Services

HG Alert: The rights and obligations of employers and employees during natural disasters - 18 Jan 2011

The recent flooding across Australia has seen substantial and prolonged disruption to many businesses. Problems range from minor inconvenience to complete shutdown, with limited prospects of returning to anything like normal operations any time soon. It is a time of great financial uncertainty and worry for affected business operators and their workers. Employers are worried about the cost, while workers are worried about their financial security.

Even as some areas emerge from the disaster, in others areas, the potential for ongoing and new weather interruptions to business, and ongoing concerns for affected business operators and their employees, will continue for at least the next few months.

If you are an employer, what obligations do you have to workers who, through no fault of your own:

  • have no work to do because your business premises are damaged or closed?
  • can't get to work because of flooding?
  • are unable to come to work because of their own circumstances?
  • want to be or are engaged in emergency service work or the recovery effort?

The following questions and the answers to them might help.

Please note that the information provided here is general information applicable to National System Employers to whom the Fair Work Act applies (and not, for example, public servants and local authorities in most States and Territories). In some cases, the rights and obligations of the parties will vary according to the industrial arrangements applicable to them under an award, collective agreement, continuing statutory individual agreement, common law employment contract, workplace policy, or a combination of these. For advice specific to your situation, you should consult a specialised industrial and employment law advisor.

Different considerations will also apply to contractors. Again, in situations involving contracting arrangements, we recommend that you seek specialist advice.

Questions and answers

1. My business operations are badly affected and I have no work for some or all of my employees. Do I have to pay them when I can't provide work for reasons beyond my control?

With some exceptions (see below), the answer is generally yes.

2. There is a lot of cleaning up to do at my business premises before we can return to normal work. Can I ask employees to help with that?

Generally, yes. However, before asking employees to participate in clean-up work, you must be satisfied that they are both competent to do so, and are physically capable of doing the work. If necessary, you should enquire about any physical limitations employees have before allocating work to them of a kind they would not usually perform. Some tasks might also involve specific safety requirements or specific training or safety induction - for example, in the safe use of equipment or cleaning substances, or preventing biological contamination from dirty water. Remember that your workplace health and safety obligations will continue to apply, and that significant criminal penalties can result from breaches of health and safety laws.

3. Because of the flooding, I can't provide an employee with their usual work, but I have other work they can do. Can I ask or direct them to do that work instead?

Generally yes, provided that the employee is capable (by experience, training or qualification) of doing the work and it presents no safety risks. See the notes to question 2.

4. Can I direct an employee to work at a location other than their normal place of work if, because of flooding, it can't be used?

Generally, yes. You should, however, check any applicable award/agreement to see if it provides otherwise. If it does, your ability to direct an employee to work at another location will be limited by the terms of the instrument.

Depending on the alternative work location, some employees may either not be able access the location (or do so easily) or may spend significantly longer travelling to work, therefore incurring additional costs or attracting additional pay entitlements. In these circumstances, an employee may be able to refuse to work from the other location or may be entitled to reimbursement of additional travel costs incurred and/or payment for additional travel time.

5. Can I allow or require an employee to work from their home while my business premises are flood affected?

Generally yes, although depending on a range of variables, some safety issues might arise over which you have no control. Given the strict liabilities imposed by workplace health and safety laws, this could expose you to liabilities about which you know very little or nothing.

6. Can I force an employee to take paid annual or personal leave if I can't usefully employ them for a period for reasons beyond my control?

Generally speaking, you can direct an employee to take a period of annual leave. You cannot, in these circumstances, direct an employee to take personal or carer's leave.

You can direct an employee to take a period of annual leave if the direction is reasonable. A direction to do so may be reasonable if your business is being shut down for a period of time. While a common example is a Christmas shut down period, business closure due to a natural disaster is also likely to be reasonable.

However, you should carefully review the provisions of any applicable award or enterprise agreement before directing employees to take annual leave, as it might contain more detailed provisions in relation to a direction to take annual leave. Many awards require employers to give employees a specified period of notice (such as four weeks) before they can be directed to take annual leave. In these cases, the required notice periods would usually negate the effectiveness of forcing an employee to take annual leave to cover a forced absence from work.

7. Do I have to make any adjustments to the leave entitlements of employees who were on paid leave of any kind during flood interruptions to my business?

With some exceptions, the answer is generally no. However, an employee cannot be on annual leave if they are on any other form of leave (except parental leave) at the same time. For example, an employee on annual leave who becomes, during or as a result of a flood event, entitled to take paid sick or carer's leave, may apply to take sick or carer's leave for the relevant period and ask that you credit their annual leave entitlement accordingly.

Similarly, an employee on annual leave called up as a member of the SES or other "recognised emergency management body" to assist in the management of a natural disaster would be eligible to take community service leave. An employee in this position might request to have their annual leave balance adjusted for the period they were on community service leave, although community service leave is generally unpaid. Community service leave is discussed further in question 14 below.

