COVID-19 - Are you prepared?
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
COVID-19 is here and the situation is likely to get worse before getting better.
Retail outlets in Auckland CBD are reporting drops in sales of up to 90% and other businesses are impacted in different ways, such as travel and the supply chain. NZ is in the early stages and we can learn from lessons abroad. Effects on the economy aside, you cannot rule out the possibility that your business may be affected directly by the virus. This provides a compelling reason to brush up on your obligations and ensure that you are well prepared.
Keep up to date as the situation is changing rapidly. There is no shortage of good information online. Social media is clearly less reliable than trusted sources. These include the World Health Organisation (WHO), Ministry of Health (MoH), WorkSafe NZ and the Ministry of Business, Innovation and Employment (MBIE). Follow their guidance to protect us all and respond to issues as they arise.
Legal rights and duties
Health and Safety at Work Act (HSWA):
Business owners, managers and workers all have obligations under this Act to ensure their own health and safety and that of others in the workplace. The primary duty of care rests with the "person conducting a business or undertaking" (PCBU) who must ensure, "so far as is reasonably practicable, that the workplace...and anything arising from the workplace are without risks to the health and safety of any person".
To comply with this duty, it may be necessary to direct an employee to stay away from work or to shut down the workplace, depending on the circumstances.
The HSWA gives workers the right to cease or refuse to carry out work if they reasonably believe there is a risk, which is not remote, of exposing themselves or anyone else to a serious health and safety risk.
Workers must notify the PCBU as soon as practicable when this applies and they should work together in good faith to determine the best course of action.
The PCBU may direct a worker who has ceased work to carry out alternative work at the same or another workplace if that work is safe and appropriate, until the worker can resume normal duties. This applies to employees and contractors and alternative work means work that is within the scope of the employment contract. The PCBU may not direct that other work outside this scope must be carried out, but this can be achieved by agreement.
Failure to comply with this Act is a serious offence that can result in penalties of several hundreds of thousands of dollars for companies and other incorporated bodies, as well as individuals, who may also be imprisoned. Thinking ahead, it is unlikely that courts will be lenient with those it sees as having negligently contributed to the spread of a pandemic.
The Government is taking drastic measures to protect life and health and has made it clear that they expect us to do the same despite financial consequences.
Holidays Act:
This Act determines legal entitlement to paid sickleave. Consider the following four situations
1 A worker contracts the disease or is displaying symptoms:
Normal sick leave applies: Five days per year after six months of continuous service, if an employee or dependent is ill or injured, accumulating to 20 days unless more is offered in the employment agreement. Many employers may wish to be more generous with COVID-19 depending on the circumstances. If sick leave has been exhausted or doesn't apply, options include special leave (paid); unpaid leave; annual leave; leave in advance (sick or annual). In all cases, consult the employee in good faith and assess the possibility of working remotely in isolation. Remember that the legal entitlement to leave is a minimum which can be exceeded at any time by agreement, best made in writing.
2 There is no illness, but the MoH has asked the worker to self isolate:
Sick leave does not apply as there is no illness or injury. If the employee continues to work from home, normal pay will apply. Otherwise negotiate other options in good faith with your employee. See 1. above.
3 There is no illness, but the worker wishes to self isolate due to a possible exposure:
This is similar to 2. However, before negotiating pay, contact the Help Line to establish the risk and get advice. An at-risk worker may choose to come to work if staying away means losing income. Be aware that WorkSafe warns against providing a financial incentive to encourage an at-risk employee to come to work.
4 There is no illness, but the employer requires a worker to stay away in compliance with the PCBU's primary duty of care:
An employee who is ready, willing and able to work must normally be paid and provided with work if possible. An employer cannot require the employee to take sick leave. In these situations normal pay would apply.
Coronavirus: A Practical Response
The earlier you start planning for contingencies, the better prepared you are likely to be. The current risk of catching the disease is still low in New Zealand. Yet, who in Italy could have imagined a month ago that 60 million people would be advised by their government to stay at home?
