The Federal Court released its decision of WorkPac Pty Ltd v Rossato  [2020] FCAFC 84 (Rossato), about casual employees in the mining industry and their access to paid entitlements on 20 May 2020. Since then, the media, industry groups, unions, lawyers and the Federal government have been vocal about the impact of the decision.

In reality,if you read the decision, you will see that it does not present anything novel. It has challenged some of the practices and assumptions that have developed over time, regarding the way some employers engage casual staff.

Skene and Rossato

The Court confirmed the position from WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264FCR 536 (Skene) that the term 'casual employee' has acquired a legal meaning referable to particular attributes, including:

•    no firm commitment to the other party;

•    irregular work patterns;

•    a lack of continuity;

•    intermittency of work;

•    unpredictability; and

•    uncertainty as to the period of employment.

These all amount to flexible work, which is the essence of casual employment. The challenge has long been that the Fair Work Act 2009 does not define what a casual employee is, and that has left room for interpretation. We have provided a link to another document that discusses Rossato and Skene in more detail if you want to know more about the cases.

What was not discussed in Rossato and Skene, buthas become apparent through extrinsic information, was that the casual employeein both cases was paid less per hour than staff they worked with, who were directly employed by the mining company to do the same work. This is a significant part of the reason the various cases have been filed and pursued. The other issue being pursued is that casual employees, regardless of their learning capacity, will have difficulty accessing personal finance because banks still regard casual employment as unreliable. The unions are seeking more permanency for workers to overcome that situation.

Since the Rossato decision, the legal representatives for employees have communicated that Skene and Rossato are highly relevant to coal mining and some other parts of the economy, where the outsourced labour hire business model is prevalent. They have stated that the cases do not extend to the majority of casual employees who are engaged in small and medium businesses, and by extension, not for profits and social enterprises. Further, the cases are particularly not relevant to industries like retail and hospitality, where casual work arrangements are more likely to be irregular and intermittent, consistent with the Court’s definition and community expectations.

So, how do you deal with the excitement from casual staff that they may be entitled to back pay for accrued entitlements they previously thought they were not entitled to? Largely, it is unlikely they will be entitled to those accrued entitlements, unless they can demonstrate very similar circumstances to Skene and Rossato. What you should consider for award covered employees, is the casual conversion clause that was implemented in late 2018 after Skene was decided.

Casual conversion clauses in Modern Awards

Casual conversion clauses were added to modern awards to provide regular casual employees the opportunity to convert their employment to permanent status if they had worked regular and systematic hours over the preceding 12 months or longer.

If a casual employee does convert to permanent employment, it is based on the employee:

• retaining hours consistent with those worked as a casual employee;
• losing the casual loading;
• being reliably available to work like every other permanent employee; and
• gaining entitlements including, annual leave, personal/carer’s leave, paid public holidays and compassionate leave.

The financial impact for the employer is minimal and might be improved because the value of accrued entitlements often may be less than the value of the casual loading.

“By any other name…”

The situation has developed in particular industries, that casual employment forms a large part of the employee base. That may have arisen from a time when HR advisors considered that casual employment was the easier option to managing the performance and ending the employment of employees. However, that position changed when regular casuals, with 12 months of regular and systematic employment, were given access to the unfair dismissal jurisdiction.

Interestingly, there are many casual employees who, when given the opportunity to convert their employment to permanent status in late 2018, chose to retain their casual standing so they could remain flexible in their work hours and receive the higher hourly rate. It would be difficult for those people to now argue that they are not casual employees and so entitled to the accrued entitlements afforded to permanent employees.

However, there are industries like mining that have demonstrated they require most employees to be regular and reliable, giving them long term rosters, subject to changes from unforeseen circumstances. Largely, it is impractical for those organisations to call a casual employee in at short notice, which is the way most employers use their casual employees. This is the heart of Skene and Rossato. Just because you call an employee casual does not mean they are. Their employment status will ultimately be assessed on the true nature of the relationship.

The Rossato Effect

What has been the initial effect of the Rossato case? The decision simply confirms the characterisation of casual employment as most people already understood it.

Whilst the media have focused on the headline of casual employees ‘double dipping’, they have missed some of the important issues that will have real effect on employers. Simply put, the Rossato case has highlighted the need for employers to:

• understand the real nature and impact of the different ways of engaging staff;
• appoint staff in the way they genuinely need them to function;
• ensure that employment documents are relevant to the person receiving them and that the details are correct;
• ensure employment contracts are correctly completed and are compliant with any industrial instruments that apply to the employment relationship; and
• ensure that employment documents (e.g. pay slips) comply with the ‘Employee Records’ provisions of the Fair Work Regulations 2009.

On 17 June 2020, Workpac filed for special leave to appeal the recent Rossato decision to the High Court, so this matter is not settled and there will likely be other effects on employment arrangements, beyond any decision of the High Court.

The industrial framework can be challenging for anyone not used to working with it. There is no substitute for advice and documents drafted by a lawyer experienced in employment and industrial law. The time spent getting it right at the start could avoid costly mistakes down the track.

If you are concerned about your employment arrangements, NFP Lawyers can assist you with employment advice and the documents you need to comply with your employment obligations.

With the introduction of theCOVIDSafe app, protections were added to the Privacy Act 1988 (Cth) (the PA).

Consequently, the Fair WorkCommission recently released an update to their General Protections bench book toinclude workplace rights that are intended to protect employees and others fromdisadvantage or other adverse consequences if they decide not to download oruse the COVIDSafe app.

COVIDSafe protections

Section 94H (Requiring the useof COVIDSafe) has been added to the PA. Under this provision, a person commitsan offence if they require another person to:

1. download COVIDSafe to a communication device; or
2. have COVIDSafe in operation on a communication device; or
3. consent to uploading COVID app data from a communication device to the National COVIDSafe Data Store.

The maximum penalty that can be imposed by the courts is 5 years imprisonment or 300 penalty units or both. A penalty point is currently $210.

Also, under the PA, a personcommits an offence under Commonwealth law if they:

1. refuse to enter into or continue a contract or arrangement with another person (including a contract of employment); or
2. take adverse action (within the meaning of the Fair Work Act 2009) against another person; or
3. refuse to allow another person to enter:
4. premises that are otherwise accessible to the public; or
5. premises that the other person has a right to enter; or
6. refuse to allow another person to participate in an activity; or
7. refuse to receive goods or services from another person, or insists on providing less monetary consideration for the goods or services; or
8. refuse to provide goods or services to another person, or insists on receiving more monetary consideration for the goods or services;

becausethe other person:

7. has not downloaded the COVIDSafe app; or
8. does not have COVIDSafe in operation; or
9. has not consented to uploading COVID app data to the National COVIDSafe Data Store.

Again, the maximum penaltythat can be imposed by the courts is 5 years imprisonment or 300 penalty unitsor both.

The actions listed in (a) to(i) above, are deemed to be workplace law for the purposes of the Fair WorkAct 2009 and the benefit that the other person derives because of anobligation of an individual is a workplace right within the meaning of theGeneral Protections part of that Act.

Practical Application

Employers must be alert to theeffect of this provision and ensure that they do not breach it when they arepreparing and communicating return to work plans for their staff. There are noexceptions to the application of section 94H and whilst you can speak about thebenefits of the app in managing COVID-19 transmission risks, you must notexceed that position and appear to enforce the download of the app.

There is also a risk thatco-workers may engage in bullying conduct where they have formed an opinionthat staff should download the app and a member of the team has not compliedwith the group’s expectations. Given that all employers and their staff have anobligation, under workplace health and safety laws to take reasonable steps toprotect the health and safety (including mental health) of all people workingin and with the organisation, instructing staff that they must not engage inbullying conduct is also highly relevant.

Workers who believe they arebeing bullied may also have access to the anti-bullying jurisdiction of theFair Work Act 2009. Whilst there are no financial penalties under the Federalbullying jurisdiction, the Fair Work Commission can issue orders to stopbullying to protect the health and safety of the worker or workers affected.

If you need assistance in forming workplace policies relating workplace bullying or require advice about how to manage the risks relating to COVID-19 in your workplace, the NFP Lawyers team can assist you.

The COVID-19 outbreak has challenged workplaces around the country, testing the robustness of existing workplace standards and individual expectations. In forcing workers out of the workplace, to continue working in their homes, employers had to quickly turn their minds to whether their internal systems and policies supported remote working. Whilst this alert is not directly related to the operation of the law in Australia, it does have a natural link to your obligations as an employer. The soft skills considered go hand in hand with the considerations of managing the health and safety of your team and minimizing the chance of disputes and claims for workplace injury and illness arising from the changed circumstances in the workplace. Links to resources are highlighted.

