receiving their ordinary pay of rate during the 14 days self-isolation period.

If an employee has travelled on their own accord, then employee must self-isolate for 14 days. During this period the employer should seek to negotiate flexible work arrangement (if this is possible) or request employees to use their leave entitlements.

If an employee has travelled and has taken ill upon their return, the employee must self-isolate for 14 days. During this period the employee is entitled to their sick leave entitlement subject to a satisfactory medical certificate.

Can I stand down an employee who appears unwell?

If an employee becomes unwell whilst at work and the employer has formed a reasonable view that the employee is unwell, the employer may direct the employee to go home. The employee is to be paid for the remainder of that day. Thereafter, the employee may use their accrued unused leave or sick leave entitlements.

What should I do if my employee has COVID 19?

If an employee has tested positive for COVID 19, the employee must provide their employer with a medical certificate. During this period the employee will receive their accrued unused leave entitlements. If the employee does not have any accrued unused leave entitlements, the employee will remain on unpaid leave.

Way Forward

Employers should contact one of our friendly solicitors at JFMLAW if they need any assistance or innovative strategies to manage their employees during these difficult times. We remain in the office ready to assist employers during these difficult times.