Mitigating Employment Issues During Covid-19 Pandemic

COVID-19 is a global threat. The symptoms range from mild to severe — most people will only experience a fever and cough while high-risk patients can develop pneumonia. To flatten the curve of the virus, experts are telling people to stay inside and isolate themselves as much as they can.

While self-isolation is the smartest action to take, it also affects the economy and causes employment issues in major countries such as Australia. The COVID-19 crisis could cost over one million Australians to lose their jobs.

Many Australian workers don’t know their legal rights during this time. If this sounds like you, continue reading to know the current coronavirus employment issues.

The Current State of COVID-19 in Australia and the World

Worldwide, there are over one million confirmed cases of the coronavirus. But when you take the number of untested cases into account, it may be possible that the number could be much greater!

As of 3^rd April, there are 5,300 cases in Australia and 27 deaths. New South Wales has 83 new cases, most of which are in Sydney.

Australia has taken strict social distancing protocols early and social distancing standards continue to tighten as coronavirus cases grow throughout the world. While these protocols will help flatten the curve of the virus, social distancing will also impact Australia’s economy.

How the COVID-19 Pandemic Is Impacting Australia’s Economy

Throughout the article, we will discuss the ways in which COVID-19 will impact businesses and unemployment rates. Since more people aren’t working and aren’t spending money, spending in Australia will reduce by $37.9 billion.

Community factors also impact Australia’s economy. People are stocking up on food, paper products, medical supplies, and more. This is causing shortages of common goods, impacting business for grocery stores and other essential businesses.

The first businesses that were impacted by the pandemic are businesses that rely on Chinese exports (such as lobster) and other businesses that rely on the movement of Chinese people, such as tourism and travel.

Now that the rest of the world is facing the pandemic, the Australian dollar is depreciating.

Overall, the pandemic is expected to reduce Australia’s GDP by $34.2 billion.

What Businesses Have Closed?

In accordance with the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020, the following premises must not remain open to members of the public:

• Amusement centres;
• Indoor recreation facilities;
• Spas, nail salons, beauty salons, waxing salons, tanning salons, tattoo parlours or massage parlours;
• Auction houses or betting agencies;
• Information and education facilities;
• Community facilities;
• Sex service premises;
• Public swimming pools;
• Skate parks;
• Gaming lounge;
• Strip clubs;
• Property operated by the National Trust or the Historic Houses Trust;
• Outdoor playground equipment in a public place; and
• Outdoor gymnasium in a public place.

Additionally, the following premises must not remain open to members of the public unless they meet the exceptions set out within the Public Health Order:

• Pubs and registered clubs, except for:
• Selling food or beverages to be consumed off premises; or
• If the premises include a hotel or motel accommodation, then for providing food and beverages to residents to consume in their rooms.
• Food and drink premises, except for:
• Selling food or beverages to be consumed off premises;
• If premises are part of hotel or motel accommodation, then for providing food or beverages to residents to consumed in their rooms;
• If premises are part of a shopping centre, then for selling food or beverages for person to consume outside the shopping centre; or
• Selling food or beverages to truck drivers or their passengers at a truck stop, whether for consumption on or off the premises. Food and beverages can be sold at truck stops to people who aren’t truck drivers or passengers, but they must consume it off the premises.
• Entertainment facilities, except for:
• Streaming live performances.
• Casinos, except for:
• Providing food and beverages to people using the accommodation to consume in their rooms if the premises is a hotel or motel accommodation.
• Micro-breweries or small distilleries holding a drink on-premises authorisation under the Liquor Act 2007, or cellar door premises, except for:
• Selling food or beverages for people to consume off the premises.
• Places of public worship, except for:
• Conducting a wedding service with no more than 5 people (including the person conducting the service);
• Conducting a funeral service with no more than 10 people (excluding people necessary for the conduct and preparation of the funeral); or
• Conducting a service that is to be streamed or recorded, at which only the persons conducting the service and people enabling it to be streamed or recorded can be present.
• Markets, except for:
• Markets that predominantly sell food.
• Caravan parks and camping grounds, except for:
• Accommodating permanent residents, overnight travellers, people working in the local area or people who have no other place of permanent resident or their primary place of residence is temporarily unavailable; or
• Allowing visitors to visit people who are accommodating at the caravan park or camping ground with a reasonable reason.

Australia’s Unemployment Rate Continues Rising

Unemployment in Australia is set to climb to 7% by October 2020. Not only that, but unemployment rates are expected to stay high — even after the coronavirus pandemic ends. The unemployment rate is currently at 5.1%.

