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|Victorian Chamber Employer Guide|
Apprentices and Trainees: Businesses can claim 1/2 their salary since January
If you are employing you will get a reduction against your BAS statement of between 10k-50k this financial year and the same again in the next financial year
If you earn less than 1k per fortnight, you can immediately access the Jobseeker allowance with the Cornoavirus supplement. Approximately $110 per fortnight......and you can continue to run your business.
Staff: can apply if stood down or had significant reduction in hours for the jobseeker allowance including the Coronavirus supplement as above
Access to Superannuation: You can if you need to, apply to withdraw 10k from your super this financial year and a further 10k next financial year.
Access to low interest loans: Up to 250k with a 50% guarantee by the Federal Government resulting in a significant reduction in the rate ( expected around 4.5%). No payments for 6 months. A great boost to cashflow.
Banks: By application will put off interest and principal payments on your loans for up to 6 months depending on the bank.
The following non-essential services and businesses are now restricted from opening.
JobSeeker Payment claims can be submitted online 24/7. Online service capacity is being increased. Read More.
Tighter restrictions on weddings, funerals, fitness classes, beauty salons, arcades, play centres and more from 11:59pm, 25 March. Read more.
New insolvency rules announced by the federal government, directors will not be held personally responsible for any debts incurred in the ordinary course of business during the next 6 months.
This supports small businesses to keep trading throughout this crisis in circumstances where they believe they can get the business back on track when things return to normal.
In addition, extra time has been given to negotiate extended payment terms or reduced payments with the creditors of the business.
Creditors cannot chase overdue payments, that is, issue a statutory demand unless the debt owed is $20,000 or greater, increased from $2,000. If you do receive such a demand, you now have 6 months to satisfy the demand or apply to a court to have it set aside, increased from 21 days.
If you suspect you may have the coronavirus disease (COVID-19) call the dedicated hotline – open 24 hours,
7 days. DHHS 1800 675 398
Summary of Victorian Government support summary
$1.7 billion Economic Survival and Jobs Package – key initiatives
- $500 million Business Support Fund – to assist small and medium-sized businesses in sectors most impacted by COVID-19, including hospitality, retail and tourism. The Victorian Government is working with the Victorian Chamber of Commerce and Industry, Australian Hotels Association and Ai Group to administer the fund to help businesses survive and keep people in work. Register here to receive further information about the package
- Payroll tax refunds for the 2019-20 financial year for eligible small and medium-sized businesses with payroll of less than $3 million. Businesses can also defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.
- Waiving of liquor licensing fees for 2020 for affected venues and small businesses
- Support package for Victorian workers impacted by COVID-19 – new Working for Victoria Fund will help employees who have lost their jobs as a result of COVID-19 to access new job opportunities
Federal Government support summary
Economic Response Package in response to COVID-19 – key initiatives
- Payments for eligible small and medium-sized businesses that employ people – payments between $20,000 and $100,000 to help businesses keep operating, pay rent, bills and retain staff. Payments are linked to staff wage tax withholdings (note: this expands on the initial Boosting Cash Flow for Employers measure announced on 12 March 2020)
- Apprentice and trainee wage subsidy – eligible employers can apply for a subsidy of 50 per cent of apprentice or trainee wages paid between 1 January 2020 to 30 September 2020 up to a maximum of $21,000 per eligible apprentice or trainee
- Increasing the instant asset write-off – threshold has been increased from $30,000 to $150,000 for eligible businesses
- Deductions on eligible asset installation – eligible businesses can deduct 50 per cent of the cost of an eligible asset on installation with existing depreciation rules applying to the balance of the asset’s cost
- Access to loans and credit:
- Government guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs to provide businesses with funding to meet cash flow needs.
- Temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers
- Temporary early release of superannuation – individuals affected by the economic impacts of COVID-19 can apply for early release of superannuation up to $10,000 in each of the 2019-20 and 2020-21 financial years. No tax will apply and this will not affect eligibility for income support payments
- Improved access to Centrelink income support payments:
- Those unable to work due to COVID-19 – you and your employees may be eligible for a payment if you are unable to work; are in isolation or hospitalised; or caring for children due to COVID-19. Eligibility criteria for income support payments have also been expanded and waiting periods may be waived
- Time-limited COVID-19-related supplement – $550 per fortnight supplement for existing and new recipients of Jobseeker payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
- Australian Tax Office support for business: the Australian Tax Office (ATO) is providing relief from some tax obligations for businesses affected by COVID-19:
- This may include deferring some payments and varying instalments, such as income tax, activity statement, pay as you go (PAYG) instalments, FBT and excise payments.