8. While I restore business operations, I have nothing else for some or all of my employees to do. Can I "suspend" their employment without pay for so long as I am unable to provide work? If so, how do I go about that?

Generally, yes. The Fair Work Act allows an employer to stand down (or "suspend'') an employee without pay in specified circumstances. This includes where an employer has had to close its workplace for a reason for which the employer could not reasonably be held responsible. Recent (and ongoing) flood interruption to a workplace is likely to meet this description.

If you have to suspend an employee without pay, you should confer with them to inform them of your decision and the reasons behind it. This might also be a time to discuss other options, including those outlined above relating to alternative work arrangements or use of available leave entitlements. To the extent that it is possible, you should give affected employees an estimate of the period for which their employment may be suspended. You should keep in regular contact with your employees during this period to keep them up-to-date with your business recovery process.

Of course, some employees suspended from their employment on an unpaid basis in these situations may choose to resign so as to obtain other paid work. They are entitled to do so.

9. My business has been so badly affected that I will not be re-opening at all or won't be able to operate for some time. Can I dismiss my employees on the grounds that their services are not going to be required for the foreseeable future? What are the implications of that?

Yes, subject to compliance with applicable industrial requirements relating to redundancy situations, of which this is an example. In many cases employers will have obligations to consult affected workers; to genuinely consider redeployment opportunities; and, upon termination, to give up to five weeks' notice or pay in lieu, and, for employers with 15 employees or more, to pay up to 16 weeks severance or redundancy pay.

10. An employee's home was badly affected by the floods. Are they entitled to paid or unpaid leave to sort out the personal problems that caused?

Generally speaking, yes. Paid carer's leave is available where an employee is required to provide care or support for members of their immediate family or household because of an unexpected emergency. A significant flooding event will qualify an employee to take carer's leave to deal with the aftermath and to support their immediate family or household. Carer's leave is limited, and comes out of the personal leave entitlement.

An employee who has accrued annual leave available may apply to take it in these circumstances (with your agreement). You can also agree to allow an employee to take annual leave in advance.

Long serving employees (with more than 10 years continuous service) who are entitled to take paid long service leave may apply (with your agreement) to take such leave in these circumstances. Note that long serving casual employees in Queensland are also usually entitled to paid long service leave.

If an employee was injured or falls ill during the floods or clean-up process, they may also be entitled to take paid sick leave (subject to their leave balance and the provision of any medical certificates that may be required by their employer). Sick leave, like carer's leave, also comes out of the limited personal leave entitlement.

Where a member of an employee's immediate family or household sustains a life threatening injury or illness or dies, the employee is entitled to two days' paid compassionate leave (unless they are casual employees, in which case the leave is unpaid). Compassionate leave is separate from the personal leave entitlement, available to be taken as sick or carer's leave.

Where an employee is not entitled to any of the above paid leave, you can nevertheless allow the employee to take paid or unpaid "special" leave in order to address their personal circumstances.

11. An employee can't physically get to work because flooding has prevented their access. Do I have to keep paying them while this continues?

Generally not, although you could allow them to access any accrued but untaken annual or long service leave entitlements, or to take paid annual leave in advance, provided you and they agree to that.

12. An employee is not directly affected by the floods, but has taken time off to assist family members who are directly affected. What is their entitlement to do that?

An employee may be entitled to take paid or unpaid carer's leave in this circumstance. Carer's leave is available where an employee is required to provide care or support for members of their immediate family or household because of an unexpected emergency. Natural disasters will qualify.

Where an employee exhausts their entitlement to paid carer's leave, they may be entitled to take further periods of unpaid carer's leave.

13. An employee was not directly affected by the floods but wants to take time off work to perform volunteer community work. Do I have to allow that?

Generally not, but you can allow it on a paid or unpaid basis if you wish to do so.

14. An employee is a member of the State Emergency Service and was called to perform emergency service work when the floodwaters started to rise. Are they entitled to time off for that and, if so, are they entitled to paid leave?

Employees who are members of the SES, or another "recognised emergency management body" (as defined in the Fair Work Act) are entitled to take community service leave for the time they were engaged in the emergency work. This leave is generally unpaid, although some employers treat it (or part of it) as paid leave, either because they choose to do so or have agreed to do it.

The period for which an employee can be absent on community service leave is not specified in the Fair Work Act but must be reasonable considering:

  • the time the employee is engaged in the emergency work;
  • reasonable travelling time associated with the work; and
  • reasonable rest time after performing such work.

To be considered community service leave, the employee must, as soon as practicable, notify you of their absence and advise you of the expected period of their absence.

For more information about your rights and obligations when business is disrupted by a natural disaster, please contact HopgoodGanim's Industrial and Employment Law team.