Frequently asked legal employment questions relating to COVID-19

By Naomi Neilson|25 March 2020
employment law

The spread of the viral coronavirus has posed a unique set of challenges for workplaces. One BigLaw firm answers the major legal questions around employment.

The most common questions asked at this time relate to whether employees can be stood down without pay because of COVID-19 and the options that are available to avoid giving out redundancies in light of the current economic global crisis.

King & Wood Mallesons said it is vital to “stay ahead of the constantly evolving situation”, particularly for businesses that are being hit the hardest. The directives by all territory and state governments will need to be carefully considered to determine the impact.

“We are now moving toward an unknown, and until recently, unimaginable situation from Australian internal borders being closed and a possible full [shutdown] of all non-essential activity across the country,” said solicitors Philip Willox, Andrew Gray, Ruth Rosedale and Angela Weber, only moments before the Prime Minister announced the full shutdown.


“There will be a fine balance to be struck over the coming period as workplaces are forced to adjust to external forces on an unprecedented scale at an unprecedented speed.”

Can employees be stood down without pay because of COVID-19?
It’s important to first note that there is no general right to stand down an employee without pay and the legal position will depend on the circumstances affecting the workplace.

KWM said relevant awards, industrial agreements and employment contracts could have something to say about the circumstances in which a stand down pay can be implemented and what steps have to be taken to do so appropriately and by law.

However, there are options to avoid redundancies
There are stand down provisions as part of the Fair Work Act that employers can refer to in light of the coronavirus pandemic as a direct or indirect result of the stoppage of work, “for which an employer cannot reasonably be held responsible”.

The way this works is the provision allows for the default power to stand down a member of staff without pay where the employee cannot be usefully employed, including stoppage of work for any cause which the employer cannot reasonably be held responsible for. For example, managing finances in the coronavirus pandemic is out of the employer’s control.


“This is untested in the context of the pandemic. However, given the announcements by certain state governments of the directed [shutdown] of non-essential services, the [stand down] becomes a real possibility for employees who cannot be usefully employed.”

How can employees still be usefully employed in light of shutdowns?
Here is where the option of annual leave, long service leave or unpaid leave can be used to avoid terminating an employee’s contract during the coronavirus pandemic. It can then set up the business to return to work as usual when the pandemic is under control.

“As there are various ‘essential service’ carve-outs to [government-mandated] ‘[shutdown]’, the question will be how such an order impacts each business and whether an employee can still be usefully employed,” wrote the KWM employment solicitors.

They added that this requires an examination of whether there is work available that can contribute beneficially to the “reasonable and efficient” conduct of the business, or if there is potential for the business to obtain benefit or value from keeping an employee on, even if the work itself may not be in the “ordinary scope of work or duties”.

Methods of maintaining employment may require exploring different roles, which includes alternative locations, flexible working arrangements and working remotely.

“In circumstances of a [government-mandated] ‘[shutdown]’, there is scope more generally for agreement to be reached between employers and employees for utilisation of annual leave or long service leave where they are available or other ‘special leave’,” KWM wrote.

When can’t an employer stand down an employee?
“Employers must be aware that a stand down does not apply when employees are already authorised to be absent from work,” KWM wrote. “If an employee is unwell or caring for a family member or member of the employee’s household who is unwell then it is personal leave. A period of self-isolation without being unwell is likely to be unpaid.”

Employers should look to consider alternative means of reducing their labour costs, such as directed leave periods, reduced hours working arrangements or salary reductions. The arrangements can only be implemented with employee consent and the terms around the industrial instruments “will need to be clearly navigated”.

“These exceptional circumstances require unique solutions,” KWM wrote.

“Some large corporates are already exploring arrangements to provide continuing options for employment for their workforces by supplying employees to a third party or on a labour hire or secondment basis. Whilst such arrangements pose their own legal issues they will also enable employers to avoid periods of stand down or resorting to redundancies.”

Employer obligations to workplace health and safety amidst coronavirus
Where workplaces do have the ability to remain open and operational, employers should be considering the workplace health and safety (WHS) considerations.

According to KWM, this includes the following:
· Keeping employees informed of government travel and health advice
· Establishing a “task force” or group of employees to monitor the latest information, reporting back to management and assisting in decision-making
· Implementing the WHO guidance to ensure that surfaces and objects are wiped with disinfectant regularly, promoting frequent handwashing and providing hand sanitisers in prominent places around the workplace
· Escalating restrictions in relation to work-related travel
· Repatriating employees from “at risk” locations
· Asking employees to notify of travel to “at risk” locations and any contact with those exhibiting symptoms and implementing 14-day self-isolation requirements
· Reminding employees that they also have a duty to take reasonable care for their own and others’ health and safety
· Implementing various forms of social distancing at the workplace

WHS considerations for employees working from home
As part of the “flatten the curve” initiative, many businesses have moved to promoting all employees to pursue remote working arrangements. This comes with its own set of WHS obligations that employers should be considering.

According to KWM, there are two WHS risks that should be considered:

· The basic duties outlined above remain relevant to each workers working at home arrangements. Given the scale of the transition to remote working, it is important that employers work with employees cooperatively to ensure remote working is as safe as possible in all the current circumstances, and

· Mental health – the current circumstances will be stressful for most employees – anxiety about the spread of the virus; impacts on family and friends; dislocating the normal routine; social distancing and isolation; concern about the impact on jobs and the economy; and trying to maintain a normal work situation.

Frequently asked legal employment questions relating to COVID-19
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