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Lockdown – An Employer FAQ

From Sunday, 18 July 2021, most workplaces in Greater Sydney have been declared closed to the public. This lockdown has now expanded to parts of regional NSW and other capital cities.

This means that many employers have had to stand down some or all their employees under the current lockdown restrictions.

So, what is it that employers can and cannot do during this lockdown?

Looking back on the last week, we compiled a list of FAQ to assist employers.

Snap Lockdowns and What it Means for Employers and Employees

At 11 am on 7 July 2021, NSW Premier Gladys Berejiklian announced that the lockdown for Greater Sydney and surrounding factions will extend at least until Friday, 16 July 2021. This represents a three-week lockdown whereby affected residents must stay at home causing many businesses into a temporary cessation of operation. Not only do such conditions create hardships for employers but also for employees, many of whom are not required for work and, in some cases, are going without pay. In this client alert, we examine what options are available to employers to protect themselves and their employees during these snap lockdowns.

What are the Current Restrictions in Greater Sydney and How does it affect Businesses?

Generally speaking, when State governments issue a public health direction for residents to ‘remain at home’, the effect has been that members of a household cannot leave their homes except for specific reasons. For example, under the Public Health (COVID-19 Temporary Movement and Gathering Restrictions) Order 2021, dated 26 June 2021, made under the Public Health Act 2010 (NSW) (“Order”), residents of Greater Sydney cannot leave home unless:

  1. obtaining food or other goods and services in Greater Sydney; or
  2. for the purposes of work or education if it is not possible to do it at home; or
  3. exercising in Greater Sydney; or
  4. medical or caring reasons, including obtaining a COVID-19 vaccination.

There has been some confusion as to direction ‘a.’ above as it has been widely reported in the media that residents of Greater Sydney can leave home to obtain ‘essential items’ or for food and groceries only. However, the Order does not define what is an ‘essential item’ so, in effect, any business that provides goods or services, whether public facing or not, has not been mandated under the Order to cease trading or to perform its normal function.

Nevertheless, for certain industries, such as hospitality and retail, the Order has had the effect of reducing traffic to such an extent that, for many employers, to remain open while continuing to pay its permanent employees, is commercially imprudent. This has potential implications for employers as we discuss below.

What Protections are in Place for Employers who Temporarily Cease Operations during Lockdown?

When the country was first faced with COVID-19 and the reality of nationwide lockdowns, the Federal Government introduced the JobKeeper programme, providing employers with the flexibility to direct their permanent employees to either work reduced hours and/or in different roles, or not to work at all, and still receive defined minimum fortnightly remuneration. The premise behind the JobKeeper programme was to protect both employers and employees from financial hardship during temporary business closures or a reduction in operations. The JobKeeper programme concluded on 28 March 2021 and has not been reactivated even in light of current lockdowns in Greater Sydney and elsewhere across the country.

Furthermore, when JobKeeper was first introduced, the Fair Work Commission also made temporary amendments to several modern awards which allowed for a combination of flexibilities where, depending on the award, employees were entitled to:

  1. take annual leave where available at short notice;
  2. take annual leave for a full day, at the rate of half pay, and at the expense of a half day’s annual leave;
  3. work reduced hours where the employee could not usefully be employed for the employee’s normal days or hours due to the COVID-19 pandemic or where government initiatives were in place to slow the transmission of COVID-19; or
  4. take two weeks’ unpaid pandemic leave.

With some exceptions (for example, the entitlement to take two weeks’ unpaid pandemic leave under the Restaurant Industry Award 2020 is operational until 31 December 2021), these award flexibilities are no longer in place.

So, where an employer cannot usefully deploy its employees due to temporary closures as a result of the lockdown, what legal apparatus is in place to stand employees down?

Section 524 of the Fair Work Act 2009 (Cth) (“the Act”) allows for an employer to stand down its employees where, amongst other reasons, there has been “a stoppage of work for any cause for which the employer cannot reasonably be held responsible”. This is where the lines are somewhat blurred. In the event a government direction forbids an employer from conducting a business or undertaking for public health reasons, it is uncontroversial that the employer can rely on section 524 of the Act to stand down its employees, and without pay if it so chooses. However, if an employer simply faces the reality of a reduction in trade volumes or where it is merely uneconomical to continue to pay its staff during the lockdown, it might not be considered a “stoppage” within the meaning of section 524 of the Act.

