Victoria's work restrictions – considerations for all Australian employers

03 Aug 2020

This afternoon, the Victorian Government announced a number of measures on how Victorians must work over the next six week, applying to businesses in Metropolitan Melbourne:

  • industry closures as set out below from 11:59pm, Wednesday 5 August; and
  • a requirement for all businesses that remain open in Metropolitan Melbourne to implement a COVIDSafe plan by 11.59pm on Friday 7 August 2020.Further details are to follow, but the plan is to focus on safety, prevention, and response to operate safely onsite.

These work restrictions will no doubt have a significant impact on the Victorian-based businesses directly impacted by the restrictions.  They will also indirectly impact employers across Australia. For example, a retailer in Queensland who relies on products from a particular manufacturer in Victoria might have their workflow impacted by supply chain pressure arising from the restrictions.

The new work restrictions

The work restrictions fall into three categories:

  • Businesses that remain open: Businesses that continue to operate as they currently operate. These are supermarkets, grocery stores, bottle shops, pharmacies, petrol stations, banks, newsagencies, post offices, as well as front line workers responding to the pandemic.
  • Businesses that remain open with limitations: Businesses that continue to operate but with certain restrictions.These include meatworks, warehousing, and distribution (to operate at two-thirds of normal production), construction (no more than 25% workers on site for large commercial buildings, and no more than 5 workers on site for domestic home building). Construction of strategic critical infrastructure is unlikely to be affected but considered project by project.Restrictions in relation to abattoirs apply across all of Victoria rather than just Metropolitan Melbourne.
  • Businesses that will cease on-site operations: Business that will not be permitted to open on site.These include some retail, some manufacturing, and some administration.Further detail of these businesses are to be provided.We will be analysing those and communicating to impacted clients.

What can national employers do in response to the restrictions?

Victorian employers need to identify the specific restrictions that apply to them based upon industry once further details are provided, including any potential exemptions.

National and Victorian employers: For those industries with closures to on-site work resulting in stoppages of work (or where the restrictions otherwise result in a stoppage of work, such as an interstate business relying on Victorian manufacturing that cannot be obtained elsewhere), employers may need to consider whether they can and should stand down employees. The Fair Work Act (FW Act) allows employers to stand down employees in two ways using:

  • the general stand down provision under section 524 of the Act; or
  • temporary JobKeeper enabling stand down directions, for employers eligible for JobKeeper in respect of those employees receiving JobKeeper payments.

An employer must also consider any relevant award, enterprise agreement, employment contract or workplace policy as these instruments may have different or supplementary stand down rules.

Stand downs under section 524 of the Act

Under section 524 of the Act, employers may stand down employees who cannot be usefully employed in circumstances where there is a "stoppage of work for any cause for which the employer cannot reasonably be held responsible". Depending on the circumstances, a stoppage of work arising from the new work restrictions would likely meet this criteria.  During a period of stand down, employees are not entitled to payment of salary.  They can generally be provided with access to leave.  

Stand down under the JobKeeper provisions

Under section 789GDC of the Act, employers who qualify for JobKeeper may direct eligible employees to temporarily reduce their hours or days of work (including to no hours) where the employee cannot be usefully employed due to government initiatives to slow the transmission of COVID-19.  Employers must give three days' notice of a direction and consult with the employee about the direction.

If an employer has given a direction under section 789GDC, the employer must pay the employee the greater of the following:

  • $1500 (before tax) per fortnight; or
  • their usual pay for work performed (including leave entitlements, holiday pay and penalty rates).

Other considerations

A stand down as a result of the new restrictions may not be the most appropriate option for some employers.  Alternative measures include agreeing to employees taking their accrued paid leave, agreed fraction reductions or other salary-related savings (e.g. agreed pay reductions/freezes).  If, as a result of the restrictions, the work performed is no longer required and may not return in the short term, employers may consider whether redundancies are appropriate.

What rights do employees affected by childcare/school closures have to use carer's leave?

Full-time and part-time employees can take carer's leave if they cannot work because they need to look after a family or household member who is sick with COVID-19, or if there is an unexpected emergency.  Employers should consider and seek advice as to whether the recent work restrictions might enable an employee to take carer's leave (e.g. due to a childcare centre closure, an employee needs to care for their child during work hours). 

What should employers do now?           

  • Employers need to consider the immediate impact of the new work restrictions, including determining which of the three categories they fall into under the restrictions.This should include considering what options are available under the FW Act in relation to employees whose work is impacted by the restrictions.Employers who have not already implemented detailed working from home plans should do so if they will be moving more broadly to working from home.
  • Strong, ongoing communications with your workforce and consultation where required should occur to minimise impact and maximise compliance.
  • Develop a COVIDSafe Plan by Friday 7 August
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.