Lessons That Can Be Learned from The FWC’s Determination That Workers Need to Be Paid Their Ordinary Earnings During COVID-19 Shutdowns

A recent Fair Work Commission (Commission) decision has determined that workers need to be paid their ordinary earnings during COVID-19 related shutdowns, and cannot be forced to utilise their leave. Stevens & Associates Senior Solicitor Luke Maroney, who acted for the union that brought the claim, shares some lessons that can be learned from the Commission’s decision.

Background

An employer operated an aged care facility (Facility) in Sydney’s Inner West. A resident of the Facility was admitted to Concord Repatriation General Hospital (Hospital). After the resident returned to the Facility from the Hospital, it was discovered that she had been in contact with a doctor at the Hospital who was suspected of being exposed to COVID-19.

The Facility was requested by the local public health unit to ‘lock down’ and to isolate the resident. In addition, it was recommended that any of the Facility’s staff who had been in contact with the resident since her return be directed off work for 14 days. The Facility’s staff were not required to self-isolate. The Facility followed the recommendations and directed staff not to attend work.

In the following days, the resident returned multiple negative COVID-19 tests and was considered clear of the virus which causes the disease. As a result, staff who had been stood down were returned to work. Upon their return to work, the staff were asked to elect what type of leave they wanted to use to cover their absences.

The Decision

The Commission determined that the employer could not require the relevant staff to utilise their leave and, rather, the Facility was required to pay them their ordinary earnings for the period of the stand down.

Lessons for Employers

What is a stand down under the Fair Work Act 2009 (Cth) (Act)?

Under sections 524 and 525 of the Act, an employer can stand down an employee without pay where they cannot be usefully employed. The inability to be usefully employed must be because of:

• Industrial action;
• Broken machinery or equipment, when the employer is not held responsible for this breakdown; or
• A stoppage of work due to causes outside of the employer’s scope of responsibility.

The Commission determined that, while the relevant employees were not being put to work, there was no ‘stoppage’ within the meaning of the Act because the Facility continued to provide the same services, just using different employees. Employers can only make use of the stand down provisions related to stoppage of work where some part of their actual business stops, as opposed to the workers themselves no longer performing the work. In circumstances where the stand down provisions of the Act were not enlivened, there was no ability to refuse to pay the employees or require them to utilise their accrued leave.

Understand the guidance being provided by health authorities

A critical aspect of the Commission’s decision was the effect of a public health order as opposed to a recommendation offered by public health authorities. A public health order could provide circumstances where employees might not be ‘ready, willing or able’ to work and, as such, might not be entitled to pay.  However, where a recommendation was provided, the decision to have employees cease work over the period was the responsibility of the Facility. This demonstrates the significance of understanding the guidance provided by authorities and the potential risks of misinterpreting the way in which guidance applies to the workplace.

Understand your own policies

Employers must recognise the significance of understanding and actively implementing company policies correctly. In this case, the Facility had set out changes to its Leave Policy in response to COVID-19. Those changes provided that where an employee was required to take time off work as a ‘precautionary measure’, the ordinary rate of pay would be paid to the employee. The Facility’s failure to understand the effects of its own policy was a significant factor in both the pursuit of the claim, and its ultimate success. While policies typically do not bind employers contractually, having policies in place can set the expectations for employees. It is also not a ‘good look’ for an employer, when defending proceedings, to seek to put a position inconsistent with the expectations it has set for its employees.

Have open discussions with employees and their representatives

Having open discussions is crucial in any work environment and can help prevent disputes and complications. Such conversations could be of particular benefit when clarifying the expectations of employees and their representatives. In the present case, the Facility only advised staff about the requirement to utilise leave after they had returned from their absence. They did not proactively engage with the workers or their representatives at an earlier stage, which might have averted the dispute.

Get advice early

Even in urgently unfolding situations requiring a rapid response, it pays to get advice early. That will be able to inform your response to inquiries made by workers, assist in your strategy for communicating with them and being clear on what your responsibilities are under the Act, the contracts you have with your employees and any applicable industrial instruments. It might also avoid the need to participate in litigation.

If you have any questions about workplace conditions in the ever-changing COVID and post-COVID environments, or about standing down staff, please do not hesitate to contact Nick Stevens, Luke Maroney or Daphne Klianis.