Now thetime has come for employers to consider the COVID-19 recovery. We have learnedthrough COVID-19 that whilst we can technically do office-based activitiesoutside of the office, we are social creatures and still need to maintainpersonal connection for teamwork, project focus and quality outcomes. Beforereturning your team to the workplace, a thorough risk assessment is necessaryto ensure that your organisation complies with its workplace health and safetyobligations. A COVID-19 risk assessment should consider:

• How to achieve/maintain physicaldistancing;
• Good hygiene practices;
• Cleaning and disinfecting theworkplace;
• Any impacts requiring changes toemergency plans;
• What information will be provided toworkers;
• New or changed risks arising fromCOVID-19, for example, mental health or psychological stressors, customeraggression, high work demand, or working in isolation;
• How vulnerable workers will beprotected;
• Monitoring and reporting of possiblesymptoms of COVID-19;
• Responding to a suspected ordiagnosed case of COVID-19 in the workplace; and
• How and when the controls will beevaluated.

As part ofthe risk assessment process it may be necessary to consult, cooperate andcoordinate with neighbouring organisations, contractors, landlords or tenantsabout fulfilling work health and safety duties.

Work Health and Safety

Safe WorkAustralia has provided a range of COVID-19 resources to assist employers managetheir health safety obligations in relation to the virus. Further issues foryou to consider are:

• How will you ensure the health andsafety of your staff in the workplace and the journey to and from work;
• How will you quantify and manage thereal risks;
• How can you get property owners andco-tenants to take responsibility for managing shared environments; and
• How quickly and effectively can yourespond to possible outbreaks in your workplace.

Safe Work Australia has prepared:

• National COVID-19 Safe WorkplacePrinciples;
• Work health and safety guidance forCOVID-19;
• Information about:
• Dutiesunder WHS laws;
• Worker’srights;
• Guidanceabout vulnerable workers;
• Cleaning;
• Workingfrom home; and
• Mentalhealth guidance.

Coupled with the Queensland state government’s resources around health management, restrictions, recovery roadmap and managing related issues, there is a thorough suite of tools available for employers to manage their obligations and for employees to understand their accountabilities. Other states have released similar resources on their government websites.

Managing the return to work

The disconnected nature of remote work has presented challenges for some in managing staff effectively and for employee mental health , keeping in mind that psychological injuries are considered under workers compensation legislation in each state. Reintroducing workers into the workplace will present further challenges for both employees and employers and could pose a risk of psychological injury if not properly managed. Some people struggled with the isolation of working from home, now others will struggle with the reintegration process. As an employer, you are likely struggling with further economic issues that make employee fears fade into insignificance in your mind. However, the way you communicate to and manage your team through this time will have a lasting effect on your NFP or social enterprise operations. 

There aremany resources available for employers to access, as they prepare for andmanage the re-entry of their teams into the workplace. Accessing thoseresources, understanding them and applying them where possible, will help youthrough the transition period and reduce the risks of disputes and WHS issues.

What the organisational psychologists say

Whilstemployers didn’t have the opportunity to plan the transition into working fromhome, they do have the time and opportunity to plan how their staff andoperations transition back to ‘normal’, keeping in mind that ‘normal’ may havechanged.

Now thatthe adrenaline has worn off, the effects of stress are likely making themselvesfelt on you and your team. The fact that we do not have control over what willhappen can be frustrating and limits what we can do to return to normal. It isimportant to understand that the current situation will influence mental healthand resilience, meaning that many people are demonstrating heightened reactionsto changes.

From amental health perspective, health services have reported:

• 39% of people working from home havereported high or very high levels of stress;
• There has been a 75% increase inonline searches for help with domestic violence during COVID-19 restrictions;
• Kids Helpline has received over 50%more calls for assistance than the same time last year;
• Lifeline has received over 25% morecalls for assistance than the same time last year;
• Beyond Blue has received 60% morecalls for assistance than the same time last year; and
• Mental health experts have forecasta 25 – 50% increase in suicides that could continue for 5 years, depending onthe economic impact of the COVID-19 pandemic.

Reassess workplace culture

Now is anideal time to reassess your workplace culture. Have any positive changes comeout of the recent experience? Have you used new communication styles that haveled to improved teamwork and responsiveness? Have you and your team been morepatient and compassionate, leading to better working relationships? Have youhad a chance to get to know the people you work with and discover newpotential? Those changes can be retained and developed as you transfer back tothe workplace.

Organisational psychologists (OPs) are suggesting that your NFP or social enterprise could benefit from the recent experiences by applying your new knowledge and changing the way you do things to engage your staff more effectively. You may have also gained loyalty from your team because you demonstrated compassion for them in a time of need. The investments you made in your team over recent weeks could change the way your NFP or social enterprise operates as we transition out of COVID-19.

Employers have an opportunity to review training and update their employees on work health and safety management and to develop a robust change management plan should similar circumstances arise in the future. OPs suggest that you can:

• Build trust through honesty,relentless transparency and prompt communication;
• Provide clear information tailoredto different areas of the organisation;
• Be clear about what is changing andwhat is not; and
• Share authentic learnings,

with areminder that over-communicating during change is better than under-communicating.

There aresome tools available for employers to access to help manage the workplacechallenges, such as:

Australian Government ComCare: Supporting Others in Times of Uncertainty ; Transition back to usual workplaces
Australian Psychological Society:  Maintaining employee engagement during COVID-19 ;  Managing hazards to employee mental health during COVID-19  
Safe Work Australia:  
National COVID-19 safe workplace principles   

When youare managing the return to the workplace for you, your employees and clients,some of the things you will need to consider as reasonably possible impactsare:

• Public transport concerns (self orfamily)
• School staggered start/finish times
• Impact of clusters/outbreaks
• Further lockdowns
• High anxiety (even anger) aboutreturn to office (employees uncertain about risks)
• Pre-existing mental health issuesbeing exacerbated by work changes and stress
• Vulnerable populations being exposedto the risk of illness
• Defining a ‘sick day’ where theremay be ongoing caring responsibilities  

Understandingthe key provisions from the National Employment Standards, any applicablemodern award or enterprise agreement will also be significant as they mayimpose requirements to consult staff about changes to their work.

Flexible Work Arrangements

Before youissue a blanket direction for staff to return to work, be prepared for somepush-back. Many employees have developed a pattern of work that has resulted inthe much-touted work/life balance and they may fight a return to pre-COVID-19operations.

Vulnerableemployees will also resist returning to the workplace if they would beseriously affected by COVID-19 infection. Some workers have been advised thatit will not be safe for them to physically attend the workplace until aCOVID-19 vaccine is developed. Their employers need to consider: if there iscapacity to allow those staff to continue working from home; what will be thedeciding factors for granting long term work from home arrangements; and howwill their performance be monitored.

You shouldbe clear about why you need your team entirely in the office. Consider whetheryou can introduce scheduling to reduce over-crowding, both in the workplace andon public transport if you do need people physically present.

Developing workplace policies that genuinely reflect the needs of the organisation, including your capacity to monitor staff, will assist to protect your organisation from claims and will form the foundation of your decision making in relation to your expectations of your employees. Creating your own ‘roadmap’ will help everyone understand what is planned and what their part is in the process, which is an essential consideration when the court or commission assesses the reasonableness of your management actions. Be assured, everyone has a responsibility to ensure a safe return to work.

If you need to form workplace policies or better understand your WHS and performance management responsibilities, the NFP Lawyers team can assist you.

Everyday we see the effects of COVID-19 restrictions onsmall businesses. While our team do what they can to help  local small businesses  survive the current COVID-19 restrictions andbusiness downturn,  unfortunately somefinancial challenges do not have a legal solution.

We are aware that both the federal and state governmentscontinue to announce ways of assisting small businesses to weather the currentstorm. The latest support package is the Queensland Government’s Small BusinessCOVID-19 Adaption Grant Program. Whilst you are able to tap into JobKeeper toassist you to keep your staff and hopefully to continue some form of tradingthrough the current restrictions, this new grant may assist you to rebuild thebusiness as we start to move out of the COVID-19 restrictions.

Help for Queensland smallbusinesses to recover form COVID-19 effects

As part of the Queensland Government’s Economic RecoveryStrategy the Small Business COVID-19 Adaption Grant Program has been introducedto assist businesses with fewer than 20 employees, recover from the impact ofCOVID-19 and regenerate their business.

The program opened on 19 May 2020 and in the first day 903applications were submitted, requesting to draw on 9% of the funds available. Thereis a limited pool of funds and the funds will be allocated on a ‘first come,first served’ basis.