- Businesses having financial difficulties because of COVID-19 can call the ATO’s Emergency Support Infoline on 1800 806 218 to discuss your situation.
Other relevant non-government initiatives
Deferral of loan repayments – for small businesses affected by COVID-19 for six months. Small businesses should contact their bank to apply for deferral if they have not already been contacted.
Managing employees and leave entitlements
What do I do if an employee is feeling unwell and suffering flu like symptoms?
According to the WHO website the most common symptoms of COVID-19 are fever, tiredness, and dry cough. Some patients may have aches and pains, nasal congestion, runny nose, sore throat or diarrhoea. These symptoms are usually mild and begin gradually.
If an employee presents with these symptoms they should be directed to follow advice from the Australian Government and seek urgent medical attention if they suspect they have contracted the COVID-19 virus.
The health and safety of staff and those they come into contact with must be an employer’s top priority. This should dictate the approach any employer takes to responding to employees that may have come into contact with the COVID-19 virus.
An employee can (of course) avail themselves of their accrued sick leave if they take time off work due to being ill with the COVID-19 virus.
Under the Fair Work Act, national system employees (other than those engaged on a casual basis), are entitled to 10 days each year paid sick leave (personal) for each year of service. This entitlement accrues on a progressive basis during each year of service and many employees will have an accrual in excess of 10 days.
There is no limit on the number of days of accrued leave that can be taken as personal leave.
What do I do if an employee has recently returned from overseas (from 11:59pm Sunday 15 March 2020)?
The Australian Government has imposed a universal precautionary self-isolation requirement on all international arrivals in Australia (effective as at 11:59pm Sunday 15 March 2020).
This means that all employees - whether they be citizens, residents or visitors - will be required to self-isolate for 14 days upon arrival in Australia because of their possible or actual exposure to the COVID-19 virus.
Self-isolation means staying in your home, hotel room or provided accommodation and not leaving for the period of time that you are required to isolate for (currently 14 days). Only people who usually live in the household should be in the home. No visitors should be allowed.
The Department of Health has issued isolation guidance which can be accessed here.
Technically an employee is not entitled to take sick/carer’s (personal) leave under the Fair Work Act unless they are absent from work due to either a personal injury or illness, a need to care for a member of their immediate family or household who is sick or injured or due to a family emergency.
This means that an employee returning from travel who is required by government to self-isolate, but is not yet sick themselves cannot avail themselves of sick (personal) leave. This is because, to qualify for personal leave, an employee must be “not fit for work” because of an illness or injury affecting them. It is unlikely that this pre-requisite will be met by persons who are not yet diagnosed as ill but merely require isolation.
On a practical level, however, it may make sense for employers to look to utilise practical solutions during the employee’s absence due to government imposed quarantine, so that employees do not suffer from a loss of pay during the isolation period where possible, such as:
• allowing the employee to work from home (where feasible), during the quarantine period;
• allowing employees to avail themselves of other leave available to an employee (such as annual leave, long service leave or any other leave available under an award, enterprise agreement or contract of employment); or
• any other paid or unpaid leave by agreement between the employee and the employer (e.g. personal leave or discretionary paid leave).
Note: Employers should be aware they may attract the risk of breaching the National Employment Standards in the Fair Work Act if they allow an employee to use personal leave where the employee is not in fact ill, even where the employee agrees to this approach.
Always be sure to also check any applicable modern awards, enterprise agreements, employment contract terms and company policies – as they may contain additional rules or entitlements which may apply to your workplace and employees.
What do I do if an employee has been in contact with someone who has or may have COVID-19 or has returned from overseas prior to 11:59pm Sunday 22 March 2020?
If an employee has recently return from overseas (prior to 11:59pm Sunday 22 March 2020) or has been “in contact with” someone who has or may have COVID-19 they may also be required to self-quarantine because of their possible or actual exposure to the virus.
