Contracting COVID-19: How liable are employers for staff?

Respectful and consultative communication about COVID-19 is needed in the workplace in order to minimise potential OHS legal risks for employers, says UNSW Business School's Dr Sarah Gregson

The COVID-19 pandemic has had a dramatic impact on how society functions, with employers and the labour force experiencing unprecedented levels of change.

With increased levels of both unemployment and underemployment as a result of pandemic-related government restrictions, there is real desperation among employers and employees trying to get back to earning wages, says UNSW Business School Senior Lecturer in the School of Management Dr Sarah Gregson.

“This creates pressures to keep working when it might be inadvisable, and can potentially create a culture of under-reporting.” Dr Gregson says it is not surprising then that COVID-19 clusters have arisen in aged care facilities, security contracting firms and fast food where casual and insecure forms of work predominate.

Employers' legal options if employees contract COVID-19 in the workplace

There are two broad issues to be aware of, says Ms Danny King, an expert in employment and industrial relations law, Principal of Danny King Legal and formerly UNSW Law.

“Firstly, workers’ compensation, which is subject to legislation and a comprehensive insurance regime [and] secondly, the breach of common law duty of care," says Ms King.

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If found at fault then employers are liable for consequences such as employees' loss of income and medical expenses. Image: Shutterstock

Common law duty of care is a judge-made law that was developed into various categories, which impose an obligation on the employer to compensate an employee where they suffer because of their work. But Ms King also says there are very different rules and concepts that apply in each category:

  1. The risk of harm to an employee, should they contract COVID-19, is now most likely considered to be a “reasonably foreseeable” risk – which means that all employers should be taking precautions now to try to stop their staff contracting the illness;
  2. A risk assessment in each specific relationship should be conducted and steps should be identified to reduce the risk of infection – or other harm that could arise in the circumstances (such as emotional distress) arising from isolation;
  3. Where there are known cases of COVID-19, there are additional obligations on all members of the community to take proactive precautions. A failure to meet these obligations could become a matter for the police; and
  4. The communication of risk – such as a recorded infection for a staff member – is an essential part of managing the risk. A failure to do that will be, among other things, a breach of the duty of care to the staff and will expose the employer to a lot of additional risks.

In each case, Ms King says there will need to be an assessment of who is at fault for the contraction of the illness, which is not an easy task. If it is at the fault of the employer, then just like any other illness or injury, the employer (and its insurer) will potentially be liable for consequences such as the loss of income and medical expenses for the employee.

“However, employers should not rest easy on that account as we are yet to see the way law enforcement bodies will deal with those that cause the illness to spread in the community through their own negligence,” she says.

What if employers don’t allow staff to work from home?

For employers refusing to let staff work from home where this kind of working arrangement is possible, Ms King says they will find it challenging to be able to defend themselves against potential consequences if any employee contracts COVID-19.

"It’s each employer’s responsibility to exercise their duty of care as a person conducting a business or undertaking for employees, contractors and customers"

Dr Sarah Gregson, Senior Lecturer at UNSW Business School 

“This is irrespective of whether or not the contraction is able to be traced to the workplace itself,” Ms King says.

“The risk of exposure of any infected staff member within a workplace is very high, and as we have seen with the recent clusters, the spread happens very quickly indeed, leading to these risks.”

What if employees refuse to comply?

“Employees who do not want to follow the direction of their employer to work from home instead, run their own risk in their defiance,” says Ms King.

“Currently, the question is whether it is either reasonable or lawful to direct an employee to work in an office during a pandemic context like this, such as to trigger consequences where an employee refuses to comply.”

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Communication of risk is an essential part of managing risk and failure to do so is a breach of an employer's duty of care. Image: Shutterstock

Ms King says there will be several cases in the coming weeks and months which will examine where the line on this is, with litigation that challenges the basis of any consequence an employer might be responsible for.

“This will come in the form of unfair dismissal, general protections claims, breach of contract cases and even more collective-based disputes run through organisations such as unions,” says Ms King.

“My advice to employers now is to go gently.”

Respectful and consultative decisions are more likely to retain great talent – which will be desperately needed in any economic rebound – and this approach will also reduce the risk of litigation against employers.

How can employers return staff to work safely post-COVID-19?

“Firstly, it’s each employer’s responsibility to exercise their duty of care as a person conducting a business or undertaking (PCBU) for employees, contractors and customers,” says Dr Gregson, who explains that current OHS guidelines should be sufficient to deal with COVID-19.

But Dr Gregson says the usual limitations which apply in the workplace are present, where OHS initiatives are under-resourced, risk management procedures are underdeveloped or non-existent, representatives are insufficient in number and insufficiently trained – especially in small businesses where expertise may be limited.

“Employers need to set up work practices that allow proper social distancing, safe handling, regular screening, a thorough and appropriate cleaning regime, distribution and translation of the latest public health announcements to the workplace [and] proper consultation with the union and OHS representatives.”

Ms Danny King is an expert in employment and industrial relations law, Principal of Danny King Legal and formerly UNSW Law. For more information, please contact Sarah Gregson, Senior Lecturer in the School of Management at UNSW Business School.


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