If you are not successful in this funding round, there areother state government grants available that you might be eligible for. You canfind more about the available grants at https://www.business.qld.gov.au/starting-business/advice-support/grants/schedule

Eligibility criteria

To be eligible, a business must:

• havebeen subject to closure or otherwise highly impacted by current shutdownrestrictions announced by Queensland's Chief Health Officer on 23 March 2020;
• demonstratethat business revenue has been significantly impacted since 23 March 2020 overa minimum 1-month period due to the onset and management of COVID-19;
• employstaff and have fewer than 20 employees at the time of applying for the grant;
• have avalid Australian Business Number (ABN) active as at 23 March 2020;
• beregistered for GST;
• have aQueensland headquarters;
• have anannual turnover over $75,000 for the last financial year;
• have apayroll of less than $1.3 million; and
• not beinsolvent or have owners/directors that are an undischarged bankrupt.

Only 1 application will be accepted from an individual ABNor a financial beneficiary of a business. Successful applicants cannot reapplyfor funding under this grant program

Objective

The objective of the program, stated on the QueenslandGovernment website, is to support small businesses subject to closure or thathave been significantly  impacted by thecoronavirus (COVID-19) shutdown restrictions, to adapt and sustain theiroperations and build resilience.

The program aims to help small and micro businesses:

• preparefor the safe resumption of trading in the post COVID-19 recovery;
• accessdigital technologies to rebuild business operations and transition to a new wayof doing business;
• respondto online opportunities, where possible, to sustain employment and maintainpotential for longer-term growth;
• upskilland reskill business owners and staff to benefit from new technologies orbusiness models; and
• embracebusiness diversification to adapt and sustain operations
• createor retain employment.

Available funding

The available grant amount is up to a maximum of $10,000per eligible small or micro business and the funding can be used towards:

• financial,legal, or other professional advice to support business sustainability anddiversification;
• strategicplanning, financial counselling or business coaching aligned to businessdevelopment and diversification;
• buildingthe business through marketing and communications activities, for example,content development (web pages, mobile apps, visual and audio media etc.);
• digital/technologicalstrategy development;
• digitaltraining or re-training to adapt to new business models;
• capitalcosts associated with meeting COVID-19 SAFE requirements;
• specialiseddigital equipment or business specific software to move business operationsonline (e.g. logistics program for online ordering); or
• meetingbusiness costs, including utilities, rent.

Grant funds can also be used towards any of the aboveactivities that were undertaken from 23 March 2020 onwards, but the projectmust be completed within a maximum of 6 months from the date of approval.

Applying small businesses must meet the eligibility andassessment criteria to be considered for funding and information about how toapply for grants can be found at:https://www.business.qld.gov.au/starting-business/advice-support/grants/grants-support

Applications for the program will close once the programbudget has been fully allocated.

Applying for the grant

The Government information to apply, complete the followingsteps on the website at https://www.business.qld.gov.au/starting-business/advice-support/grants/adaption :

• readthe eligibility criteria
• readthe application guidelines, terms and conditions and frequently asked questions(FAQs)
• applyusing the SmartGrants link:https://dtesb.smartygrants.com.au/adapt

In addition to meeting the eligibility criteria,applications will be assessed on:

• funding availability – applications will be processed on a 'first come, first served' basis, and therefore not all applications will be successful
• submission of a complete application form, with all requested supporting documentation included (i.e. your application must contain the requested supporting documentation, otherwise you will be contacted to provide appropriate evidence, and this may delay your application's progress)
• value for money, as determined by the Department of Employment, Small Business and Training (DESBT).

Further information

You can get more information about the program andapplication process by phoning 1300 654 687 or emailing adapt@desbt.qld.gov.au.

The NFP Lawyers Law team are available to assist you with any queries you may have about rebuilding or ‘pivoting’ your business as a result of COVID-19 effects.

NFP Lawyers can assist you with legal advice regarding:

• Business;
• Workplace Relations/Employment;
• Intellectual Property;
• Real and Personal Property;
• Body Corporate;
• Building and Construction; and
• Commercial Disputes/Litigation.

The Office of the Fair Work Ombudsman (FWO) has undertaken audits across the country, in the last few years, with the aim of ensuring that employers understand and comply with their obligations under the Fair Work Act 2009. Many people are aware of the media reports about high profile chefs  and large retailers  being found to owe millions of dollars in back pay to their employees. But, the FWO has not been entirely focussed on the for profit sector. Their ongoing audit regime has uncovered not for profit organisations that have failed to pay their employees properly, failed to pay superannuation and failed to provide payslips and maintain employment records.

The Fair Work Act 2009 sets out the requirements for employers and the FWO has been clear that they will not accept the excuse from employers that they are not familiar with the terms of the Act or any modern awards that may apply to a workplace.

In this alert, we shine a spotlight on a recent case reported by the FWO to help NFP employers understand what the FWO is auditing for and what you need to do to be compliant with your obligations.

NFP disability services provider to back pay $13.6m

The FWO published information on their website about a Western Australian NFP disability services provider required to back-pay employees a total of $13.6 million after discovering that they had incorrectly calculated employee entitlements using a customised wage assessment tool.

The NFP organisation, a registered charity and Australian Disability Enterprise, has entered into a Court-Enforceable Undertaking (CEU)with the FWO after self-disclosing that it underpaid 1,695 current and former employees, in a diverse range of roles including manufacturing, property maintenance, landscaping and product packaging.

The affected workers were all people with a disability and were covered by a pay structure set out in the Supported Employment Services Award 2010, that allows employees to receive a rate of pay based on their capacity to perform the work. The significant underpayments occurred between December 2011 and December 2017 and were identified after the company discovered that changes it made, to broaden the application of a tool used to determine its employees’ rate of pay, contravened the terms of the Award.

An underpayment of $13,469 943.71 for 1,694 current and former employees had been calculated for the period 12 December 2011 to 12December 2017. There were also related payments for interest and underpaid superannuation that were not quantified in the CEU.

The FWO determined, and the NFP organisation admitted, that the NFP organisation contravened section 50 of the Fair Work Act, relating to the contravention of an enterprise agreement by:

1. Failing to meet the base rates of pay in the underpinning Modern Award as required by section 206 of the FW Act;
2. Failing to pay some employees for all of their hours of work as required by clause 7 of the workplace’s 2014 Agreement; and
3. Failing to make the minimum superannuation contributions required by clause 19.3 of the 2014 Agreement.

The NFP organisation has already back paid $12.7 million to1313 workers, which includes interest and superannuation. The remaining$907,830 was required to be back paid to 382 employees within 90 days of the CEU being executed.

The FWO said that a CEU was appropriate, rather than commencing prosecution, because the NFP organisation had demonstrated a commitment to back-paying workers and setting up new measures to support their staff.

As part of the CEU, the NFP organisation undertook to fund three external audits over the next three years and establish a process for workers or their representatives to dispute their rate of pay.

The FWO stated in their media release:

“This matter serves as a warning to all organisations that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and face a massive back-payment bill. Any employers with questions about their lawful workplace obligations should contact us.”

Under the CEU, the NFP organisation must set up a dedicated hotline for its employees and hire a specialist to audit their compliance with Commonwealth workplace laws. The NFP organisation must also liaise with relevant government bodies to ensure that the back payments do not impact adversely on social security payments and they are required to display public, workplace and online notices detailing their breaches and apologising to their employees. The NFP organisation must also engage workplace relations training for payroll and human resources staff.

In addition to the steps the NFP organisation is required to take to rectify the underpayment of wages, they will also make a contrition payment, providing a total of $20,000 to two other WA-based disability NFP organisations. A copy of the link to the CEU is attached here: https://www.fairwork.gov.au/ArticleDocuments/1505/activ-foundation-enforceable-undertaking.pdf.aspx

This case serves as a reminder of the importance of seeking professional advice before implementing changes to systems that could affect wages and other entitlements of employees. It is also important to note that commercial providers of accounting or wage software packages, will not be held responsible if errors arise from using their packages, particularly if you amend the functions of the package. Purchasers must exercise due diligence to ensure that services meet the specific requirements of their organisations.

There is significant value in getting pre-emptive advice from a workplace relations lawyer and accountants conversant with your payroll obligations, to ensure that your NFP organisation remains compliant with its employment obligations.

If are unsure of your obligations as an employer or with the terms of the modern award that applies to your workplace, please do not hesitate to contact us.

On 30 March 2020, the Federal government announced implementation of the wage subsidy package to assist business owners and operators to keep their businesses functioning and people employed through the COVID-19 pandemic. Whilst approximately 500,000 businesses signed up in the first week, many did not understand that the package was a wish list at the time of its release. The Bill was yet to be drafted and put to parliament for voting. The Bill was read in Parliament on 8 March and passed. It is now available to be viewed. Links are attached for the two Bills dealing with the JobKeeper programme:

https://www.legislation.gov.au/Details/C2020B00042 ; and

https://www.legislation.gov.au/Details/C2020B00043 .  