Similar to the position stated earlier employees in these circumstances who need to quarantine but are not yet sick themselves cannot avail themselves of sick (personal) leave. This is because, to qualify for personal leave, an employee must be “not fit for work” because of an illness or injury affecting them. It is unlikely that this pre-requisite will be met by persons who are not yet diagnosed as ill but merely require isolation.
Again however we suggest discussing the matter with your employees and trying to utilize the practical solutions set out above, so that employees do not suffer from a loss of pay during the isolation period where possible.
What happens if an employee’s immediate family member contracts the COVID-19 virus or their children’s school is closed?
An employee may use paid personal leave to take time off to care for an immediate family member or household member who is sick or injured or to help during a family emergency.
Previous case law around the meaning of a “family emergency” suggests that it is likely to include providing care to a child whose school has been forced to close with little or no notice as a result of COVID-19. Therefore an employee in this circumstance will likely also be able to access their personal leave for this purpose even if their child is not ill or injured.
The amount of accrued paid carer’s leave that can be taken is not capped, subject to the employee’s accrued balance of personal leave at the time.
If an employee exhausts their accrued paid personal leave they may also access up to two days’ unpaid carer’s leave (or a longer period with the agreement of their employer) in order to care for a family member with a personal illness or injury or to help during a family emergency.
What if an employee may have contracted COVID-19 but they still wish to attend work?
If an employee maintains that they are able to work (but are not sick and not able to work from home) then employers face a difficult scenario: the employee says they are fit to work, but the employer has concerns that the employee is not fit to work (perhaps because they may have been exposed to COVID-19 through travel or close contact with someone who has tested positive) without posing unacceptable safety risks to the workforce. Remembering that employers have a duty to provide and maintain, so far as is reasonably practicable, a working environment that is safe and without risks to the health of employees. As well as workers having a duty to take reasonable care for their own and others’ health and safety
“In contact with” is defined as requiring:
•Greater than 15 minutes face-to-face contact in any setting with a person who has tested positive for COVID-19 in the period extending from 24 hours before onset of symptoms in the confirmed case; or
•Sharing a closed space for 2 hours or more with a person who has tested positive for COVID-19, in the period extending from 24 hours before onset of symptoms in the confirmed case.
The best means of resolving this impasse is to first discuss the issue with the employee and then if necessary direct the relevant employee to undergo testing if testing is available.
Employees can be directed to obtain medical clearance, which may include being tested for coronavirus, provided this is reasonable and based on factual information about health and safety risks.
Once the test is undertaken, if the employee is cleared, they are able to return to work (best practice would dictate the employer pays the employee for the relevant period). If the employee tests positive, then they can be permitted to take personal leave for the duration of their absence.
What about casual employees?
Casual employees are entitled to not attend work when they are unwell or injured. However, they are not entitled to any additional payment of sick leave for any shifts they do not work as they have already been paid an additional loading in lieu of other entitlements including sick leave. This means that a casual employee who is diagnosed with COVID-19 may be required to refrain from presenting to work without a legal entitlement to additional payments.
Furthermore, where shifts to casual employees are reduced either on account of business downturn or because the employee has been required to isolate (due to contact or recent travel), the employees will not be entitled to payment during this period.
Casual employees are entitled to 2 days unpaid carer’s leave to take time off to care for an immediate family member or household member who is sick or injured or to help during a family emergency.
Can you send an employee home if you observe COVID-19 virus symptoms?
Employers have a legal responsibility to ensure the health and safety of those in the workplace, including visitors. Where an employer holds a reasonable belief that an employee is posing a health risk – such as showing symptoms of the COVID-19 virus – it would not be unreasonable to send the employee home on sick (personal) leave on the basis that they are unfit to work safely and without risk to the health of others in the workplace.
Employers should ask the employee to seek medical advice / testing and a clearance before returning to work.
If the employee maintains they are able to work, consider whether it is practical for the employee to work from home for part or all of the period prior to obtaining the test results.
Once the test is undertaken, an employee may return to work if they are cleared. If the employee tests positive, see above regarding any pay and leave obligations and entitlements that may apply.
