Given the Victorian Government have ordered localised lock downs across ten Melbourne postcodes, if an employer needs to shut down all or part of their business due to such localised lock down, the process to follow and the options available will be similar to the state-wide lockdown implemented earlier this year. These include:
- Stand Down of Employees.
- Changes to employee duties and location of work.
- Requests to take annual leave.
Stand Down (for non-JobKeeper employees)
If a business is required to temporarily cease its operations due to a localised lockdown implemented by the government, the employer has a right to stand down any employees that cannot usefully be employed as a result. This is because the closure is in accordance with government advice and outside the control of the employer. This also applies to related businesses (for example, a supplier to a business if the business is required to close) who must cease operations and consequently employees cannot be usefully employed.
Stand down periods are generally unpaid, but an employer may wish to allow an employee to take paid leave (such as annual leave or long service leave) if requested. As above, some modern awards and enterprise agreements may contain stand down provisions for unforeseen situations which are outside an employer’s control.
Stand Down (for Employees receiving JobKeeper payments)
In addition, employers can stand down employees who are eligible for Jobkeeper payments (referred to as a “Jobkeeper enabling stand down”) if the employee cannot be usefully employed for their normal days or hours during the Jobkeeper enabling stand down period due to:
- changes to business attributable to the COVID-19 pandemic; or
- government initiatives to slow COVID-19 transmission (including localised lock downs).
This includes a partial stand down.
Employers must give employees at least 3 days’ written notice of an intention to place them on a Jobkeeper enabling stand down (or lesser period by agreement).
During the Jobkeeper enabling stand down (including any partial stand down), the employee must be paid at least the amount of the Jobkeeper payment. An employee’s hourly rate cannot be reduced as a result of a JobKeeper enabling stand down.
Changes to Duties and Location of Work
Recently enacted Jobkeeper legislation also provides that employers can direct employees that receive Jobkeeper payments to perform any duties within their skill and competency, as long as the duties are safe, and the duties are reasonably within the scope of the employer’s business operations. In addition, most employment contracts contain a clause permitting an employer to vary or modify an employee’s duties to those for which the employee has the skill and competence (regardless of whether the employee is receiving Jobkeeper payments or not).
Employers can also direct employees receiving Jobkeeper payments to perform duties at a place (including the employee’s home) that is different from the employee’s normal workplace if the place is suitable for the duties and it is safe. If the place is not the employee’s home, the direction must not require the employee to travel a distance that is unreasonable in all the circumstances. Most employment contracts also contain a clause outlining that employees may be required on occasion to travel away from their predominant workplace to carry out their duties.
As to the utility of changes to location of work, it is important to bear in mind that employees who live or work in localised lockdown regions should avoid travelling to other regions for work where possible.
Where employees are required to travel to and from work and they reside in a localised lockdown region, employers should consider providing their employees with a notice on company letterhead, confirming they are traveling for work purposes. The notice can then be provided to the Victorian Police in the event that the employee is stopped while on the way to, or from work.
For non-award covered employees, employers can reasonably direct their employees to take annual leave for a period during a shut down. For award-covered employees, unless employees have ‘excessive’ leave accruals (8 weeks), typically, employers must reach an agreement with employees should they wish for employees to take annual leave during the shut down. It is also recommended employers check any other applicable industrial instruments when considering annual leave directions.
Importantly to note, employees receiving Jobkeeper payments can be requested to take annual leave and/or take annual leave at half pay, provided that the leave arrangement would not result in the employee’s leave balance falling below two (2) weeks (unless otherwise agreed), regardless of whether the employee is covered by an industrial instrument or not. Employees cannot unreasonably refuse such a request.