We look at JobKeeper and how you can use it to trade through COVID-19 and save the jobs of your employees, saving time and money later by not having to recruit and train new staff. This is not legal advice, rather this information is provided to assist you to understand how JobKeeper is intended to work.  

The Bills are yet to be voted and passed as legislation. However, the opposition have assured the government of their support for the Bill as it stands, despite their concerns about approximately 1.1 million workers being excluded from the programme. The legislation is intended to be retrospective to 30 March and has a restricted lifespan. The intended end date is 28 September 2020 but can be extended if parliament determines that it is necessary to do so.

The JobKeeper Payment has been introduced to assist businesses impacted by the coronavirus, to allow them to continue paying their employees. Eligible employers can claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020. The programme will be managed by the Australian Tax Office (ATO) and payments will be made in accordance with account information held by the ATO.

The payment works on the premise that businesses that can remain open will do so and will pay the $1,500 per fortnight to their employees, even if the employee would normally earn less than $1,500. Payments will be made to the employer monthly in arrears by the ATO. If a business is paid more than they are entitled to receive, they will be required to repay the overpayment amounts. Records substantiating the information relied on to make the claim must be kept and recorded in English or be easily translatable to English.

What can Employers do under JobKeeper?

The Government has included temporary amendments to the Fair Work Act to implement flexibility measures to save jobs. Employers can already stand down employees, but the amendments now allow employers to issue JobKeeper enabling directions, including:

• directions to:
• work reduced hours or days;
• undertake alternate duties; or
• work at an alternate location;
• request employees to take some of their accruedannual leave; and
• agree with employee requests for annual leave tobe taken at half pay.

Rights of review

Employers, employees and their representatives may raise disputes with the Fair Work Commission (FWC) about JobKeeper requests and directions between them. The FWC may deal with disputes in whatever way it sees fit, including by arbitration (meaning that it can make decisions that are binding on the parties). Ultimately, the FWC must consider fairness between the parties concerned when dealing with a dispute.

Protections

An employer will contravene a civil penalty provision if it purports to give a JobKeeper enabling direction if the direction is not properly authorised under the legislation and the employer knew that was the case when they gave the direction. The maximum penalties for contravention of this provision are up to $63000 per contravention for companies and up to $12600 per contravention for an individual.

Eligible employers

To be eligible, an employer will need to demonstrate that:  

1. their turnover will be reduced (or already has been) by more than:
   
   
2. 30% for businesses with annual aggregated turnover less than $1 billion;
3. 50% for businesses with annual aggregated turnover greater than $1 billion; or
4. 15% for not-for-profits and charitable organisations registered with the Australian Charities and Not-for-profits Commission (ACNC), other than certain educational charities;
5. they had an employment relationship with eligible employees as at 1 March 2020;
6. confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.

The payment will also be paid for staff you have had to stand down because of COVID-19 and examples are set out below.

Turnover for the purposes of a business’ eligibility is the entity’s projected GST turnover for a test period, and this is compared to the entity’s GST turnover for a relevant comparison period.  

Eligible employees

Eligible employees are employees who:

• are currently employed by the eligible employer(including those stood down or re-hired);
• were employed by the employer as at 1 March 2020
• are full-time, part-time, or long-term casuals(a casual employed on a regular basis for longer than 12 months as at 1 March2020)
• are at least 16 years of age
• are an Australian citizen, the holder of apermanent visa, a Protected Special Category Visa Holder, a non-protectedSpecial Category Visa Holder who has been residing continually in Australia for10 years or more, or a Special Category (Subclass 444) Visa Holder
• are not in receipt of a JobKeeper Payment fromanother employer.

Employers are required to consult with their employees about directions and decisions related to the employee before information is provided to the ATO. Written records must be kept of directions given to employees relating to the JobKeeper provisions. If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Centrelink as they must report their JobKeeper Payment as income.

Payment process

Employers will be paid $1,500 per fortnight for each eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment. If employees continue to work, and would earn more than $1500 each fortnight, the employer must top up the payment to ensure the employee is correctly paid.

Where employers participate in the scheme, their employees will receive this payment as follows:

1. If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
2. If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
3. If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, beforetax.
4. If an employee was employed on 1 March 2020,subsequently ceased employment with their employer, and then has beenre-engaged by the same eligible employer, the employee will receive, at aminimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Timing

The subsidy payments will be backdated to commence from 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the JobKeeper Payment from 30 March 2020 on the ATO website. The challenge will be for employers to maintain cashflow to carry them through to the first payment date.

How to apply

Employers have been able to register their interest in applying for the JobKeeper Payment via the ATO from 30 March 2020. The link is attached here: https://www.ato.gov.au/general/gen/JobKeeper-payment/  

Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO to continue to qualify for the payments.

Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.

If you require advice about how JobKeeper applies specifically to your business and staff, you can call our team on (07) 3160 0010 or email at reception@nfplawyers.com.au. To assist you, we have provided example scenarios below.

EXAMPLE SCENARIOS

Employer with employees on different wages

Adam owns a real estate business with two employees. The business is still operating at this stage, but Adam expects that turnover will decline by more than 30 per cent in in the coming months. The employees are:

• Anne, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and

• Nick, who is a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues working for the business.

Adam is eligible to receive the JobKeeper Payment for eachemployee, which would have the following benefits for the business and itsemployees:

• The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary and will continue paying the superannuation guarantee on Anne’s income;

• The business continues to pay Nick his $1,000 per fortnight before tax salary and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight before tax from the JobKeeper Payment which will subsidise the cost of Nick’s salary. The business must continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Nick is earning. The business has the option of choosing to pay superannuation on the additional $500 (before tax) paid to Nick under the JobKeeper Payment.

Adam can register his initial interest in the scheme from 30March 2020, followed subsequently by an application to ATO with details abouthis eligible employees. In addition, Adam is required to advise his employeesthat he has nominated them as eligible employees to receive the payment. Adamwill provide information to the ATO on a monthly basis and receive the paymentmonthly in arrears.

Employer with employees who have been stood down without pay

Zahrah runs a beauty salon in Melbourne. Ordinarily, sheemploys three permanent part-time beauticians, but the government directivethat beauty salons can no longer operate has required her to shut the business.As such she has been forced to stand down her three beauticians without pay.

Zahrah’s turnover will decline by more than 30 per cent, soshe is eligible to apply for the JobKeeper Payment for each employee, and passon $1,500 per fortnight before tax to each of her three beauticians for up tosix months. Zahrah will maintain the connection to her employees and be able toquickly resume her operations.

Zahrah is required to advise her employees that she hasnominated them as eligible employees to receive the payment. It is up to Zahrahwhether she wants to pay superannuation on the additional income paid becauseof the JobKeeper Payment.

If Zahrah’s employees have already started receiving incomesupport payments like the JobSeeker Payment when they receive the JobKeeperPayment, they will need to advise Services Australia of their new income.

Worker with multiple jobs

Michelle currently works two permanent part-time jobs, at anart gallery during weekdays, and at the local café on the weekend. Due to theimpact of the Coronavirus, the gallery has closed, and Michelle has been stooddown without pay under the Fair Work Act. Michelle continues to work at thecafé delivering take-away orders.

Michelle can only receive the JobKeeper Payment once, fromthe employer from whom she nominates as her primary employer. As Michelle onlyclaims the tax-free threshold from her job at the art gallery, this will betreated as her nomination of the art gallery as her primary employer.

The art gallery is eligible for the JobKeeper Payment. Theart gallery will pass the JobKeeper Payment on to Michelle, so she will receive$1,500 per fortnight before tax. During the application process, the artgallery will notify the ATO that Michelle receives the payment from them. Theart gallery is also required to advise Michelle that she has been nominated tothe ATO as an eligible employee to receive the payment.

The café is not eligible to receive the JobKeeper Paymentfor Michelle. The income that Michelle receives from her job at the café doesnot change her entitlement to the JobKeeper Payment she receives from the artgallery.

Employee made redundant after 1 March

Miles worked as a permanent part-time personal trainer at agym for six months and was made redundant on 20 March 2020 in response to theGovernment directive that gyms close. Miles was not entitled to redundancy paydue to his length of service.

In response to the announcement of the JobKeeper Payment,the gym decides they want to re-engage Miles, so they are well placed to resumetheir operations once the Coronavirus restrictions are lifted.

After being made redundant, Miles had registered an intentto claim with Services Australia for access to the JobSeeker Payment and theCoronavirus Supplement. Miles is single, with no children and in total he wouldbe eligible to receive $1,124.50 before tax per fortnight.