During the COVID-19 outbreak, it may also be prudent to remind employees of their obligation to take reasonable care not to adversely affect the health and safety of other persons, and ask that they notify their employer immediately if they are suffering flu-like symptoms.
What if you wish to direct an employee to not attend work but the employee is not showing signs of COVID-19 and is not required to isolate themselves under Australian government direction (and not subject to a stand down)?
If an employer directs an employee not to attend work, despite them being fit and able to do so (and not subject to any government isolation requirements) then we suggest best practice is for that employee to continue to get paid.
In this situation, it is also important to check and consider whether you can simply issue this direction (e.g. pursuant to the employee’s contract or as a reasonable and lawful direction based on factual information about health and safety risks) – or whether you need employee agreement. Again, also check any applicable industrial instruments (such as enterprise agreements, awards), contract terms and company policies – and seek specific advice.
Work related travel
Employers should make sure that travel policies clearly address where an employee can travel to, the reasons for travel and permission required.
Employers need to be constantly assessing the risks of requiring employees to travel, particularly overseas, even for critical meetings.
Employees should be informed that travel policies are constantly under review and may be subject to regular change.
Employers should also carefully check any insurance cover for work-related travel.
Can you give directions about non-work related employee travel?
Employers must be mindful not to give directions to employees that might extend to or impact the personal or private activities of the employee and which would not otherwise affect their work. Only in exceptional circumstances would it be regarded as reasonable for an employer to direct an employee how to conduct themselves outside the workplace and have the right to extend its supervision over the private lives of employees. In considering this issue, a court will look at whether there is a significant connection between the outside activity and the employee’s employment.
It is possible that the current COVID-19 circumstances may give rise to such a sufficient connection, given subsequent quarantine at the government’s direction that the employee will be subject to, meaning an employer may be in a position to potentially direct staff to abide by the travel advisories of the Australian government (smartraveller.gov.au).
At a minimum employers should inform employees that when making travel plans they should understand the risks they are taking by reference to the government travel advisories and alert them to the fact that they will be subject to government quarantine measures when they return.
Visitors to workplaces
Taking extra precautions in allowing visitors to enter the workplace is important for employers in limiting exposure to COVID-19 in the workplace.
Employers have the right to ask visitors to provide information in advance as to whether they have flu-like symptoms, have been in contact with anyone infected with COVID-19, or travelled to a high-risk area.
If a visitor answers affirmatively to any of these questions, employers should strongly consider their work health and safety obligations and should request the visitor not come to the workplace until they have been asymptomatic for 14 days or can provide a clearance letter from a physician.
Key take outs
è If your employee is sick, recommend that they take their personal leave
è If your employee is not sick, recommend that they take their accrued leave otherwise this will be unpaid
è This is a stressful time for everyone, work with your employees to amicably come to an agreement which will be mutually beneficial
Changing or scaling down operations
The following section addresses the worst-case scenarios and suggests some contingency strategies that business may be considering to limit the impact of COVID-19.
Varying hours or rosters
As a result of the spread of COVID-19 some employers may be considering varying operations, for example to reduce the risk of exposure for employees by altering start and finishing times or to address changes in demand patterns of consumers.
An employer’s ability to vary hours and/or rosters will largely depend upon the applicable industrial instrument (e.g. enterprise agreement or award) or contract that applies to their employees.
For example some employers whose workforces are covered by an award or enterprise agreement may be restricted from altering work arrangements without first consulting with employees (and potentially also union/s).
We therefore strongly recommend if you are considering making certain variations to your operations that you get advice on your specific options and obligations prior to making any changes.
As a result of the potential further spread of COVID-19 some employers may be forced to consider scaling down operations. For example by:
• placing a freeze on new hires;
• reducing any supplementary labour such as contractors or labour hire workers;
• reducing employee hours; or
• providing annual or long service leave in advance or at half pay.
An employer’s ability to make such changes will largely depend upon the applicable industrial instrument (e.g. enterprise agreement or award) or contract that applies to their employees.
We therefore strongly recommend if you are considering scaling down your operations that you seek advice on your specific options and obligations prior to making any changes.
Some employers may eventually decide that things have gotten so financially stringent that they are compelled to reduce the size of their workforce and as a result need to make some staff redundant.
