Covid-19 - Commonly asked questions

What if an employee needs to look after a family member who is sick with Coronavirus or who has been quarantined?

They can use their Personal (Carer’s) Leave to support or care for a member of their immediate family or household. If they don’t have enough paid Personal Leave - or if they are a Casual employee – they are entitled to 2 days’ Unpaid Carer’s Leave.

You may also explore the option for them to work remotely during this period (and obviously be paid as usual).

Some organisations are providing additional or special leave for employees, but this is up to you and depends on the needs, values of your business and your commercial reality.

What if an employee’s child’s school or child care is closed down?

If an employee needs to be at home to care for their children if their school or child care centre has closed (i.e. because someone at the school has tested positive), they can use their Personal (Carer’s) Leave to care for their children. Carer’s Leave is available to care for someone in an unexpected emergency. You may request reasonable evidence of the unexpected emergency, as per any request for Carer’s leave.

If they don’t have enough paid Personal Leave - or if they are a Casual employee – they are entitled to 2 days’ Unpaid Carer’s Leave.

You may also explore the option for them to work remotely during this period (and be paid as usual), but this will again depend on individual circumstances and business needs.

The employee may also request to use Annual or Long Service leave.

Additionally, you may wish to provide additional or special leave pending your organisational needs and values.

What if an employee is uncomfortable and refuses to come to work as they are concerned about their safety?

Talk to them and seek to understand their concerns. You should explore alternate working options in the first instance. This could include working from home or providing transportation options for them instead of public transport etc. The employee may request to take paid or unpaid Annual or Long Service leave.

If an employee refuses to attend work – and this is not consistent with government advice, you do not have to pay them or allow them to use their leave (unless of course you agree to do so).

Under normal circumstance, someone refusing to follow reasonable directions to attend work may be grounds for disciplinary action. However, we are experiencing a global health emergency, so any concerns by an employee may well be valid. We suggest you tread very carefully as there are protections for employees who raise genuine concerns about their safety in the workplace. A compassionate approach is recommended in this situation.

What about our Casual employees?

There is no requirement to pay your Casual employees if they don’t work. Although you should be aware that Casual employees may experience financial hardship in this situation. As such, some organisations are providing paid leave to their Casuals, but this is not a requirement. Casual employees who find themselves without work may be eligible for government benefit payments.

What if I need to temporarily close the business (or part of it) based on enforceable government directions?

If you have to temporarily close the business in response to government advice, you can direct your employees to ‘stand down’ during this period. Stand downs in this case are generally unpaid as the closure is out of your control. Stand downs, under the Fair Work Act, are where there is a stoppage of work for which the employer cannot be held responsible and where employees cannot be usefully employed.

Some examples of when a ‘stand down’ might apply are:

• If there was an enforceable direction requiring your business to close;
• If a large percentage of your workforce was required to self-isolate resulting in the remaining employees not being able to be usefully employed; and/ or
• If there was a stoppage of work due to lack of supply for which you cannot be held responsible.

The government response to the health emergency is unprecedented, and you may be experiencing stoppages of work that are out of your control. Many organisations are looking to stand employees down without pay as a result of the impact of Coronavirus, particularly in industries that require face to face customer contact or where roles cannot be performed from home. This is certainly a ‘grey’ area.

This is also not an ideal situation for anyone. You should, wherever possible, explore alternate options to mitigate any financial loss your employees may experience. For example, you may allow your employees to take paid Annual or Long Service Leave during any close down period. This also serves the purpose of reducing their leave entitlements which if in the unfortunate eventuality of a redundancy down the track, means your financial liability will be lower.

What are some cost saving options I can explore?

Many businesses are exploring options to ensure they can survive in the short term, so they can flourish again in the longer term. This also means what options can they explore to avoid needing to ‘let go’ of good people.

Each situation would need to be explored and considered carefully. You can explore options with your employees including:

• asking employees to take Annual and/ or Long Service Leave;
• reaching a mutual agreement to reduce an employees’ hours or days for set period. They may take unpaid leave on the other days;
• asking employees to agree to take unpaid leave;
• asking employees to agree to move to part time (instead of full time) hours for a set period; and
• voluntary pay cuts with employee permission for a set period of time. Note: Any permanent and on-going changes to hours or remuneration could constitute a redundancy scenario and you would need to follow an appropriate process and ensure the employee receive all their entitlements, including severance pay if relevant.

It would also be prudent for you to explore other broader opportunities to cut costs across the business, including perhaps senior salaries and bonuses, and other major expenditure. It’s important to lead by example in this time, and demonstrate that “you’re all in this together”.

What if I need to make roles redundant?

An unfortunate outcome may be that you need to make tough decisions and may no longer require or be able to afford to keep certain roles. In this instance, roles would become redundant. You would need to follow the correct process and employees may also be eligible for severance pay - if you were not classified as a small business (ie. <15 employees) and they had worked with you for more than 12 months.

For guidelines on Redundancies, please visit the Fair Work website here.

Disclaimer: These notes are intended to be a guide only. Karaco Accountants, its directors, employees and consultants expressly disclaim any and all liability to any person, whether a purchaser or not, for the consequences of anything done or omitted to be done by any such person relying on a part or the whole of the contents. Do not act on the information without first obtaining specific advice regarding your particular circumstances from a tax professional.