Preparing business for the potential impact of coronavirus

COVID-19 (better-known as Novel Coronavirus) raises important issues for businesses. While New Zealand has not yet had confirmed cases of the virus which originated in Wuhan China, the Ministry of Health has advised the likelihood of it eventually reaching our shores, and accordingly, businesses should be prepared. The primary consideration for employers will be keeping people safe and well. However, organisations also need to consider the impact of business interruption if a health crisis does arise.

Health and safety

The Health and Safety at Work Act 2015 requires that a person conducting business or undertaking (PCBU) ensures so far as reasonably practicable, the health and safety of workers. In doing so, employers must identify and manage hazards, take reasonable steps to eliminate hazards, or isolate them if elimination is not possible. Employees too, have an obligation to ensure their own health and safety, as far as reasonably practicable, and that their acts or omissions do not unreasonably affect the health and safety of others.

If a Coronavirus outbreak occurs, what reasonable steps an employer will be required to take, will vary depending on the nature of the workplace.

Travel

The Ministry of Foreign Affairs and Trade (MFAT) travel advisory for China is at its highest status, ‘Do not Travel’, therefore employers are wise to postpone work related travel to mainland China until MFAT advises otherwise.

There remains little certainty presently, about how the virus spreads. For those returning from travel in mainland China, the Ministry of Health has recommended that those displaying symptoms or who have been in contact with someone who has, should self-isolate themselves for 14 days. Any employer with an employee in those circumstances should discuss suitable arrangements during that period.

Remembering that employers have an obligation to take all reasonable steps to protect the health and safety of all employees, so far as reasonably practical, isolation of these employees, i.e. requiring the individual to remain away from work/work from home, is likely to be a sensible first step. All arrangements should be made following consultation with employees.

Leave

Those employees staying away from work may consider the use of sick leave, annual leave, paid special leave, leave without pay or a combination of the above. There is no obligation on employers to provide more leave than an employee’s statutory and contractual entitlement. There is also no ability for an employer to force an employee to take accrued sick or annual leave in the circumstances. Accordingly, while an instruction to isolate an employee from the workplace may be considered reasonable under the Health and Safety at Work Act, it may be fraught with regard to payment arrangements, and whether these can be deemed fair and reasonable in all the circumstances. There is an argument that requiring an employee to be off work (where remote working arrangements are not possible), may be a suspension, causing disadvantage to the employee. Whether or not this is justified, and/or whether payment is required during such a period, is open to challenge.

Information about Coronavirus

Where workers, who by virtue of the nature of their work may be required to have contact with other people, it is essential that employers put in place appropriate protection. The Ministry of Health has sound advice in relation to minimising the spread of any infectious disease in the workplace, in order to keep people safe and well: https://www.health.govt.nz/your-health/healthy-living/environmental-health/infectious-disease-prevention-and-control/workplace-infectious-disease-prevention Information can also be obtained from Healthline on: 0800 611 116. Employers should ensure employees are aware of this information, and reliable sources of accurate information, rather than any embellished account.

It will be important for employers to have monitoring protocols in place, regarding employees identified with potential risk, and how concerns may be escalated. A clear point of contact for employees will be critical.

Risk minimisation

Simple minimisation steps can be put in place. For example: keeping workplaces clean and ventilated; the provision of sanitisers; washing and drying hands regularly and well; and tissues and encouraging respiratory hygiene (covering coughs and sneezes) and safe food practices.

Force majeure

If a coronavirus outbreak arises, there may be the ability for employers to rely on “force majeure” clauses, which became more common after the Christchurch earthquakes. However, the enforceability of a force majeure clause is uncertain, and will depend on the specific circumstances.

The concept of a “force majeure” clause envisages an express term within an employment agreement to excuse or adjust the parties’ obligations, given a specified unforeseen event. Generally, this is an event beyond the control of the party, that could not have been prevented or planned for.

A pandemic viral outbreak may qualify as an unforeseen event. However, where an outbreak occurs over some time, with ebbs and flows in infection and morbidity rates, this may not necessarily bring a sudden and complete halt to business performance. This may differ to a statutory power being exercised requiring quarantine, which could restrain a business operation in its entirety.

Discrimination

Disappointingly, the outbreak of Coronavirus has led to cases of racist and xenophobic comments in the public arena. Discriminatory conduct may arise from a person (worker or client) who is treated differently (directly or indirectly) based on their nationality or religion. Employers need to have a zero tolerance towards such behaviour.

Business continuity / business interruption

Business continuity planning should not be limited solely to managing worker wellbeing. Consideration should include:

• How essential services or activities with high staff absence might be managed;
• What essential goods and services will be required, in the event supply may become limited;
• How alternative work practices can be implemented, i.e. reducing personal contact, restriction of movement – reducing travel, and increasing remote working capability;
• What services will be needed to support new working practice, i.e. IT support, provision of essential equipment;
• Whether alternative transportation may be required to enable ongoing work, if public transport is relied on by staff to get to/from work, and this becomes limited;
• What personal information might be required to implement remote working arrangements, and how will this be protected;
• Security arrangements for confidential information/intellectual property arising from remote working;
• Support offered to employees for any additional stress arising from the circumstances.
• Policies
• Businesses may have a pandemic plan in place, and in most cases, it will provide advice and guidance similar to those which employers planned for with similar scenarios in the past, i.e. swine flu, bird flu and measles. It is sensible to implement or review policies of this nature to ensure they remain fit for purpose. Circulating these to employees for their input, and to ensure they understand the way in which the business proposes to respond means that employees have certainty in the expectations of the business and its procedures, despite uncertain times.
• Advice
• Ultimately, employers are required to:
• take all reasonably practicable steps to provide a workplace where workers are safe and well; and
• make decisions that are fair and reasonable in all the circumstances.
• Employers are encouraged to reach sensible arrangements with employees where risk is presented. Our team at DTI Lawyers is available to assist with any issues, including questions arising, the drafting/use of business interruption/force majeure clauses and the drafting of appropriate policies.