In these unprecedented times, when many businesses have had to make the incredibly difficult decision to close their doors as a result of COVID-19 or restructure the operation of their businesses altogether, both employers and their employees are seeking answers as to who has what rights and obligations.
The Federal Government has introduced legislation which amends the Fair Work Act 2009 (Cth) as part of the new JobKeeper scheme. (Note that, at this stage, the changes are temporary and will end on 28 September 2020). The key driver is to provide employers with more options to manage wage costs so that businesses can survive the pandemic and keep employees employed.
The new provisions enable employers who qualify for the JobKeeper scheme, and who are entitled to JobKeeper payments for their employees, to give directions called ‘JobKeeper enabling directions’. In certain circumstances, this means that employers can temporarily:
- stand down an employee (including by reducing their hours or days of work)
- change an employee’s usual duties
- change an employee’s location of work.
The new provisions also enable such employers to make agreements with their employees to change their days and times of work and take annual leave in certain circumstances.
See below for more detail on key issues for both employers and employees:
1. Can employers force their employees to take annual leave?
Yes – If an employee has accrued more than 2 weeks annual leave, then employers can force employees to take this ‘excess’ leave.
The new provisions enable an employer who qualifies for the Jobkeeper scheme:
- to request an eligible employee to take paid annual leave (if they keep a balance of at least 2 weeks)
- to agree in writing with that employee for them to take annual leave at half their usual pay for twice the length of time.
Employees who make an agreement to take annual leave still accrue their usual leave entitlements for the period the agreement applies (as if the agreement hadn’t been made). Service is considered continuous for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).
If an employer asks their employee to take annual leave, the employee has to consider the request, and can’t unreasonably refuse it.
2. Can employers force their employees to take long service leave?
There has been no change to the Fair Work Act in relation to this issue. An employer may proactively encourage employees to take their long service leave as an alternative to being stood down without pay or being made redundant.
Taking long service leave should be mutually agreed between the employer and the employee, noting there is still a requirement that an employer give an employee at least 12 weeks’ notice in writing to take their long service leave. (If the employee does not want to take their leave at the time nominated by the employer then they can apply to the Industrial Division of the Magistrates Court).
3. Can employers reduce the hours their employees work or stand them down?
Yes – Employers who qualify for the Jobkeeper scheme may, in certain circumstances, direct an eligible employee to work fewer hours or days (including no hours – i.e. stand them down).
Employers can only give an employee a ‘JobKeeper enabling stand down direction’ if the employee can’t be usefully employed for their normal days or hours because of changes to (including closure of) the business that are attributable to:
- the coronavirus pandemic, or
- government initiatives to slow the transmission of the coronavirus.
An employer needs to make sure that the direction isn’t unreasonable, taking into account all of the circumstances.
Note that a JobKeeper enabling stand down direction must be in writing. Employers also need to:
- notify the employee and consult the employee (or their representatives) at least 3 days before issuing the direction (unless the employee genuinely agrees to a shorter timeframe)
- keep a written record of the consultation.
The employer must pay the employee the greater of the Jobkeeper payment ($1,500 per fortnight) or their usual pay for any hours that the employee does work.
If an employee is taking paid or unpaid leave (such as annual leave) or is otherwise entitled to be absent from work (such as on a public holiday), the direction doesn’t apply.
Employees subject to a JobKeeper enabling stand down direction still accrue their usual leave entitlements for the period the direction applies (as if the direction hadn’t been given to them). Service is considered continuous, including for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).
Employees who are subject to a JobKeeper enabling stand down direction can request to take on secondary employment, training or professional development. Employers must consider these requests and can’t unreasonably refuse them.
4. Can employers change the days or hours an employee works?
Yes – by agreement with an eligible employee that they will perform their usual duties on different days or times than usual.
The employer needs to make sure that:
- performance of the duties on different days or at different times is safe considering the nature and spread of coronavirus and is reasonably within scope of the employer’s business operations; and
- the employee’s usual work hours aren’t reduced (reducing work hours would require a JobKeeper enabling stand down direction – as per item 3 above).
The employee can’t unreasonably refuse an employer’s request to make such changes and any agreement must be recorded in writing.
5. What if an employee cannot attend work as a result of school or childcare closures during the COVID-19 period?
Employers should allow employees to work from home where possible. Employees who cannot work as a result of school closure or child centre closure will need to use their leave entitlements during their absence.
6. What if an employee is absent as a result of COVID-19?
When an employee displays symptoms or is diagnosed with COVID-19, the employee will be entitled to access any accrued paid personal leave. If an employee is providing care to a member of their immediate family as a result of COVID-19, carers leave is applicable. Importantly, where an employee is self-isolating in compliance with government directions, the default position is that the employee will not be paid, however employers may choose to offer to provide paid leave.
Under the Fair Work Act, an employee is protected from being dismissed because of their temporary absence due to illness.
7. Redundancy
Employers may choose to make positions redundant where those jobs no longer need to be done by anyone, (noting they will then have to pay redundancy entitlements).
8. What obligations do employers have to employees to protect them against COVID-19?
Employers have an obligation to their employees to ensure, as far as reasonably practicable, the health and safety of their employees and all persons in their workplace. During the COVID-19 period, this obligation means that employers must at least:
- Provide information about health risks associated with coming into contact with COVID-19;
- Provide instruction about how to minimise the risk of exposure to COVID-19; and
- Monitor, assess and take steps to reduce the risks that COVID-19 poses to workers in a workplace.
Employers should stay up to date with current advice being provided by state and federal health departments, DFAT and WHO and should be restricting travel (employers can restrict business travel by employees), providing adequate hygiene facilities, putting into place social distancing, self-isolation and quarantine protocols and having a contingency plan for when an employee tests positive to COVID-19.
General Advice
In addition to the above, amendments were made to numerous Awards to allow for unpaid pandemic leave.
Note that this advice is of a general nature only. Relevant Awards and the Fair Work Act still apply (including the unfair dismissal provisions) and employers should obtain appropriate advice on their specific circumstances before changing employment terms.