If Miles chooses to be re-hired by the gym, under the JobKeeperPayment he will receive $1,500 a fortnight before tax while he is stood down.Miles will need to advise Services Australia of his income. He is no longereligible for the JobSeeker Payment and the Coronavirus Supplement from ServicesAustralia as a result of receiving the JobKeeper Payment.

Employer with 5 employees who all currently get paid more than $1,500 per fortnight

Sara runs a landscaping company and employs five full-timegardeners. Sara is paying her employees $1,700 per fortnight before tax. Sheexpects that her turnover will decline by more than 30 per cent over the comingmonths and that she will either need to lay staff off or reduce their wagessignificantly.

As a result of the JobKeeper Payment, Sara will be able tokeep employing every gardener, and only needs to pay the $200 wage cost perfortnight before tax per employee above the $1,500 per fortnight (before tax) JobKeeperPayment.

Employee who has been stood down and applied for income support

Phoebe works in administration services of a large retailcompany as a permanent full-time employee, but she has been stood down underthe Fair Work Act without pay. Phoebe had registered an intent to claim withServices Australia for access to the JobSeeker Payment and the CoronavirusSupplement. Phoebe is single, with no children and in total she would beeligible to receive $1,124.50 before tax per fortnight from Services Australia.

Phoebe’s employer has decided to apply for the JobKeeperPayment for all its eligible employees for up to six months. This would entitlePhoebe to $1,500 per fortnight before tax. Phoebe’s employer is required toadvise her that she has been nominated as an eligible employee to receive thepayment.

If Phoebe elects to receive income support though Services Australia, she will need to report her income from the JobKeeper Payment to Services Australia. Phoebe may no longer be eligible for income support from Services Australia as a result of receiving the JobKeeper Payment.

Employment Update - What is Stand Down?

WithCOVID-19 control measures being escalated, the effect on many workplacescreates a lot of questions around how senior managers will manage the downturnand how they will handle their staff. The situation is changing everyday and itis important to understand what the effect of government decisions have on theoperation of your organisation.

It isapparent from media coverage that there are employers who are taking steps toreduce their wage expenses without understanding the repercussions of theirdecisions. It is critical that employers get advice that is specific to theircircumstances before taking steps to stand down employees.

Fair Work Act

The FairWork Act 2009 (Cth) (the Act) sets out the minimum standards for employmentfor employers functioning in the federal jurisdiction and for the purpose ofthis article, we will focus on that jurisdiction.

Section 524(1)(c) of the Fair Work Act, provides that an employer may stand an employeedown during a period that an employee cannot be usefully employed, because of astoppage of work for any cause that the employer cannot reasonably be heldresponsible.

Section524(3) provides that if an employer stands down an employee during a perioddescribed in s524(1), the employer is not required to make payments to theemployee for that period.

Whilst youmay think that a downturn in income streams, because of COVID, is somethingthat is beyond your control and you can stand your employees down, it isunlikely to be the case. The view of the Fair Work Ombudsman (FWO) is that employerscannot generally stand down employees simply because of a reduction of organizationalincome or because an employee has coronavirus.

If anemployer unlawfully stands down employees without pay, the employees may beable to recover unpaid wages for the period of the stand down.

Whether youhave the option of standing down employees in the current coronavirus related circumstancesis entirely reliant on the facts of your situation and you should exercise theoption cautiously. You must be able to demonstrate that:

• thereis a stoppage of work;
• theemployees to be stood down cannot be usefully employed (which is not limited tothe work an employee usually performs); and
• youcannot reasonably be held responsible for the cause of the stoppage.

The FWOencourages employers and employees to work together to find appropriatesolutions that suit the needs of individual workplaces and staff. Employees whoare stood down without pay remain employed for the period of the stand down andcontinue to accrue their entitlements during a stand down period because theiremployment remans operative.

When can you stand down employees?

The FWO hasprovided some examples of when they consider employers may be able to standdown employees, which include:

• ifthere was an enforceable government direction requiring the organisation toclose (which means there is no work at all for the employees to do, even fromanother location)
• ifa large proportion of the workforce was required to self-quarantine with the resultthat the remaining employees/workforce cannot usefully be employed
• ifthere was a stoppage of work due to lack of supply for which the employer couldnot be held responsible.

You mustremember that enterprise agreements and employment contracts can have differentor extra rules about when you can stand an employee down without pay, forexample, a requirement to notify or consult. You should review the relevantawards, agreements, contracts and workplace policies to ensure that what youpropose to do can be legitimately done.

If you canstand down employees, you are not required to make payments to them for thestand down period. However, it is at your discretion to do so if you would liketo.

Stand downis not effective if employees are taking paid or unpaid leave that isauthorised by the employer, or the employee is otherwise authorised to beabsent. You will be required to pay them under the normal leave provisions forthat period.

Stand downprovisions do not apply to casual employees because they have no guarantee ofhours and so no guarantee of income.

Alternatives to stand down

If youcannot legitimately stand your employees down or would prefer not to for aslong as possible, you may consider:

• seekingemployees’ agreement to take paid (annual or long service) leave for a period;
• invery limited circumstances, directing employees to take paid annual leave;
• subjectto consultation and notice provisions, negotiating with employees to changeregular rosters or hours of work; or
• terminatingthe employment of the employees, in which case the you may have to provideredundancy pay.

Recently,we have seen emergency changes to some modern awards that vary the restrictionsaround rosters, flexibility and directions to take annual leave, so currentadvice before you make a decision is important.

If youstand down your employees, they can take up other employment for the durationof the stand down but that may be subject to contractual obligations or prioragreement with you.

Termination of employment

The FairWork Act includes requirements that employers have to meet before they canterminate an employee’s employment, such as providing notice of termination orpayment in lieu. Unless the employee is legitimately dismissed because they havefailed to meet the reasonable requirements resulting from a performancemanagement process, you may also have to pay redundancy. Before you considerterminating someone’s employment in the current circumstances, you should getprofessional legal advice.

You mustalways remember that an employee is protected from being dismissed because ofdiscrimination, a reason that is harsh, unjust or unreasonable or anotherprotected right. Breaching those requirements can lead to expensive claimsagainst your organisation. Additionally, employers are prohibited from exertingundue influence or pressure on employees in relation to making certainagreements or arrangements relating to their employment.

Examplesof proposed stand downs

The FWO hasrecently released some example of situations relating to stand down to assistemployers to understand the provision. They are set out below.

Example:Lack of vital supply – Stand down

Sally'scompany operates a business that imports and sells electrical goods which are manufacturedin China. The factory in China ceases to operate as a result of coronavirus andannounces that it will not be exporting any goods for a period of at least 3months.

Sallyexplores other options but is unable to identify any alternative work of anyvalue for her 20 permanent employees to do.

Sallycloses her shop and regrettably informs her employees that they are to be stooddown without pay. Sally explains that they are entitled to take any accruedpaid leave during the period as an alternative to being stood down without pay.

Example:Non-essential services – stand down of employees

Gemma is apart-time employee at a cinema complex in Brisbane’s CBD. The cinema employs 10permanent employees and 15 casual employees. The Prime Minister has issued anenforceable government direction under emergency powers that certainnon-essential services must shut down because of coronavirus.

Gemma’smanager calls her to explain that the cinema is closed for the duration of theGovernment’s direction and that cinema management will need to stand allemployees down without pay, as they can’t be usefully employed.

Gemma andher colleagues are advised that permanent employees can take any accrued annualleave they have as an alternative to being stood down without pay. However,casual employees are not entitled to be paid while the business is closed.

Example:Non-essential services – no stand down of employees

Teddy is apart-time food and beverage attendant in a Sydney restaurant. The New SouthWales Government issued an enforceable government direction under the PublicHealth Act 2010 (NSW) that certain non-essential services must shut downbecause of coronavirus.

Teddy’semployer contacts him to let him know that the restaurant has closed its diningservice immediately for the duration of the direction. The restaurant willcontinue offering its takeaway and delivery service. Teddy’s employer lets himknow that instead of carrying out his usual waiting duties at the restaurant,he and the other waiting staff will be needed to help with receiving, packingand delivering orders.

This is nota stand down because Teddy can still be usefully employed, so he’ll continue tobe paid. 

Conclusion

As you cansee, stand down of employees is a very limited provision that turns entirely onthe facts of your situation. Even a small change in how you organise yourbusiness can change the effect of the provision.

If you think that you may need to stand down your employees or that you need to take other related steps in the current circumstances, seek advice before you make a decision. Our team can provide advice and draft documents to help ensure that you remain compliant with your obligations.