Whilst some mandates are in place (such as the wearing of masks within an indoor workplace) the NSW Government, by not defining ‘essential items’ or ‘essential services’ under the Order has, in effect, not expressly forbidden any businesses from operating. Hence, in the event of a claim by an employee, employers who opt to rely on section 524 of the Act in standing down employees without pay would likely need to demonstrate that the Order has obliged them to temporarily cease operations rather than simply made it uneconomic or otherwise difficult to continue operations during the temporary lockdown.

What can Employers do to Mitigate this Risk?

The Federal and State governments agreed that the Federal Government would consider options to support employees during COVID-19 lockdowns. However, State Governments agreed to consider and implement assistance to businesses throughout their own states.

Accordingly, on 29 June 2021, the Berejiklian Government announced new grant packages and changes to the Dine and Discover programs to assist small business and people across NSW impacted by the current COVID-19 restrictions.

In this regard, the package includes grants of between $5,000 and $10,000 for small businesses, a tourism COVID-19 support package, payroll tax deferrals for all employers, an extension of the Dine and Discover program to 31 August 2021 and the ability for people to use the Dine & Discover vouchers for takeaway delivered directly to their home by the venue itself.

In particular, the business grant amounts will be available for businesses depending on the decline in turnover experienced during the restrictions, being $10,000 for a 70% decline in business, $7,000 for a 50% decline in business and $5,000 for a 30% decline in business. The Premier stated the small business support grants were aimed to help businesses by alleviating cashflow constraints while trading is restricted. The grants can be used for business expenses such as rent, utilities and wages.

Notably, businesses will be able to apply for the grants through Service NSW from late July and will need to show a decline in turnover over across a minimum two-week period after the commencement of the major restrictions which came into place on 26 June 2021. Full eligibility criteria will be available on the Service NSW website.

In addition, Service NSW currently has a number of other support assistance available on their website including export assistance grants, travel support program, taxi industry support package, electricity and gas network relief package, small business fees and charges rebate, jobs plus program and the like.

Is There Assistance for Employees during the COVID-19 Lockdown?

A Federal Government assistance programme for employees affected by the lockdown in Greater Sydney has been put in place. In the event employees have been adversely affected by a public health order and cannot attend work or have lost income after day 8 of a ‘COVID-19 restriction of movement event’, those affected employees can apply for the COVID-19 Disaster Payment through Services Australia. In this scenario, and based on other criteria such as age, residency status and assessable liquid assets, the affected employee must also not have access to paid leave entitlements through the employer, cannot be in receipt of another income support payment and can only be applied for after the seventh day of lockdown where attendance at work has not been possible. This is of particular relevance to casual employees.

Additional support has been made available through the Pandemic Leave Disaster Payment. This benefit is available to employees who:

  1. have COVID-19;
  2. have been in close contact with a person who has COVID-19;
  3. cares for a child, 16 years or under, who has COVID-19; or
  4. cares for a child, 16 years or under, who has been in close contact with a person with COVID-19.

Again, eligibility criteria applies but this benefit is of particular relevance to an employee who has been directed to self-isolate by NSW Health in instances where, through contact tracing, is determined to be a ‘close contact’ with a COVID-19 case or is diagnosed with COVID-19.

It is a matter of good policy and serves as a mitigating factor against any potential legal claims, for employers to be aware of, and direct their employees to, these support regimes, particularly where employees find themselves either stood down by their employer or directed to self-isolate by health authorities, and their income earning capacity suffers as a result.

Industries that are Particularly Affected

An employer’s ability to direct employees to receive a COVID vaccination when available may be a matter for our higher courts to determine; however, on 28 June 2021, the National Cabinet agreed that COVID-19 vaccinations are to be mandated for residential aged care workers as a condition of working in shared state, territory, and Commonwealth facilities. Furthermore, NSW workers specified in the NSW Airport and Quarantine Workers Vaccination Program can only enter the workplace or provide services if they have received at least the first dose of a COVID-19 vaccine. This provision commenced at 12pm on 28 June 2021.

Vaccination obligations applicable to certain industries will likely continue to evolve. The aged care sector, unsurprisingly, was the first industry whereby the National Cabinet declared it a mandatory requirement for employees to be vaccinated against COVID-19 and other industries such as health care, hospitality, food preparation and sanitation are likely to be scrutinised for mandatory vaccination moving forward.

As such, we remind our employer clients that it is prudent to, at least, have in place a COVID-19 vaccination policy as part of a suite of human resources policies as this pandemic situation evolves. We are ready and able to provide a bespoke COVID-19 vaccination policy to our clients as needed.

If any further information in relation to any aspect of this alert is required, please do not hesitate to contact us. Otherwise, we are available and ready to assist should you require any specialist employment law advice or legal support at this time.

