Virus pay labyrinth confronting employers

THE rapid spread of COVID-19 is impacting our community in many ways.

While much attention has rightfully been focused on protecting vulnerable workers, Coulter Roache has also heard from business owners concerned that a wrong decision could result in legal liability.

The federal and state governments’ direction to employers are:

IF a worker has returned from overseas, they should be directed to stay at home for at least 14 days or until medical clearance is received; IF any worker is displaying cold and flu like symptoms they should be directed to stay home until a medical clearance is received; and

FLEXIBLE working arrangements, including working from home, should be implemented.

Are employers obligated to pay workers for such absences, and if so, how should such payments be characterised?

For example, if a worker returns from overseas and is in good health, time spent away from work pursuant to the Government’s self-isolation direction would not ordinarily be characterised as sick leave.

Likewise, a worker may display symptoms of an illness that would normally mean they were fit to work. In such circumstances, is it right for an employer to automatically characterise such an absence as sick leave?

Often employers can afford to pay employees for the type of absences described above. Not every business can afford to be that generous.

What is the answer?

Whether or not an employer must pay employees or has the option to withhold or even reduce payments for coronavirus-related absences requires a precise analysis of:

THE type of workplace and the services or products provided; and THE circumstances under which an employer directs an employee or employees to stay home.

Although the drafters of the Fair Work Act did not anticipate a situation such as a pandemic, there are provisions and procedures which expressly outline the rights and obligations of parties to an employment relationship that can be adapted to these circumstances.

Section 524 (1) of the Act provides that an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a number of circumstances including: INDUSTRIAL action (other than industrial action organised or engaged in by the employer);

A BREAKDOWN of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or

A STOPPAGE of work for any cause for which the employer cannot reasonably be held responsible.

If an employer stands down an employee during a period in accordance with Section 524, it is not required to make payments to the employee for that period.

Section 524 is intended to relieve an employer of the obligation to pay wages to employees who cannot be usefully employed in certain limited circumstances that may include the predicament all employers are currently facing.

If the Federal Government imposes limits on gatherings of 10 people or more or directs a complete lockdown of society, many employers will have no choice but to shut their doors and send their workers home. * This column is general in nature and details were correct at time of writing. Business owners facing questions of whether or not to pay workers are advised to seek targeted industrial relations advice and to ensure that details presented here remain current.

Martin Reid is the managing principal, workplace relations, at Coulter Roache.