The reason why unemployment rates are expected to stay high is that the economy doesn’t suddenly recover and flourish during a crisis.

After the pandemic, the economy will grow slowly; businesses will have to endure restructuring and the most essential industries (hospitality, retail, and travel) are the ones that are impacted the worst.

In addition, businesses won’t be able to afford as many workers during the restructuring phase, which is when a business or company significantly modifies their financial and operational aspects. While the economy will go back to normal, it will take time — meaning Australians could be out of work longer than anticipated.

This is why Australians need to know their relief options and what they’re entitled to.

What Is Redundancy?

Redundancy is a term used to mean an employee who has been dismissed due to their employer determining that the work that they were hired to complete no longer exists, that is, their position has been made redundant. Employers encountering a business downturn caused by the coronavirus may make, unfortunately, be forced into making a position redundant.

Redundancy may occur for several reasons, such as:

• Employer becomes bankrupt
• Employer no longer needs the employee’s job
• The job is replaced by technology
• Business is slowing down due to covid-19, therefore the position must be made redundant
• Business relocates
• Business closes
• Restructuring and reorganisation

If a worker’s job is redundant, their employer has to provide redundancy pay (also called severance pay). The employee receives the pay rate for ordinary working hours, not including incentive-based payments or similar.

The redundancy pay length depends on an employee’s length of service:

• Between one and two years: redundancy pay for four weeks
• Between two and three years: redundancy pay for six weeks
• Between three and four years: redundancy pay for seven weeks
• Between four and five years: redundancy pay for eight weeks
• Between five and six years: redundancy pay for 10 weeks
• Between six and seven years: redundancy pay for 11 weeks
• Between seven and eight years: redundancy pay for 13 weeks
• Between eight and nine years: redundancy pay for 14 weeks
• Between nine and 10 years: redundancy pay for 16 weeks
• Over 10 years: redundancy pay for 12 weeks (length of time is reduced because the government assumes the employee is entitled to long service leave pay)

Your employer may apply to the Fair Work Commission to have the redundancy pay amount reduced if:

• The employer finds other acceptable employment for the employee, or
• The employer can’t afford the full redundancy amount.

Keep in mind the following employees will not be eligible for redundancy pay:

• employees whose period of continuous service with the employer is less than 12 months
• employees employed for:
  • a stated period of time
  • an identified task or project
  • a particular season
• employees terminated because of serious misconduct
• casual employees
• trainees engaged only for the length of the training agreement
• apprentices
• employees of small businesses (has fewer than 15 employees) as they are exempt from making a redundancy payment.

What Is a Stand Down?

The COVID-19 pandemic is also causing Australian employers to “stand down.” Compare a business stand down to pressing the “pause” button — a stand down is temporarily shutting down a business under government orders. A shut down can also occur when there is no work for your employees to do.

Unfortunately, if an employer orders a stand down, they don’t have to pay their employees. An employee may choose to take paid or unpaid leave, such as annual leave, for all or part of the period in which the employee would otherwise be stood down.

During the coronavirus outbreak, businesses may choose to stand down employees for the following reasons:

• the business must close due to an enforceable government direction
• a large proportion of the workforce is in self-quarantine, therefore the remaining employees cannot be usefully employed
• a stoppage of work arising from a lack of supply for which the employer can’t be held responsible for

What Employers Should and Shouldn’t Do During a Stand Down

Your employer has many responsibilities during a stand down. This includes:

• Only implementing a stand down as a last resort
• Implementing a stand down as a temporary measure
• Check employer contracts and enterprise agreements
• Provide notice if it’s required under employee contracts, award, and/or enterprise agreements
• Consider alternative measures before standing down (work from home, etc.)

In addition, businesses can apply for the Job Keeper stimulus package if they lost more than 30% of their revenue since the pandemic started. Those who have been employed by the company ever since the 1^st of March can receive stimulus payments in accordance with the stimulus package.

If an employer stands down an employee, or shuts down the business, they must return to normal business operations after the pandemic and the staff must also return to work.

If your employer is standing down an employee, or shuts down the business, in a non-compliant manner or you’re concerned you’ll lose your job when the stand down is over, the Fair Word Commission (FWC) can dispute with an employer. They can do this with mediation, arbitration, and conciliation.

It’s also recommended that employees consult with a solicitor experienced in employment law.

What Is Unfair Dismissal?

Unfair dismissal is when an employee is dismissed from their job in an unjust, harsh, and/or unreasonable manner.

If you believe your employer unfairly dismissed you during the COVID-19 pandemic, you can seek help from the Fair Work Commission (FWC). The FWC can offer compensation during this time.

