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Natural Disasters: Navigating Business Closures and Employee Leave Entitlements
Australia is exposed to a unique range of natural disasters that can occur year-round including droughts, floods, earthquakes, tropical cyclones and bushfires. Natural disasters can have a devastating impact on businesses and often require that employers make immediate decisions about business operations and employee entitlements.
While there are no special provisions for natural disasters in the Fair Work Act 2009 (the “FW Act”), the existing provisions of the FW Act adequately set out how businesses can navigate business closures and employee leave entitlements in the event of a natural disaster.
Employers will also need to consider the terms of any applicable modern award, enterprise agreement or contract of employment which may contains provisions relating to natural disasters, business closures and employee leave entitlements.
What to do if your business must close?
Natural disasters may prevent employers from opening their business temporarily due to logistical and safety reasons. Under the FW Act, an employer may stand down an employee for a period in which:
- the employee cannot usefully be employed due to the stoppage of work; and
- the employer cannot reasonably be held responsible for the stoppage.
Natural disasters such as floods and bushfires are outside of an employer’s control and, accordingly, an employer may stand down an employee if they must close their business as the result of such an event.
Employers are not obliged to pay employees during a stand down period. However, there are several options employers may consider as an alternative before standing down an employee, including:
- inviting an employee to use accrued periods of paid leave such as annual leave and personal/carer’s leave;
- if an employer has multiple places of work, redeploying an employee to another site if it is reasonably practical to do so; and
- implementing flexible working arrangements such as working from home.
Employee leave entitlements
Leave entitlements under the National Employment Standards (the “NES”) in the FW Act are available to ensure employees can take time off, including to care for themselves and family. In the aftermath of a natural disaster employees may seek to access their leave entitlements. Under the NES these entitlements include:
- Annual leave: 20 days of paid annual leave per year.
- Personal/Carer’s leave (paid): 10 days of paid personal/carer’s leave per year if an employee needs to provide care and support to an immediate family or household member.
- Personal/Carer’s leave (unpaid): if an employee has no accrued sick/carer’s leave, they may be entitled to two days’ unpaid leave to provide care and support to an immediate family or household member.
- Compassionate leave (unpaid): two days of compassionate leave per occasion in the event of a death or life-threatening illness suffered by a member of an employees’ immediate family or household.
Unpaid personal/carer’s leave and unpaid compassionate leave are also available to casual employees.
In accordance with the NES employees are required to notify their employer as soon as possible when they take sick/carer’s leave or compassionate leave. An employee may also be required to give evidence to their employer supporting their reason for taking the leave.
Community service leave
In addition to the above leave entitlements, employees are also entitled to take community service leave to attend to emergency management activities if they are members of a recognised emergency management body. Examples of these bodies include state firefighting organisations or the State Emergency Services who are ordinarily involved in responding to natural disasters.
Community service leave is unpaid and is available to both permanent and casual employees. The amount of community service leave an employee is entitled to take is unspecified. Instead, the NES provides that an employee is entitled to time off to allow for:
- the time that the employee is engaged in the relevant activity;
- reasonable travel time associated with the activity; and
- reasonable rest time immediately following the activity.
Tips for employers
- Employers should review all applicable industrial instruments to determine the relevant obligations and entitlements when navigating business closures and employee leave entitlements.
- Employers may stand down employees in accordance with the NES if their business must close as the result of a natural disaster.
- Employees have various leave entitlements which can be taken following a natural disaster.
- Employees are entitled to take unpaid community service leave to assist with volunteer services if they are a member of a registered emergency management body.
Kirryn West James, Director
Other Relevant Resources
17 September 2019