Now is clearly the time to be looking very seriously at possible scenarios, documenting and testing your response. This applies to all businesses, from the sole proprietor who may need to self isolate to large corporates. Plans can and must be scaled to your size and formulated according to your reliance on particular individuals and teams and their ability to work remotely.
Adjust your attitude if you think that there is nothing that can be done, that you are too small to plan a response or that you won't be affected. Retailers may say that people can't work from home and leave it at that. But think of an airplane which is at highest risk of spreading the disease. It continues to operate using staff rotation, cleaning and bug sprays between flights. Any premises can be prepared for a day's work and lining up alternative staff, premises and ways of operating.
The focus at the moment is COVID-19, but having a viable contingency plan in place can save your business in any number of circumstances that can put "mission critical" people, premises, equipment or processes out of action. In 2010 FBA lost its office to fire. We were up and running and fully functional within a couple of days, and today all operational staff work from home. Here's what we recommend:
Start planning now if you have not already done so. Consider how your business may be affected if things get worse. What if a member of staff is affected? What if the workplace is exposed to the virus, so that all workers who have come into contact with the premises or each other are required to go into quarantine? How else may you be affected?
Ensure that you keep up to date with guidance provided by reliable sources mentioned above (MoH, WorkSafe...).
Assess the likely impact on your business of a general worsening in the economy.
Identify supply chain risks and tee up alternatives.
Prepare a communication strategy which involves keeping your staff informed, consulting on possible alternative ways of working, understanding their views, concerns, limitations and preferences to help you develop a contingency plan. Schedule regular updates that can become more frequent as warranted by the evolving situation.
Draft a policy and simple form requiring staff to declare (now and when circumstances change) any known risks including possible exposure, oncoming symptoms, relevant personal and family circumstances, such as travel plans.
Policies should address all behaviour that can help you to reduce risks in the workplace. It is not hard. Consider all issues in government advisories and raised here. Summarise all decisions in your policy.
Document your contingency plan that includes establishing alternative ways of running your business. Some businesses are dividing their workforce into teams and separating them now, so as to minimise the risk of everyone being affected at the same time.
Test your strategies. If necessary, have workers or teams operate remotely for a short period to confirm the feasibility and iron out any issues that could have a significant effect on your ability to function effectively.
Monitor the health of your workers and ensure that staff who are unwell stay home and that those required to self-isolate for 14 days do or have done so.
Offer free flu jabs to your staff. Scientist call the disease COVID-19 and the virus that spreads the disease, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). Deaths have occurred mostly amongst the elderly and those with other health issues, including other respiratory conditions.
Advice is to use ventilation rather than air conditioning, if possible. Otherwise, ensure that air-conditioning filters are clean and functioning effectively.
Review travel plans especially for those going to or from high risk countries. Cancel or postpone unnecessary travel where possible.
Review the adequacy of cleanliness and hygiene at your premises to comply with a safe and healthy workplace under the HSWA. All surfaces such as desks, computers, phones etc. should be wiped with disinfectant regularly and special attention given to communal areas (reception, bathrooms, lunchroom...).
Advise your cleaners of your requirements and standards in writing.
Same for employees. Familiarise yourself with MoH advice which may change as things develop. Keep your policies up to date and share these with staff. Be specific and include the basics.
SUMMARY
Take advantage of the current low-risk situation to prepare for a probable escalation. Stay up to date and use trusted online resources to help you develop your plan. This effort will not be wasted as it should stand you in good stead for any business disruption. Once you start, you will find that it is easier than you may think. Document what you can now. Then refine and update it as required.
Finally, things are changing fast. We'll update useful links on our website. If you need to report issues, seek assistance or advice, use the Health Helpline: 0800 358 5453, or for those with international SIMs: +64 9 358 5453.
Editor
The first and last thing that I will say about that in this article is this: There are many realistic scenarios that could pan out over the coming months, some much more positive than others, but if you prepare for the worst you will be well-placed to tackle whatever comes your way. Here goes…