Managing workplace challenges during COVID-19

As the extraordinary COVID-19 crisis continues to severely impact the Australian and global economies, organisations are facing increased challenges in managing employee issues. In this post, we set out some key considerations for businesses addressing the impact of COVID-19.

1. Managing employee health and wellbeing

In accordance with their responsibilities under the Occupational Health and Safety Act (2004) (Vic) and common law, Victorian employers should be proactive in taking all reasonably practicable measures to ensure the health and safety of their employees. This extends to upholding the physical and psychological wellbeing of their employees in following Government directives such as working from home (where possible), practicing social distancing and leaving home only for essential purposes.

In this regard employers should also be proactive in dealing with the personal, financial and societal impacts as they arise. To address this, employers should assist employees to:

a) follow guidance on what is a safe work from home environment;

b) become familiar with ergonomic practices, such as referring to self-assessment work from home checklists;

c) maintain daily communication with their team; and

d) be adequately trained and have the equipment necessary to work from home.

2. Employee remuneration

As many businesses experience a reduction in cash flow and therefore a reduced ability to pay employees, employers should be mindful of the following options available to them with regards to their employees:

a) taking leave – employees should be provided access to their accrued annual leave or long service leave, or if the employee does not have any such entitlements, employers could propose that the employee take special paid leave. If an employee is working from home and becomes unwell or has to take on a carer’s role for an immediate family member, then the employee can take personal leave during this period;

b) salary reductions and reduced working hours – an employer may propose reduced working hours in accordance with the employee’s contract, award or enterprise agreement, or the new JobKeeper legislation (as outlined below). As employers are unable to alter pay or work hours without consent or prior consultation (other than under a JobKeeper direction where the employee cannot be usefully employed for their normal hours), employers should provide information to their employees about proposed changes to their pay and work hours and to invite employees to give their views about the impact of the proposed changes;

c) standing down employees – an employer can stand down an employee for any cause which the employer cannot reasonably be held responsible (which in the current circumstances extends to the COVID-19 crisis) where the employee cannot be usefully employed; and

d) redundancy – if an employee’s job is no longer required, then an employer may make the employee’s role redundant.  Particular attention must be given to ensure that there is a genuine redundancy.  Also, if an employee is subsequently rehired, then the employee is entitled to retain severance payments they receive on termination.

It is important that employers manage any employment changes to ensure that they are compliant with the law and not referred to the Fair Work Commission.

3. JobKeeper payments 

On 8 April 2020, the Federal Government passed emergency legislation which amended the Fair Work Act and introduced the JobKeeper payment subsidy. The JobKeeper payment is a $130 billion relief package for businesses impacted by the COVID-19 crisis to assist in keeping employees in their positions.

An estimated 750,000 business have applied for JobKeeper, with 6 million employees being eligible to receive a fortnightly payment of $1,500 through their employers for a maximum period of six months. This will be reviewed at the end of July 2020 and may be further amended as the situation surrounding COVID-19 changes.

To be eligible for the JobKeeper payments, the business must apply to the ATO and demonstrate they:

a) have a turnover of less than $1 billion and the turnover has fallen by more than 30%; or

b) has a turnover of $1 billion or more and their turnover has fallen by more than 50%; and

c) the business is not subject to a major bank levy.

The decline in turnover test is based on projected GST turnover with a relevant comparative period e.g. projected turnover for April 2020 compared with April 2019 (monthly) or projected turnover for quarter 4 for 2020 compared with that quarter in 2019 (quarterly).

This new legislation overrides any modern award, enterprise agreement or employment contract that may state otherwise. The new amendments to the Fair Work Act and JobKeeper subsidy legislation should be carefully assessed to ensure compliance.

JobKeeper payments will be available for employees who are employed full time, part time or casually as of 1 March 2020. However, this only applies to Australian citizens, permanent residents, New Zealand citizens and certain visa holders (but not subclass 457 or 482 visa holders).

The new stand down provisions allow an employer to give a direction (being a JobKeeper enabling stand down direction) to an employee to:

a) not work on a day or days on which the employee would usually work;

b) work for a lesser period than the period which the employee would ordinarily work on a particular day or days;

c) work a reduced number of hours (compared with the employee’s ordinary hours of work) and not be paid for the period that work is not performed.

This situation arises when an employee has no (or a reduced level of) useful work available to perform because of the COVID-19 crisis or a Public Health Order and Direction imposing restrictions on individuals and businesses. Useful work does not have to be the work that the employee ordinarily performs, but it does need to be genuine productive work that provides a “net benefit” to the employer.

Depending on the amount of hours of productive work performed, it is to be decided by the employer whether they elect to top up the payment to cover all or a proportion of an employee’s usual wage, subject to any pre-existing employment obligations that may apply (i.e. employers need to continue to comply with their obligations to employees under any agreements, modern awards etc).

Other key aspects of the JobKeeper subsidy include:

a) the minimum payment guarantee under the JobKeeper payment ensures that an employee receives an amount that is not less than $1,500 per fortnight;

b) amounts payable in JobKeeper payments include incentives based payments and bonuses, loadings, leave, overtime and monetary allowances;

c) an employer can direct an employee to perform their duties at a place outside the normal workplace, including at the employee’s residence;

d) subject to certain conditions, an employer can direct an employee to work on different days and times compared to an employee’s normal ordinary hours of work;

e) if an employer stands down an employee who is paid hourly, the employer must ensure that the employee’s hourly base pay rate is not less than the rate that usually applies to the employee (as if the direction had not been given to the employee);

f) if an employee is stood down (in whole or part) they can obtain a second job to make up the difference in their JobKeeper payment; and

g) the Fair Work Commission has jurisdiction to hear any JobKeeper dispute.

Should you wish to further discuss managing employee issues during the COVID-19 crisis or generally, please don’t hesitate to contact David Woodford or Alfonso Grillo of our office on 03 8621 8888 or reach them by email at or, respectively.

Alfonso Grillo

David Woodford