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The Impact of COVID-19 for Employers

By 7 April 2020May 20th, 2022Employment
The Impact of COVID-19 for Employers

Workplaces around Australia are currently facing an unprecedented circumstance as the COVID-19 pandemic takes hold across the world. In a fluid situation, Federal and state governments have announced a rolling set of measures to try and prevent the spread of the virus as well as offset its terrible economic effects.

Employers have been placed in an extremely difficult situation for which many of them will be completely unprepared. Many businesses around the country have already temporarily closed or gone into ‘suspension’ as their workforces, their activities and their revenues are severely impacted by the pandemic.

This article attempts to provide some general guidance on some of things employers need to be aware of in dealing with this terrible event. Advice is basic in nature as the responses of our governments are ever-changing, reflecting the situation both here and overseas.

A reminder that it will always be helpful before you take any action to discuss your situation with legal professionals who have experience in employment law issues, such as Felicio Law Firm.

Key things to remember

Employers need to consider both a proactive and reactive approach to the impacts of COVID-19 on their workplace.

A proactive response involves developing reputable sources of information on the progress of the pandemic, beginning with the Commonwealth Department of Health at Employers then need to urgently develop a plan for communicating with their workforce around the clock to inform them of health issues, employment matters and the continuity of the business. Whether they are ‘essential’ workers still attending the workplace, or employees working remotely from home, employers should keep them informed of the recommended standards of hygiene, the importance of social distancing, the signs to look out for of COVID-19 infection and what to do if an employee believes they are sick.

Perhaps the most important aspect of the employer-employee relationship at the moment, therefore, is open communication. The consequences of large-scale shutdowns across the economy and society is that many people will either have to work from home, take paid (or unpaid) annual leave or long service leave, be stood down until work can resume, or in the worst scenario, made redundant from the business.

Employers owe both their employees and third parties such as contractors and clients a duty of care in regards to their health and safety, including during the COVID-19 pandemic. This means employers need to carefully consider the legal framework in which they operate, including the terms in contracts of employment, workplace legislation, any internal policies and procedures, as well as relevant awards and enterprise agreements.

Telling workers they must attend the workplace, for example, or suggesting disciplinary action will be used if an employee doesn’t attend work could amount to a serious breach of the employer’s duty of care as well applicable health and safety legislation in each state. This would particularly be the case if an employee subsequently contracted the virus during the course of their work, exposing the employer to a potential workers’ compensation claim.

Should an employee be confirmed to have the virus, the employer must take immediate steps to advise and protect all other employees and third parties who may have had contact with the employee. This may also involve undertaking a deep cleaning of the workplace. But in notifying other parties about possible contact with a COVID-19-positive worker, employers need to carefully consider the employee’s right to privacy.

Employers should also be aware that if a visitor or other third party contracts the virus as a result of contact with one of your employees, your business may be the subject of a public liability claim by that person seeking damages for the injury.

Other important considerations

For the reasons discussed above, it is vitally important that employers keep a clear and organised paper trail of all decisions made at this time. This is imperative if later claims against you arise.

Employers also need to ensure they are on solid legal footing before making permanent employees redundant at this difficult time. Standing down employees is preferable to redundancy as businesses can ‘reanimate’ their workforce once the danger posed by COVID-19 has passed. The announcement of the Job Keeper package by the Federal government on March 30 (see below regarding eligibility) will also help employers avoid the difficult issue of redundancy.

Nevertheless, employers need to remain cognisant of the provisions of the Fair Work Act (FWA), where standing down workers without pay where the employee can’t be usefully employed is only valid under very limited circumstances. It’s unclear as yet as to whether a pandemic event which is beyond the employer’s control satisfies these provisions of the FWA so proceed with caution and seek legal advice.

Employers need to be aware that the statutory entitlements of employees remain protected despite being stood down or made redundant. Redundancy must still qualify as a genuine redundancy otherwise employers may be subject to a later adverse action claim by the employee.

Creative solutions around employees taking leave entitlements or even leave without pay in order to retain them as part of the workforce will be required of employers.

Job Keeper announcement

The Federal government’s announcement of a $1,500-a-fortnight Job Keeper subsidy on March 30 will certainly help many employers avoid the fraught issues around redundancy and staff stand-downs caused by the COVID-19 pandemic.

The package, designed to help employers keep staff ‘on the books’ for the duration of this event, requires certain eligibility criteria detailed below.

Eligible employers are businesses (including companies, partnerships, trusts and sole traders), not-for-profits and charities:

  • With a turnover of less than $1bn that have lost 30% or more of their revenue compared to a comparable period a year ago;
  • with a turnover of $1bn or more and with at least a 50% reduction in revenue compared to a comparable period a year ago.

Eligible employees are those:

  • Employed by an eligible employer at 1 March 2020;
  • who are sole traders, full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020;
  • who are at least 16 years of age.
  • who are Australian citizens, holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.

In conclusion

The phrase “uncharted territory” has been used a lot to describe the COVID-19 pandemic. A necessary mass shut-down of the economy is clearly a crippling event for thousands upon thousands of businesses. But as a rule-of-law country, our legal structures and rules remain in effect and it’s incumbent on employers – while making fast decisions under pressure – to maintain a legal and ethical approach to what are essentially emergency procedures in order to avoid liability once the pandemic is over.

Felicio Law Firm is across the pressing employment issues involved in responses to COVID-19. We have broad experience advising NSW and Queensland firms on all matters of employment law so contact us today to assess your situation if you have urgent issues relating to the pandemic and its effect on your business and workforce. (02) 4365 4249 or