Standing down, cutting pay, reducing hours: What are an employer’s legal obligations during COVID-19?


We’re in so many twilight zones at once now. Every question feels existential, every choice heavy with risk.

For parents it’s awful. For workers, stressful beyond bearing. And for employers, while we always at least theoretically feel the weight of responsibility for our workers, now it’s breathtakingly real.

Not to diminish anyone else’s situation, but this piece is about the particular issues confronting employers. Their responsibility is being cut two ways, with no obvious point of reconciliation.

This can be looked at legally, which is to say what are an employer’s legal obligations to their employees? We’re being asked the same questions non-stop: can we stand down our staff without pay; can we make them use up their leave; force them onto part-time; cut their pay?

These are the economic imperatives at play, whether employers are trying to save their own incomes or just keep the business alive.

If this was something mundane like a GFC, then the law would provide relatively simple answers, bounded by industrial legislation, insolvent trading rules and tax laws. But there’s a whole other, much larger dimension here — the silent killer COVID-19.

Health and safety are, in the employment relationship, always of paramount concern (again, at least theoretically), but now they are the start and finish.

For many employers, their choices have been made for them, either by compulsion or inevitability. Gyms have been ordered closed, so that’s that for them. Theatres too, which forces the proprietors sooner or later to stop paying their employees. But what about all the service providers whose work enables a production to be staged?

They’re not prevented from working, it’s just that they’ve got no work to do. The company that makes theatre sets is, for now, done.

That leaves two other categories of employer for whose goods or services there is a demand to supply: those whose employees can work from home, removing the health and safety risk from the equation; and those who are allowed to keep trading, but only by means which place their employees at risk.

We know that this virus is, sometimes, highly transmissible. It infected 37 of 140 guests at a single wedding two weeks ago. Medical authorities worldwide agree that the key element to slowing the spread is physical distancing between people.

There’s enough there to be sure that if an employee is exposed to other people — colleagues or the public — then their risk of acquiring COVID-19 is high and growing higher.

The employer who can keep doing business from everyone’s loungerooms — pretty much all service industries — will at some point be facing up to the limitations of that arrangement.

These include technological and communication issues (including internet bandwidth); some things that can’t be done other than in person; and the compounding damage to motivation, productivity and teamwork that this open-ended isolation will cause.

It will be tempting to loosen the bounds, especially when the infection growth rate has peaked and is coming down, and bring people back into the office. There lies risk.

The employer who doesn’t have that choice at all — either their people face the risk or there is no business — has the same issue, just right now in the thick of the disaster and with no guide book for what the hell to do.

The law says that you must provide a safe workplace. It doesn’t say “unless there’s a pandemic going on and the community needs you to keep your doors open even if that exposes your employees to the clear and present risk of being infected themselves”.

The upshot of this is that employers who impose on their employees, under their contracts, the requirement to show up to a workplace where COVID-19 exposure is possible (which is basically everywhere at the moment) may be exposed to an unquantifiable liability risk.

I say “may” because I bet that at some point it will dawn on governments that they’re asking too much of employers, possibly because they themselves are the largest employer of all.

It struck me as a very Coalition obsession to include relief for company directors from insolvent trading risk in the second stimulus package (in reality it should be a 17th order priority), but they’ll get around to protecting their corporate donors from being sued for exposing their workers to COVID-19.

Once more, the pat legal answers to questions that would usually be standard but are now contextually insane are going to be subsumed by a larger reality.

By a mix of radical lawmaking and a volcano of cash, the government will, in the end, allow us to not care at all about the legal consequences of the bizarre choices we’re being forced to make today.

As an employer, that doesn’t reduce the stress, because I don’t think any of us are worried about getting sued or going to jail.

Strange times indeed when that’s a lawyer’s conclusion.

This article was first published by Crikey.

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