Business Info, Uncategorised

Rights and Obligations for NSW Employers during Lockdown

By Paolo Coniglio, 25.07.2021

Restrictions for Employers during Lockdown

With the number of positive COVID-19 cases on the rise, the NSW Government has imposed a number of restrictions on business trading and the ability to work on-site and in offices.  These restrictions are currently in effect until midnight Friday 30 July 2021 for all Greater Sydney (including Central Coast, Blue Mountains, Wollongong and Shellharbour).

The current COVID restrictions affect both aspects of people’s personal and business life. This blog post focuses on the Business restrictions and the options available to Employers based in New South Wales.

Current Working Restrictions

Authorised Workers

Workers are only allowed to leave their homes if they work for a Business currently allowed to open and if they are Authorised Workers. Authorised Workers who live in Greater Sydney, but work 50km or more outside Greater Sydney, are required to be tested for COVID-19 every 7 days. Please note that restriction and testing rules also vary depending on the different Councils. More information is available on the NSW Government website.

Professional Services Businesses

Businesses that provide Professional Services (i.e. Legal, Accounting etc) are required to allow their Employees to work from home if they are reasonably able to do so. Employers who do not allow their Employees to work from home could face penalties of up to $10,000. The NSW Government has provided specific guidelines for Employers and Employees to ensure work can be performed whilst maintain the Health & Safety of workers.

Retail Businesses

The only Retail Businesses allowed to trade during the COVID restrictions are those who provide essential products and services. All other Retail Businesses are required to close to the public.  All Employees working for essential Retail Businesses must wear a mask at all times whilst at work.

However, these businesses can still trade via e-commerce, provide ‘click and collect’ and home delivery services.

Hospitality Businesses

Hospitality Businesses are restricted to trade only via Takeaway, ‘click and collect’ and home delivery services. Employees who work in Hospitality Businesses must wear a mask at all times whilst at work.

Building & Construction Businesses

All Building & Construction projects located in the Lockdown areas must be suspended unless it is to carry out urgent or critical work.

The NSW Government has provided guidelines on Construction Work Rules on their website.

Building Maintenance & Cleaning Businesses

All Commercial and Residential maintenance, cleaning and renovation work is not allowed unless deemed as necessary for the safety and security of the site. The NSW Government has provided guidelines on Residential Services Rules on their website.

Construction Sites during covid

Employers Rights and obligations during Enforceable Government Directions

Employers dealing with Employees who are unable to work must ensure the way they manage their Employees during this time, is still in line with Fair Work regulations. Understanding Employment rights and obligations is fundamental to correctly manage difficult scenarios and ensure that issues of unfair dismissals are avoided.

Employers who are required to suspend trading due to an Enforceable Government Direction or mandatory self-isolation are not required to pay their Employees during this time. Available options are (in order of required priority):

