Mounting COVID-19 concerns have been playing on the minds of employers and their employees, with many worried about the financial hardship that will stem from an inability to work.
We are already witnessing real world and "live" examples of large organisations having to take drastic action with their employees, Qantas being a notable example. This article provides an overview for employers in relation to their options for utilising relevant leave entitlements and the implications for casual employees in particular.
It is vital to bear in mind the unique nature of these circumstances when considering this article. Every business is different, and each businesses' arrangements with employees can be highly varied and may include unique contractual entitlements, awards or temporary concessionary entitlements that provide more employee-favourable outcomes. This article instead focuses on legislative minimums and is subject to change as state, territory, and federal governments issue new advice and relief packages.
WHAT ARE THE IMPLICATIONS IF AN EMPLOYEE OR FAMILY MEMBER IS SICK WITH COVID-19?
Sick employees, whether from COVID-19 or any other ailment, and employees caring for a sick person, are entitled to sick or carer's leave respectively.
Where available sick or carer's leave is exhausted, employees could seek paid leave, including annual or accrued long service leave entitlement. Otherwise, requesting unpaid leave is the most likely option.
Employers can ask employees for evidence of illness for any period of sick leave, however the necessity for employees to provide evidence is usually determined by company policy.
WHAT IF AN EMPLOYEE IS IN SELF-ISOLATION OR STUCK OVERSEAS?
As of 17 March 2020, it is mandatory for individuals returning to Australia from overseas to self-isolate for 14 days.
Given the unprecedented nature of the current situation, there are currently no specific guidelines or legislative schemes regarding leave entitlements for those effected. Accordingly, employees and employers must negotiate their own arrangement.
If an employee cannot work because they are subject to a Government order requiring them to self-quarantine (but are otherwise well and fit to work), the employee is not ordinarily entitled to be paid (unless they use leave entitlements). This is because the employee's inability to work relates to a Government order, and the inability has not been caused by their employer. In these circumstances, working arrangements will be at the discretion of the employer and employee. Working arrangements for employers to consider include the following:
- work from home, or where relevant or appropriate, from another remote location;
- take annual leave (although the employee would likely need to agree to this option);
- take any other accrued leave, including long service leave, or other leave entitlements under an applicable Award or contract;
- take unpaid leave; or
- a combination of paid and unpaid leave by agreement between the employer and employee.
If an employee elects to stay home as a precautionary measure and they are not unwell, they are unlikely to be entitled to sick leave. This is because medical proof or evidence of illness generally must accompany sick leave entitlements. Where an employer does not agree with sick leave being utilised, and an employee refuses to work and is not able to provide a medical or caring-based reason, the employee will not be entitled to pay.
However, the employee could come to an arrangement with their employer. These arrangements may range from working from home, taking paid leave, including long service or annual leave, or unpaid leave.
Being "stuck" overseas
On 20 March 2020, the Australian Government closed Australia's borders to all but Australian citizens and residents. Being 'stuck' overseas does not, of itself, entitle employees to compensation in any form, outside of annual leave or other routine paid leave entitlements. Of course, depending on the business, there may be circumstances in which an offshore employee may be able to continue working remotely.
EMPLOYER DIRECTED ISOLATION
Where an employer directs a full or part-time employee to stay at home in line with health authority advice, and the employee is not unwell, that employee should be paid while the employer direction applies.
Where the employee is willing and able to work but is directed not to work due to their recent exposure to an infected person or recent return from overseas that employee is likely to be entitled to pay as per usual. This does not generally mean paid sick or annual leave, but instead implies a work-from-home arrangement where possible. Similarly, directing an employee to stay at home as a precautionary measure or requiring medical clearance from a health professional is also acceptable where there is genuine cause for concern. In requiring clearance, employers must provide compensation for the duration needed to complete the test, which depending on healthcare resources may take 2-5 days. This is especially true where the employee is, at the time of testing, willing and able to work and not exhibiting symptoms. Where possible, this should entail working from home, but does not generally constitute sick leave.
An employee directed to stay at home because they have COVID-19 will be entitled to sick leave.
WHAT HAPPENS IF SCHOOLS CLOSE?
Where a parent is still required to work but is unable to due to schools / childcare centers being shutdown, an employee could utilise paid carer's leave depending on the circumstances of the closure. If paid carer's leave is exhausted, the employee would have to use paid leave entitlements (such as annual leave or long services leave) if the employee was unable to work. A work from home arrangement could also be put into place if appropriate.
WHAT DOES COVID-19 MEAN FOR CASUAL WORKERS?
Under the Fair Work Act 2009, casual employees are not entitled to leave benefits such as sick or annual leave. Casual workers are entitled to 2 days' unpaid carer's leave, or 2 days' unpaid compassionate leave per occasion. Lack of paid leave is in part compensated for by casual loading. However, through Services Australia the Australian government can provide casual employees with a 'sickness allowance', which is distributed on a means-tested basis. In the wake of worldwide COVID-19 developments, the Morrison Government has announced that the one-week wait time to access this payment would be removed (but the 5-day processing window was unavoidable).
As of 17 March 2020, the Morrison Government has made no move to require employers to provide sick leave for casual workers, partially as a result of the 'sickness allowance' scheme. It is noteworthy that this type of payment is generally lower than what casual workers make in employment, and thus even a 'sickness allowance' may still result in a financial penalty for those casuals deciding to stay at home. However some employers, such as Officeworks, Target, Kmart and Woolworths have committed to paying casual workers who are required to self-isolate1.
Casual and part-time or full-time employees are protected from dismissal as a result of personal injury or illness. Where the inability to work extends beyond a consecutive 3-month period, or constitutes 3 months within a 12-month period, an employer may have the right to terminate employment (subject to termination rules that otherwise apply). In the longer term, redundancy may become an option. Unlike temporarily standing down, redundancy requires that employer's provide redundant employees with severance or support packages, which are largely dependent on individual contracts or industry awards.
CAN I TEMPORARILY STAND DOWN MY STAFF?
Employers may temporarily stand down staff where they 'cannot be usefully employed' due to equipment breakdown, industrial action, or a stoppage of work for which the employer cannot reasonably held responsible. Qantas has stood down employees under this third category, claiming that employees have no meaningful work to do as a result of the COVID-19, which is out of Qantas' control2. Employees that are stood down are not entitled to pay. Although standing down is not available due to a deterioration of business conditions, a lockdown or significant and drastic reduction in available work, as we are observing with Covid-19, is an exceptional situation. Advantages to standing down employees include that there is no need to provide a redundancy package, and once the period of stand down has concluded the employees can return to work far more easily as they have not been 'terminated'.
The level of widespread leave entitlement usage as a result of the COVID-19 is unprecedented in Australia. Given the evolving nature of government and World Health Organisation advice in combination with the rapidly developing virus, it is important to consider each circumstance with nuance and care. In this time of uncertainty, it is recommended that employers practice open communication with employees in order to achieve robust health and safety standards while also making all efforts to ensure that business continues in the smoothest way possible.
1 Woolworths to pay casual workers who quarantine over coronavirus ➞
2 Qantas has just stood down 20,000 staff. How can they do that? ➞
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.