You can contact us on (07) 3160 0010 or at michelle.cowan@nfplawyers.com.au

Legal Alert - Planning for a pandemic - managing the risks and impacts on your NFP organisation

Following up from our recent newsletter (Legal Alert - Coronavirus and your employment arrangements) about managing the risks of coronavirus in your NFP organisation, we look at why you should be planning for the possibility of emergency restrictions, should the virus spread in Australia.

On 27 February 2020, the Prime Minister upgraded Australia’s response to the coronavirus, declaring that the situation will now be treated as a “pandemic”, even though the rest of the world is yet to declare it as such. At the time of making the declaration, there are confirmed cases of the virus in 47 countries around the world, with over 82,000 victims and almost 2900 deaths.

By makingthe declaration, the federal government can take emergency steps, if required,to respond as the disease spreads. Emergency steps could include temporarilyclosing schools, workplaces and public facilities, as has already been done inWuhan and parts of Italy.

It is currently envisaged, based on previous pandemics, that a coronavirus pandemic could have a serious impact on businesses, and the Australian economy in general, if a worst-case scenario were to eventuate. Media sources have reported:

“Thesocial distancing measures that may be required will have wide-ranging effects,with closure of schools and childcare services, and cancellation of publicevents. It is estimated that up to 40% of the workforce may withdraw from workat any one time due to illness, the need to care for family members or the fearof contracting the virus in the workplace or on public transport.”

The possible financial repercussions are that the Australian GDP could drop by as much as 10% if a pandemic hits Australia. Australian businesses have already been affected, due to the travel restrictions and community uncertainty about the effects of the virus.

How can you manage your workplace ina pandemic?

For as much as we hope that a pandemic does not hit Australia, by ignoring the threat your NFP organisation is at risk of serious harm. The better approach is to plan for the worst and hope for the best. With regards to your workplace, this means developing a management and recovery plan. We recommend that you:

• Consider what you can and would need to do if anyone in your workplace were diagnosed with COVID-19;
• Review how much work could      be completed offsite if you had to close your worksite;
• Review and test how the NFP organisation would operate if it had to be run remotely;
• Review what your team would need to do to prepare for remote work if they were required to do so;
• What are the costs of employees working from home? How will they be tracked and covered;
• Ensure your workplace policies are up to date and your team are acquainted with them;
• Plan how you would manage team members who could not do their jobs from another work location or from home; and
• Check your NFP organisation’s insurance coverage so you understand what you are covered for and how you need to manage the process from the insurer’s perspective.

Employees taking leave because of COVID-19

Personal Carer’s leave

Under the National Employment Standards (NES), set out in the Fair Work Act 2009 (FWA), all permanent employees are entitled to a minimum of 10 days for personal and carer’s leave each year.  An employee may take paid personal/carer’s leave if the leave is taken:

1. because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee; or
2. to provide care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of:
3. a personal illness, or personal injury, affecting the member; or
4. an unexpected emergency affecting the member.

Whether the issue is that an employee is sick themselves, a member of their household or family is sick, or they have school aged children who are excluded from school because of an emergency measure, the employee will be entitled to use their personal/carer’s leave.

If anemployee takes personal/carer’s leave, the Employer must pay them at their baserate of pay for their ordinary hours of work during the relevant period. If anemployee is on personal /carer’s leave and a public holiday falls during thatperiod, they must be paid for the public holiday rather than have that timedrawn from their personal carer’s leave.

If youremployees are covered by a modern award or enterprise agreement, there may bemore beneficial provisions that they are entitled to and you must comply withthose provisions.

Unpaid Carer’s leave

Under theNES, an employee may also take unpaid carer’s leave if the leave is taken toprovide care or support to a family or household member and they do not haveany paid personal/carer’s leave available. An employee may take unpaid carer’sleave for a single continuous period of up to 2 days or any separate periods towhich the employee and his or her employer agree.

Compassionate leave

If theworst happens and an employee has a family or household member who contracts ordevelops a personal illness that poses a serious threat to their life, or theydie, the employee will be entitled to 2 days of compassionate leave for each ofthose occasions. An employee may take compassionate leave for each occasion ifthe leave is taken:

• to spend time with the member of the employee’s immediate family or household who has contracted or developed the illness, or sustained a personal injury; or
• after the death of the member of the employee’s immediate family or household

Anemployee may take compassionate leave as a single continuous 2-day period; 2separate periods of 1 day each; or any separate periods to which the employeeand his or her employer agree.

If thecompassionate leave relates to the contraction or development of alife-threatening personal illness, or the sustaining of a personal injury, theemployee may take the compassionate leave for that occasion at any time whilethe illness or injury persists.

Notice requirements for leave

Anemployee must give their employer notice of the taking any of the above formsof leave as soon as possible (which may be a time after the leave has started)and they must advise the employer of the period, or expected period, of theleave.

Anemployee who has given their employer notice of the need to take leave must, ifrequired by the employer, give the employer evidence that would satisfy areasonable person that the leave is taken for the reason and in the wayspecified in the FWA. An employee is not entitled to take leave unless theycomply with the notice requirements.

Notice is an area that often requires further information from employers about form and timing to ensure that all parties are clear about the terms of the provisions. We recommend that employer’s have thorough leave policies in place, so employees understand what is required of them, when they wish to access one of the forms of leave available under the NES, or if the employer affords them further entitlements.

NFP Organisation shutdown ordered

Section524 of the FWA allows employers to stand employees down without pay if theemployee cannot be usefully employed because of one of the followingcircumstances:

1. industrial action (other than industrial action organised or engaged in by the employer);
2. a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
3. a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

The thirdreason is the one that would apply in the instance of a site or organisationshutdown brought about by a government direction, in response to a pandemic.

If thereare further terms in a modern award or enterprise agreement that affect standdown provisions, those terms will override or add to the FWA provisions.

If anemployer stands down an employee based on section 524, the employer is notrequired to make payments to the employee for the duration of the stand down.

Alternative leave arrangements

To buildgoodwill with your employees, it may be good practice to offer them theopportunity to draw on their accrued annual leave, or if they can access longservice leave, to draw on that provision, rather than be without pay for theduration of a stand down.

If anemployee enquires about accessing long service leave, it is critical toremember that they must have completed the required periods of service beforethey can draw on their accrued leave. In Queensland, employees can access theiraccrued long service leave in accordance with terms set out in the below table:

 Period  of continuous Service     Long  service leave entitlement     10  years     8.6667  weeks     After a  further 5 years     A  further 4.3333 weeks (total of 13 weeks)     More  than 15 years     Long  service leave can be accessed as it accrues  

An employer can exercise the discretion to offeremployees the alternative of taking annual leave in advance of its accrual. Ifyou do decide toapply that option, it is important to document the agreement to ensure that youcan claw back any overpayments if an employee resigns before they have accruedthe leave they have already used. Most modern awards have a template documentfor the purpose. We also recommend that your organisation’s leave policy coversthe process applied for taking annual leave in advance and when it will bepermitted.

If youuse time off in lieu (TOIL) of overtime payment, you may invite your employeesto use any accrued TOIL during a stand down rather than remain unpaid for thestand down period.

Working from home

Directing your employees to work from home can be a good alternative to closing an organisation down during a period of enforced closure, if your NFP organisation lends itself to that arrangement. Even if all of your employees can’t do productive work during a closed own period, you may need to keep some administrative, reception or office based staff in operation to keep the NFP organisation running as much as possible, to retain some cash flow or manage ongoing projects.

If youdirect your employees to work from home, you will be responsible for ensuringthat they are properly equipped to do their work and comply with yourobligations.

Workingfrom home will not be effective if the employee is staying home to care forchildren at the same time. To ensure that your staff understand what isrequired when they work from home, we recommend that you have a “Working fromHome” policy and agreement. Your policy should set out the requirements foremployees working from home, such as:

• Communication with the workplace, other employees and management;
• Level of supervision required;
• Accessibility for clients;
• Recording time and workflow;
• Privacy considerations;
• Compliance with workplace health and safety requirements;
• Resources and equipment required; and
• Responsibility for costs incurred.

If youdirect employees to work from home, you will be responsible for covering theassociated costs like the relevant component costs of:

• Internet;
• Telephone line rental/ mobile plan; and
• Electricity.

Beforeyou proceed with a “Working from Home” Agreement, we recommend that you directthe employee to conduct an audit of the home and workspace to ensure that theyhave:

• An ergonomically sound     workstation that meets work requirements and minimise risk of injury;
• There is sufficient light     for work to be performed safely;
• There is sufficient     ventilation;
• Noise levels are at     acceptable levels so as not to distract the employee during work;
• They have access to any     further equipment required to complete work tasks in an efficient manner;
• They have safety equipment     like fire extinguishers and first aid kits, and they know how to use them;
• They have the appropriate     telephone and data lines to access and complete work;
• They have a secure     environment if they are working with information subject to privacy     requirements; and
• They are appropriately     insured to work from home.