Before making any employees redundant it is important to first consider:
• whether there are any options for redeployment within the business or associated entities; and
Most employees (who have at least one year of service with the employer) will be entitled to receive a minimum redundancy payment in accordance with the Fair Work Act (a general exception applies to employers with fewer than 15 employees in most (but not all) industries).
The amount of redundancy pay employees are entitled to will be based upon their continuous service, as well as any terms in any applicable enterprise agreement or award.
It is possible for employers to ask the Fair Work Commission to reduce an amount that would otherwise be payable on redundancy if:
• the employer finds other acceptable employment for the employee; or
• the employer cannot afford the full redundancy amount.
If as an employer you are considering redundancy of 15 or more staff, you must also give written notice to the Department of Human Services of the proposed dismissals.
Before taking steps to make an employee redundant we strongly suggest getting advice on your specific circumstances as any redundancies are likely to be highly scrutinised, can be disputed and should be considered as a last resort.
The course of the COVID-19 outbreak remains very uncertain. However, it is highly foreseeable that the negative effects of a further spread of the virus both in Australia and globally will test the resilience of businesses generally.
Under the Biosecurity Act 2015 the government has a range of powers that could affect employers. The Attorney General has already suggested that these powers may be used widely if the situation in Australia deteriorates further. Relevantly for employers, under the Act, the Health Minister may direct a “person who is in a position to close premises, or prevent access to premises, to do so”. Meaning that the government could direct employers to close their workplaces or may restrict movement of people more generally which may force the closure of workplaces.
Breaching such a direction is an offence punishable by imprisonment for five years. As a result some businesses may be forced to close due to a government directive if COVID-19 takes a worsening course.
Business may also be forced to close due to a lack of stock or customers (if the community decide not to go to restaurants or shops, or are discouraged from unnecessary public gatherings or contact). This may include situations in which businesses are unable to trade due to essential supplies or stock becoming unavailable (for example medical and allied businesses that may require masks to safely work), due to particular risks or because stock and supplies have run out.
While the following section outlines the steps that may be taken under the Fair Work Act to implement a stand down, such a step is not without risk, so we strongly recommend prior to any decision by an employer to stand down (which is not as a result of a government direction) first consulting with staff to see if alternative arrangements can be made (e.g. a reduction in hours or days of work).
Under the Fair Work Act employers have the right to temporarily stand down employees without pay during a period in which the employees cannot be “usefully employed” because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.1 (The other circumstances are industrial action and breakdown of machinery or equipment).
Business shut down
“Usefully employed” means that the employment will result in a net benefit to the employer’s business by reason of the performance of the particular work done by the employee.
While the regulator, the Fair Work Ombudsman, states on its website that employers cannot stand down an employee “just because the business is quiet or there isn’t enough work”, (in our view) the COVID-19 outbreak could result in a situation that meets the requirements for stand down under the Act, for example where an entire department, office or operation is required to close due to quarantining of the workforce or the business’ customers or where directed to close by the government.
Employers may also be able to consider standing down employees where a business has been so severely impacted by import/export restrictions resulting from COVID-19, that there is no work at all available to employees.
There will be no right to stand down if there is useful work available for the employee to do which is within the terms of the employee’s contract of employment. It need not be work the employee normally carries out.
It is an essential part of stand down that the decision is a unilateral one of an employer to withhold work and payment even when employees are prepared to perform all duties.
Employees can be stood down for the period of time while the business is dealing with the issue AND employees cannot be usefully employed.
Situations where stand down does NOT apply:
• Where an employer refuses to pay an employee in response to the employee’s refusal to work (e.g. for safety reasons) in accordance with the contract of employment.
• If an enterprise agreement or contract of employment (rare) makes provision for stand down. In these circumstances the provisions in the agreement or contract will apply as opposed to the Fair Work Act. They may have different or extra rules about when an employer can stand down an employee without pay.
• An employee is taking authorised leave (paid or unpaid) or is otherwise authorised to be absent from their employment.
• If there is work available for some employees you cannot stand down all employees. Only those employees who cannot be usefully employed may be stood down.
In the event of a valid stand down under the Fair Work Act, an employer does not need to pay wages to stood down employees, but an employee accrues leave in the usual way (as though they have worked). Continuity is also not broken.