Some employers are generally exempt under the unfair dismissal law, even in the face of the COVID-19 pandemic. Small businesses are a perfect example. If a small business (a business with fewer than 15 employees) follows the Code and can provide proof of this, they are exempt from unfair dismissal claims.

How to File for Unfair Dismissal

Do you believe you’re unfairly dismissed? Employees have within 21 days of termination to report unfair dismissal. First, you’ll have to schedule a mediation with an FWC staff member. Under social distancing, the mediation will be held by phone conference. If you have a representative, such as a solicitor, they can join in on the call.

Who Does and Doesn’t Receive Unfair Dismissal Compensation?

All employees covered by the national workplace relations system can apply for unfair dismissal.

This includes people who:

• Work for a constitutional corporation;
• Work in Victoria, The Australian Capital Territory or the Northern Territory (except if you are a law enforcement officer or an executive in the public sector in Victoria, or a member of the Police Force in the Northern Territory);
• Work in the private sector in New South Wales, Queensland or South Australia; or
• Work in the private sector or local government sector in Tasmania.

A constitutional corporation is defined in the Fair Work Act 2009 as either a:

• Financial corporation formed in Australia;
• Trading corporation formed in Australia; or
• Foreign corporation (corporation incorporated outside Australia) that does business in Australia.

Additionally, the following criteria must be met in order to for an employee to be eligible to unfair dismissal compensation:

• Forced to resign because of something the employer did
• Have been terminated for an unjust or discriminatory reason
• Worked the minimum employment period (12 months at a small business and six months at a large business)
• Covered by a registered agreement, which is a document between an employer and their employees regarding the employment conditions, moreover, it has also been approved by and registered with the Fair Work Commission. Example include enterprise agreements, collective agreements and certified agreements
• Covered by an award
• Earn an income less than the high-income threshold ($148,700)

If you don’t fit these requirements, you may not be eligible for unfair dismissal compensation.

Entitlement to Sick Leave and Pay

What if your business is still open but you’re infected with the virus and are forced to quarantine yourself? Are you eligible for sick leave and pay?

Under the FWC, employees are entitled to access their paid personal leave if they have to quarantine themselves. Casual employees and contractors are the exception. Employees are also entitled to access to paid carer’s leave if a family member has the virus and the staff member must care for them.

However, the paid carer’s leave doesn’t apply if healthy employees have to quarantine themselves or work from home, negotiating amongst themselves. If your business is closing due to COVID-19, you may be entitled to other forms of compensation such as redundancy pay.

Working From Home and Regular Pay

If you are a full-time or part-time employee working from home – performing your normal job duties and working your normal hours — your employer must pay you your normal wages.

What if you’re a casual employee? If you’re working from home, you still need to be paid your normal wage.

What Happens If Your Employer Is Bankrupt and Can’t Pay Your Wages?

Coronavirus has impacted almost half of Australian businesses. Companies and businesses may become insolvent and bankrupt during due to the current climate and be unable to pay your wages. You should know about the Fair Entitlements Guarantee (FEG).

The FEG provides financial assistance to Australians whose employer files for bankruptcy. This type of assistance may include:

• Wages (capped at the FEG maximum wage and delivered for up to 13 weeks)
• Long service leave
• Annual leave
• Redundancy pay (up to four weeks of pay)
• Payment in lieu of notice of termination (five weeks maximum)

The FEG can’t provide this type of assistance:

• Reimbursement payments
• Superannuation
• Bonus payments
• One-off or irregular payments or commissions

Your employer may also go into voluntary administration before bankruptcy. If so, the FWC can help employees seek unpaid entitlements.

If you wish to learn more about employees as creditors under insolvency law, click here.

What if your employer closes without filing for bankruptcy? If the business is registered under the Australian Securities and Investment Commission (ASIC), then the ASIC may help recover employees’ entitlements.

Do you suspect your former employer is engaging in illegal phoenix activity? This is when an employer liquidates their business only to form a new one and avoid their previous responsibilities, including paying employee entitlements.

If you suspect your employer is committing illegal phoenix activity, it may be reported to the Australian Taxation Office – however, it is extremely important that you speak with a lawyer before doing as you may be held accountable for any unsubstantiated claims.

Are You Struggling With Employment Issues During the COVID-19 Pandemic?

If you’re enduring employment issues during the pandemic, you may be entitled to financial assistance during this unpredictable time.

Are you unable to receive your funds? Is your former employer being uncompliant? You’ll want the help of a solicitor with expertise in employment law.

We can help handle your employment and financial issues.

Contact us today for more information.