It will be easier to respond to a close down with working from home arrangements if you discuss the idea with your staff ahead of time, train them in the policy standards and assess their capacity, before you need to apply the provisions.

Sending sick employees home

When an employee shows up to work sick, not only are they more likely to spread their illness, but they also cost your NFP organisation money in lost productivity. Sickness can spread quickly within the workplace. With many illnesses, people are contagious before they show symptoms, hence recent directions for people exposed to COVID-19 to self-isolate for the 2‑week incubation period.

Employershave a duty of care under the Work Health and Safety Act 2011 (Qld)(“WHS Act”) to ensure, so far as reasonably practicable, the health and safetyof workers. Similar provisions can be found in corresponding work health andsafety legislation around Australia. Equally, under the WHS Act, workers have aduty to take reasonable care for their own health and safety and takereasonable care that their acts and omissions do not adversely affect thehealth and safety of other persons. They must also comply with reasonableinstructions and cooperate with policies and procedures given by theiremployer.

If anemployer reasonably suspects that an employee is posing a health risk to otheremployees, for example, if the employee has signs of a contagious disease, theemployer may consider it necessary to ask the employee to obtain a medicalcertificate indicating that the employee is fit to attend for work.

Adirection of this type can be a source of confusion and dispute, so it isrecommended that the ability to direct employees to take leave when they arenot fit for work is set out in a workplace policy. It may also be relevant thatit is included in the employee’s employment agreement.

Beforeyou get to the situation where you have to direct employees to take personalleave, we recommend that you review your workplace policy on leave provisionsto ensure that it explains why and when you might direct someone to takepersonal leave and what they need to do to ensure they can return to theworkplace safely.

WHS and contractors

If you deal with contractors at your workplace, you should be mindful that their contract should apply the policies and procedures of the workplace to their work. It is also important that they understand their workplace health and safety obligations and that if they attend the workplace whilst sick, you may need to direct them to leave the workplace and return only when they have been cleared as fit for work by a medical practitioner. In the current environment, hospitals and private practitioners are alert to the risks of spreading the COVID-19 virus and will not clear someone to work if they have been exposed to the virus.

Keep up to date

If youare concerned about managing the risks of infection in your workplace, bemindful that the virus has spread, and the Australian government continues toupdate its travel advice to capture high risk locations and changes in thespread of the virus. If someone in your workplace is travelling and due toreturn, check the Smartraveller website for current information on the COVID-19virus.

https://www.smartraveller.gov.au/news-and-updates/coronavirus-covid-19

What if an employee is caught in another country while they are traveling?

There isa possibility that employees may be caught in quarantine situations if they arecurrently travelling overseas. The Fair Work Regulations (reg 3.01) and the FWAprovide protection to employees who cannot attend work for an extended periodof time due to illness or injury.

Under section 352 of the FWA, an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations. A prescribed kind of illness or injury exists if the employee provides a medical certificate for the illness or injury, or a statutory declaration about the illness or injury, within 24 hours after the commencement of the absence or such longer period as is reasonable in the circumstances.

Under the general protections regime of the FWA, employee’s are protected if they are absent from the workplace for up to 3 months in a 12 month period, due to illness or injury and where they do not have paid personal/carer’s leave to cover their absence, whether based on a single or separate illnesses or injuries. On that basis, if you were to take steps to terminate their employment because they were not fit to attend work, because of an illness or injury they had advised you of, you would be at risk of a general protections claim. Before you do take steps to bring an employee’s employment to an end, because of an extended period of absence, we recommend that you seek legal advice about the risks attached to your proposed actions.

Conclusion

Managing the effects of COVID-19 and any other serious contagious illness is best done with good planning and preparation. That must be done ahead of time and should ideally be tested to ensure it is effective at the critical period. Given the view of the World Health Organisation is that it is a case of when the virus hits rather than if it hits, planning now could save you time, stress and money.

If you don’t have workplace policies in place or you need assistance in preparing crisis management plans that comply with relevant legislation, we can assist you.

Legal Alert - Fair Work Ombudsman prosecuting for non-compliance

Over the last couple of years, Australian media channels have regularly reported on underpayment issues in corporations and the hospitality industry, shining a light on big names like George Calombaris, Neil Perry, Woolworths and Wesfarmers.  In the 2018/19 financial year, the Fair Work Ombudsman (FWO) recovered over $40 million for nearly 18,000 workers, conducted over 2800 workplace audits nationally and the courts also imposed penalties of $4.4 million arising from FWO litigation action. ​​

The mostrecent case reported by the FWO is regarding legal action commenced in theFederal Circuit Court against the operator of a Thai restaurant in Newcastle.It is alleged that the business owner breached the Fair Work Act by failing toconform with a Compliance Notice requiring him to correctly calculate andback-pay alleged underpayments of his employees, some of whom were visa holders.The Compliance Notice was issued after a Fair Work Inspector investigated thebusiness records and concluded that the business owner allegedly underpaidminimum wage rates for ordinary hours, casual loading, overtime, weekend andpublic holiday penalty rates under the award. The FWO is seeking a maximumpenalty of $6,300 which is a significant amount for a small business.

In the FWO2018-2019 annual report, the FWO stated:

“It’s a fact that mistakes happen, and this can lead to underpayments. However, the onus is on the employer to comply with workplace laws, and immediately rectify any issues that arise.

Under our new Compliance and Enforcement Policy, I announced that we would increase our use of compliance notices. Fair Work Inspectors issue compliance notices if they reasonably believe an employer has breached workplace laws. If the breach isn’t fixed, we won’t resile from taking the matter to court.”

As a resultof the Compliance and Enforcement Policy adopted by the FWO, there has been agrowth in the number of employers self-reporting underpayments. Wherecompanies self-disclose, the FWO will consider all appropriate enforcementoptions, and litigation may still be considered as the most appropriate action forserious non-compliance or late or incomplete disclosure.

The FWO havestated that they:

“expect non-compliant employers, as a minimum, to enter into a court enforceable undertaking (EU) and immediately pay back money plus interest owed to workers. We also expect them to pay for ongoing independent audits of their payroll, with FWO oversight, to ensure underpayments don’t happen again. Companies that do not comply with the EU and companies that do not work cooperatively with us can expect litigation. Consistent with open and transparent governance, FWO will publish all EUs on our website.”

As an example,George Calombaris’ hospitality group initially reported underpayments of lessthat $2m. However, the FWO audited the group and identified $7,849,324 inunderpayments to over 500 employees. Adding the additional $200,000 contritionpayment, the group had to pay $8,049,324 under an EU. By making those payments,they avoided prosecution and possible significant penalties for breaches of theFair Work Act.

Fair Work Ombudsman

In a speechto the Australian Industry Group, Policy Influence Reform Conference in mid-2019,the FWO announced that the 2019/20, priority industries or issues they wouldfocus on were:

• Fastfood, restaurants and cafes;
• Horticultureand the Harvest Trail;
• Supplychain risks;
• Franchisors;and
• Shamcontracting;

and that vulnerableworkers would continue to be a priority, as would matters that:

• areof significant public interest;
• demonstratea blatant disregard for the law;
• areof significant scale or impact on workers or the community; and
• cantest the law or use new laws.

That framework has informed the FWO’s activities, resulting in a seriesof random regional audits and re-audits to enforce their initial audit findings.

For the NFP sector, the burning issues is contracting of employees onarrangements that don’t meet the minimum standards and the incorrectapplication of modern award terms. It is important to remember that an employeecannot agree to accept less than the minimum legal entitlements. Regardless ofwhat your employees say, if you are audited and found to not comply with yourobligations, you can expect to be issued with an order to back pay employeesany amount identified in an audit. Some of the big cases that unfolded in 2019were initiated by FWO audits of self-assessments, pre-empting external audits.

The FWO reported in December 2019 of a home-care services organisationin Western Australia more that was found to owe employees more than $6 millionafter breaching Australia’s workplace laws. The registered not-for-profitentered into a Court-Enforceable Undertaking with the FWO after self-disclosingthat it underpaid 124 current and former employees. The internal audit foundthat the NFP underpaid employees their overtime rates and Saturday and Sundaypenalty rates they were entitled to under the Social, Community, Home Care andDisability Services Industry Award for work performed between 2012 and 2018.