  1. Working from Home Arrangements
    If the Employer is in the position to provide Working from Home arrangements and allow the Employee to continue to work, this option must be offered to the Employee. More information on Alternative Work Arrangements is available on the Fair Work website.
  2. Changes to Duties, Hours of Work and Rosters
    Employers should talk to their Employees about temporarily agreeing to change their duties, rosters or hours if this means the Employee can continue to work at least to a limited capacity. Employers must check the rules under their applicable Awards or Agreement as well as their Employment Agreement to clearly understand what flexible arrangements can be directed and what must be agreed by both parties. The Fair Work website has summarised some General Guidelines on applicable changes in working hours and duties. However, it is imperative for Employers to check their applicable Award.
  3. Directing Employees to take Annual Leave
    Employers may be able to direct their Employees to take Paid Annual Leave if their applicable Award has had a Flexibility Provision added since the start of the Pandemic in 2020. Employers should also be mindful that some of the Flexibility Provisions introduced during the first stage of the Pandemic in 2020 have expired and have not yet been re-introduced. Once again the Fair Work website has summarised some General Guidelines on the applicable changes to workplaces during the Coronavirus. However, once again, Employers should refer to their applicable Award. Employers are always encouraged to discuss the option for Employees to take Annual Leave if their applicable Award does not include the relevant provision.
  4. Directing/Agreeing to take Annual Leave at half rate
    If an Employee does not have enough Annual Leave accrual to cover the lockdown period, they can take advantage of another Flexibility Provision, updated in most of the Awards since 2020. This is the ability to take twice as much Annual Leave at half rate. Employers should check if their applicable Award has had this provision introduced. The Provision can be found at Schedule X – Additional Measures during the COVID-19 Pandemic.
  5. Directing/Agreeing to take Long Service Leave
    In April 2020 the NSW Long Service Leave Act 1955 introduced a temporary amendment to provide greater flexibility to both workers and Employers when accessing Long Service Leave entitlements. In this Amendment, Employers are able to provide less than 1-month notice to a worker to take Long Service Leave (providing the worker agrees). Furthermore, Employees are able to take Long Service in shorter blocks (days/hours) as opposed to in week blocks. Originally only introduced for a six month period, this flexibility provision has been extended and it is still valid now. Please note that there is a difference between the rights to take Long Service Leave as opposed to being paid unused leave as part of an Employment Termination. For an Employee to access Long Service Leave entitlements in NSW as paid leave, they must have completed 10 consecutive years of service (8.667 weeks) or 15 consecutive years (13 weeks). However, for an Employee to be eligible to receive a pro-rata payment of Unused Long Service Leave upon termination of employment, they must have completed a minimum of 5 consecutive years of service.
  6. Standing Down Employees
    Under section 524 of the Fair Work Act, an employer can stand down an Employee without pay where they can’t usefully be employed because of a stoppage of work for any cause for which the employer can’t reasonably be held responsible. Employers also need to consider any applicable Award, Enterprise Agreement, Employment Contract or Workplace Policy. These can have different or extra rules about when an employer can stand down an employee. For example, some Awards and Agreements include a requirement to notify or consult with staff before they can be stood down. Stood-down Employees are still considered employed by the business and do not reduce the Employee’s headcount for the Employer. However, this also ensures that these Employees maintain basic Employment Rights as part of the Fair Work National Employment Standards including:
    – accruing Annual and Personal Leave during their stand-down period;
    – being paid for any Public Holidays falling during such period;
    – the stand-down period being considered part of the continuous employment when calculating Notice Periods and access to Long Service Leave. Standing down Employees may affect the Employers eligibility to access other COVID-19 Support Schemes, such as the JobMaker scheme.If an Employer plans to stand down their Employees, the Stand-Down notification must be issued in writing. Fair Work has provided a template letter and checklist for Employers to use. More information on Employment Stand-Down is available on the Fair Work website.
  7. Employment Redundancy
    Employers may be able to make certain Employees redundant due to the Coronavirus Pandemic. As general guidelines, acceptable redundancy clauses may include: the Business closing down permanently or the long-term consequences of the Coronavirus would no longer make a specific role required. Whereas an unacceptable cause would be making an Employee redundant because they have tested positive to the Coronavirus or are required to isolate due to possible contamination risk, and are unable to work. If an Employer is ending the employment, their employee may be entitled to notice, redundancy pay (if the dismissal is a genuine redundancy) and other entitlements. Small Business Employers (employing less than 15 Employees) are encouraged to review the Redundancy conditions of their applicable Award and check if this Award includes a Small Business Redundancy provision, or not. More information on Employment Redundancy during Coronavirus is available on the Fair Work website. Please note that making Employee’s redundant may affect the Business eligibility to one or more NSW Support Options and Grants.
  8. Other Employment Dismissals
    If an Employee is on leave or has been stood down, the usual rules about dismissal still apply (for example, rules about unfair dismissal and redundancy). If an Employer dismisses an employee during a period of approved leave or stand-down, they need to give the Employee any required notice in writing.The then employer can:
    – let the employee stay employed through their notice period
    – pay the notice period out to them (also known as pay in lieu of notice), or
    – give a combination of the two.If the employer lets the employee stay employed through their notice period, the notice period can run at the same time as a period of stand down. Employment ends either at the end of the notice period or on the date that payment in lieu of notice is made, whichever is earlier. It can’t end on a date earlier than the day the notice is given.

Coronavirus Stay Home

Granting the correct Leave

There is often confusion about what type of Leave an Employee is entitled to receive in different instances of them dealing with COVID-19. The section of this post includes a quick reference check to shed some light on the correct access to Leave entitlements.

  1. An Employee is asking for time off to have a COVID Test done
    Unless specifically directed by a Government authority (State or Council), the Employee is not entitled to apply for Personal Leave to take a COVID Test. They can however apply for Annual Leave or Unpaid Leave.
  2. Personal Leave during a mandatory shut-down
    Employees cannot apply for Personal Leave during an enforceable Government direction where they are required to stay home. Employers also cannot direct Employee to take and use their Employees’ Personal Leave entitlements under the same conditions.
  3. An Employee has been diagnosed with the Coronavirus
    The Employee must take Personal Leave (providing they have accrued entitlements available, if not unpaid leave) and the Employer is obligated to grant it even without the provision of a Medical Certificate.
  4. An Employee household member has been diagnosed with the Coronavirus
    The Employee can take Personal Leave to care for their household member. However, in the instance the Employee does not require to care for the household member (i.e. shared housing accommodations), the Employee would be required to isolate for a period of 14 days. In this case, the Employee may apply for alternative leave options directly through the Australian Government (these options are covered in a different blog post on our website). It is also important to clarify that if an Employee has been at risk to contract the Coronavirus, the Employer cannot direct them to come to work and put other workers at risk.
  5. An Employee is required to self-isolate due to a potential Coronavirus risk
    If an Employee is required to self-isolate for a period of 14 days, they are not entitled to request Personal Leave from their Employer. However, they can access alternative leave payments offered through the Australian Government (these options are covered in a different blog post on our website).
  6. Unexpected Emergencies
    If an Employee needs to provide care to a household member due to an unexpected emergency (such as a Childcare shutting down due to a potential outbreak risk), the Employee can apply for Personal Leave to deal with this emergency or agree with their Employer on other working arrangements (change of rostered hours/days or working from home).

More information on Personal and Carers Leave available during the COVID Pandemic is available on the Fair work website:

Emergency Situations

Health & Safety in the Workplace

During this difficult period, Employers are required more than ever to ensure their Employee’s Health & Safety at work, both physical and mental. Fair Work Australia and other Government entities have collated a number of Workplace and Safety Resources for Employers to implement in their workplace.


This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.

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