This alert is not intended to constitute, and should not be treated as, legal advice.

Employment Law Changes from 1 July 2021

The beginning of the financial year marks a number of important changes to the employment law area. These changes, relate to minimum wages, the unfair dismissal threshold, the Fair Work Information Statement and changes to the Superannuation Guarantee rate. A summary of the changes to come and what this means for your business is covered in this alert.

Performance Management How To Do It Right?

This time of year is typically when both employers and employees buckle down for mid-year performance appraisals. It can be a stressful time for some for many reasons. From an employer perspective, performance management and annual or bi-annual reviews instill dread as managers are tasked with conducting individual performance reviews. However, despite the angst and stress that accompanies performance reviews, not much else is achieved as a result of the review, other than to tick the relevant box stating they have been done. This surely cannot be the purpose of performance reviews. It certainly does not constitute appropriate performance management and the consequence of failing to have hard conversations can be costly.

The Government’s Response to the Sex Discrimination Commissioner’s Report on Sexual Harassment in the Workplace

We have written previous articles regarding the #metoo movement and sexual harassment and what this means in the context of employment law. Community expectations are rapidly changing in this area especially as the issues of sexual harassment and sex discrimination have come to the fore in recent times as a result of the increased media attention following allegations being aired about sexual assault and inappropriate conduct in our Federal Parliament.  Sex discrimination issues continue to garner political and media attention, with the lens of sex discrimination being applied to the treatment of Australia Post’s former CEO, Christine Holgate by the Federal Government.

Terminating an employment agreement

There are many reasons why an employer and employee may want an employment relationship to end.  If the termination of the relationship is at the initiative of the employee, and the employee resigns, there is usually not any significant risk to an employer that there will be resulting claims by the employee, but this is not always the case. In this article, we examine the manner in which the relationship can be terminated and the associated risks, and how these risks may be obviated.

“Ordinary and Customary Turnover of Labour” What Does This Really Mean?

Many labour hire and contract for service employers (such as commercial cleaning, security and maintenance companies) exist as a result of contracts they have with clients for their services, for which they engage staff. When these contracts come to an end, there is no need to retain the staff and as such their positions are redundant. It has been widely accepted that if this is the manner in which these businesses did business, and it was an ordinary and customary part of the business model, then the employer would not be liable to pay the employees redundancy pay as a result of the terminations due to loss of contracts. This idea has been enshrined in the Fair Work Act 2009 (Cth) which provides that redundancy pay is not required if the termination of employment is a result of the “ordinary and customary turnover of labour”. However, there has been much uncertainty as to when this actually applies and what these words mean. There has also been significant recent judicial scrutiny of the issue.

The Impact of the UK Uber Decision on the Australian Gig Economy

When the High Court decided in 2001 that an injured courier was, in fact, an employee rather than an independent contractor, the decision had a significant impact on the relationship between workers and business. This shift is occurring again in relation to the Gig Economy. In Hollis v Vabu Pty Ltd (2001) 207 CLR 21, the Court determined that what had once been assumed as an independent contractor, being a courier delivery rider, was determined to be an employee. The Court found that factors such as level of skill, control and work hours, presentation to the public, and tools of trade were all relevant to whether the legal relationship was one of contractor or employee. The Court in effect, developed the multi-factorial test to determine this issue, which has been applied consistently since to determine whether a worker is an employee or independent contractor. Later decisions have added other qualities, such as an ability to subcontract work, in determining the nature of an engagement.

Can Employers Force Employees to be COVID-19 Vaccinated?

As the Federal Government has recently announced, the COVID-19 vaccination rollout will commence in mid to late February, a full month ahead of the previously foreshadowed commencement schedule at the end of March 2021. As business and industry of all sizes has suffered during the pandemic, not to mention the complete shutdown of international air travel, many Australians, if not looking forward to the jab itself, are looking forward to a gradual return to normalcy and it is increasingly apparent that normalcy might only return once the majority of the population have been vaccinated.

COVID-19, Working from Home, Mental Health Challenges and the Office Christmas Party!

As we have covered in previous client alerts, the COVID-19 pandemic has created a raft of unique challenges for employers striving to maintain safety, efficiency and productivity, and employees who, perhaps for the first time in their working lives, are now consistently working from home. For many of these employees, feelings of social isolation have led to reports of anxiety and depression, and with the Silly Season just around the corner, this means some serious red flags for employers. In this client alert we examine some of the current difficulties, and projected difficulties that COVID-19, will have on employees, and how best employers might deal with them.


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