Carers were generally paid annual salaries of over $100,000 – butbecause they were effectively on-call 24 hours a day to care for children, manywere considered ‘continuous duty employees’ under the Award and were entitledto annual wages of well over $200,000. The NFP agreed to back-pay affectedemployees a total of $6.36 million in wages, superannuation and interest. Paymentsto individuals ranged from less than $1000 to more than $500,000.

Risks in the workplace

What doesthis mean for your organisation? The FWO has actively pursued prosecutionsagainst employers who have failed or refused to conform with Compliance Noticesissued by industrial inspectors. In recent times, they have succeeded in havingpenalties applied to both the companies and the directors personally, inaddition to the amounts assessed as owing to employees.

To minimisethe risk of facing penalties, back payments and the cost of legalrepresentation in a dispute, you need to understand what, if any, modern awardsapply to your organisation and how they apply.Modern awards set the minimum standards in an industry or occupation and it issurprising how many people don’t realise that they exist or that they apply totheir organisation. If you don’t understand your obligations, professionaladvice is vital to protect your organisation’s interests.

The organisationsthat have been issued Compliance Notices often didn’t set out to do the wrongthing. Unfortunately, they may not have sought professional advice on how toset up their organisational structures or may have undertaken their ownresearch without understanding the complexities of employment law or that thelaw in other countries can be substantially different. Often, employers whothink they are doing the right thing find out later that are not complying withtheir legal obligations. It has been made clear that employers’ ignorance ofthe Australian employment standards cannot be relied on to defend claims.

Managing risks of underpayment

If you becomeaware that you have not correctly paid employees, you need to correct the errorand advise the relevant employees accordingly. Be mindful that employees have 6years from the date of an underpayment to pursue back payment. Additionally, employersare required to maintain their employment records for seven years and would becalled on where a claim is made. The Fair Work Act and Regulations are clearabout the information type and content that must be kept and failure to complywith your record keeping obligations can result in penalties against you.

A great serviceidea is not the only important consideration. If you need to employ staff, you mustunderstand and properly exercise your obligations to them. In any organisation,investing in reliable professional advice will save you much more than it costs.Speaking with someone who has expertise in employment law and who can help youset up your employment arrangements will save you time and money. If you aregoing to have someone else process payroll for you, make sure that theyunderstand any modern awards that apply to your organisation and that they knowhow to apply them. Also, make sure that you have a good accountant who can regularlyreview the profit and loss for the organisation and alert you to any impending concerns.

If you are concerned that your organisation may not be compliant with its employment obligations, our team can provide advice and draft documents to help ensure that you remain compliant with your obligations.

Legal Alert - Coronavirus and your employment arrangements

The current Novel Coronavirus outbreak is creating challenges on many fronts as governments around the world act to stem the spread of the disease. At the time of writing this, Australia has 14 confirmed cases of novel coronavirus with 165 confirmed exposures to be tested. Whilst those numbers are low, the experience in the centre of the outbreak has provided an indication of how fast the disease can spread. On January 20, there were six deaths out of 282 confirmed cases in Wuhan. By January 28, there were 106 deaths from about 4,500 confirmed cases. By February 6, approximately 24,557 confirmed cases of the virus, and 492 deaths have been reported internationally. With the spread of the disease comes a raft of issues that could affect the way your organisation operates.

Current Australian government advice

As at 6February 2020, the advice from the Department of Foreign Affairs and Trade(DFAT) for travel to mainland China is 'level 4 – do not travel’. This means that you should delay any business travel to China until the risk level is assessed by the government as having passed. The following travel restrictions to people entering Australia, having left mainland China after 1 February 2020,are:

• foreign nationals (excluding permanent residents of Australia) who are in mainland China, will not be allowed to enter Australia until 14 days after they have left or transited through mainland China
• Australian citizens, permanent residents and their immediate family will still be able to enter Australia, as well as airline crews who have been using appropriate personal protective equipment

In addition, the following isolation requirements apply:

• if you have travelled to Hubei Province within the past 14 days, you must isolate yourself until 14 days after you left Hubei Province
• if you have left or transited through mainland China on or after 1 February 2020you must isolate yourself until 14 days after leaving China
• if you have been in close contact with a confirmed case of novel coronavirus, you must isolate yourself for 14 days after last contact with the confirmed case

Importantly, these requirements apply to students attending childcare, school or higher education and will mean that parents or carers may have to take carer’s leave to look after children isolated from childcare or school.

Risks in the workplace

While State and Federal governments work to manage and minimise the outbreak, employers are faced with the dilemma of how to manage the risks and the effects on their operations.

We understand that it takes 14 days for the disease to incubate, so there remains a risk of exposure in that period. Further, if you have anyone working in your organisation who has travelled through China recently or who has been in contact with someone who has, there will be a risk of your staff and clients being exposed to the disease as was seen recently in a South Australian real estate agency. The media have reported that the agency temporarily closed, with staff sent to self-imposed quarantine after finding out South Australia’s two confirmed coronavirus victims attended one of their auctions in the last fortnight. The owners of the agency elected to close the office to minimise any risk to their staff, customers and the public until Thursday the 6th February, when they will reassess the situation.

Where can you get information updates?

For information about health and safety in the workplace, go to:

• The Department of Health  for the latest information and advice about coronavirus.
• Safe Work Australia for information and referrals about dealing with coronavirus in the workplace.
• Your State or Territory workplace health and safety body - for the latest information and advice about coronavirus.

Personal and carer’s leave entitlements in the private sector

Full and part-time employees who can’t attend work because they are sick can take paid personal/carer’s leave. If an employee needs to look after a family member or member of the employee’s household who is sick with coronavirus, they are entitled to take paid personal/carer’s leave.

Casual employees are entitled to 2 days of unpaid carer’s leave per occasion, which simply means that their employment is protected in that period. Full and part-time employees can take unpaid carer’s leave if they have no paid personal/carer’s leave left.

An employee must give their employer evidence of the illness or unexpected emergency if their employer asks for it. If you require documentation, you should either have that requirement recorded in an existing workplace policy or failing that, let them know when they contact you to advise they will be absent.

Employee is quarantined

The Fair Work Act does not set out rules for these kinds of situations, so employees and employers need to negotiate their own arrangements. Possible reasonable arrangements may include:

• taking sick leave if the employee is not fit for work because of a personal illness;
• taking annual leave; or
• taking any other leave available to them (such as long service leave or any other leave available under an award or contract of employment).

If an employee doesn’t have sufficient personal leave entitlements to cover their absence, they will need to arrange any other paid or unpaid leave by agreement with their employer. Whilst leave without pay (LWOP) is not an entitlement under the Fair Work Act (the Act), an approved period of LWOP will protect them from dismissal because of their absence. Under the Act an employee’s employment is protected where their absence from work is less than 3 months, in one block or across a 12-month period.

Employee wants to stay home as a precaution

If an employee wants to stay at home as a precaution against being exposed to coronavirus, they will need to make a request to work from home (if that is possible)or to take some form of paid or unpaid leave, such as annual leave or long service leave. These requests are subject to the normal leave application process in the workplace, but given the urgency of the situation, it is recommended that employers act swiftly to process leave requests.

It is recommended that employees who are concerned about their personal risk of contracting coronavirus should speak with their doctor urgently for a professional assessment of the risks to their health.

Employer wants their staff to stay home

Under work health and safety laws, employers are required to ensure the health and safety of their workers and others at the workplace by removing a risk entirely or minimising its effect as far as they practically can. Workers also have responsibilities under the same laws to remove or minimise health and safety risks.

If an employee is at real risk of infection from coronavirus, you should request the employee to:

• seek medical clearance from a doctor; and
• work from home (if possible); or
• not work during the risk period.

For example, if the employee has recently travelled through mainland China, or has been in close contact with someone who has the virus, it may be prudent for them to be isolated from the workplace until 14 days from their last point of contact with the virus.

Under the Act, an employee can only be stood down without pay if they can’t do useful work because of equipment break down, industrial action or a stoppage of work for which the employer can’t be held responsible. The most common scenarios are severe and inclement weather or natural disasters. Where employees can perform work from home or another worksite, they should be instructed to do so. However, because of the nature of this situation, you should seek advice if your situation changes to ensure you remain compliant with your employment obligations.

When an employer directs a full-time or part-time employee not to work, the employee is entitled to be paid for their ordinary hours while subject to the direction. You should consider your obligations under any award, your contracts of employment and workplace policies and plan accordingly before you give an instruction to an employee to stand down.

Employers need to balance their legal obligations, including those relating to anti-discrimination, and as such, should carefully consider the broader effects of the virus on their organisation and its clients.

If you are concerned that you organisation may be affected by the Novel Coronavirus and you are unsure about how to manage the situation, our team can provide advice and draft documents to ensure that you remain compliant with your obligations.