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Addressing the limitations of financial support for non-government employees during the Covid-19 pandemic

2nd March, 2022

This latest guest contribution on the Labour Law Down Under Blog is by Maria Hakim, Law/Medical Science Student at UTS. 

With COVID-19 as an unusual circumstance, legislative reform and government support are necessary to respond to changes brought by the pandemic, especially to reassess the current approach to dealing with national events placing workers at a financial disadvantage.

Employees in the COVID-19 pandemic are at high risk of exposure to coronavirus in their work environment. The current national response to a COVID-19 positive person or a person of close contact is isolation or quarantine.  Restrictions over the summer period from the end of 2021 to early 2022 have eased to respond to a shortage of staff after the Omicron outbreak and move forward under the National Plan to transition from the pre-vaccination state of affairs. However, isolation is still a requirement. As many employees who are required to isolate, such as healthcare workers, cannot work from home they are restricted to two choices of either a fixed government payment or forced to take their paid leave granted under the National Employment Standard (NES). It is currently only government workers in isolation that are paid wages without forced paid leave. If a non-government worker decides on government payments instead, the replacement for their wages is significantly less than the Australian average weekly earnings, as of the latest recording of weekly earnings from the ABS in May 2021. Furthermore, if workers choose government payments, but are eligible for paid leave, they are required to repay these benefits.  This positions employees at a disadvantage due to little flexibility in their repayment options, forced paid leave and significant loss of wages for the period of isolation.

Limitations of the NES and government payments during COVID-19

As per Part 2-2 of the Fair Work Act 2009, employees are entitled to the NES. The NES are 11 minimum terms and conditions of employment provided to all national workplace system employees in Australia. The NES include entitlements such as:

  • Hours of work
  • Annual leave
  • Annual leave at half pay
  • Sick leave
  • Long service leave (limited to employees that have worked with employers for a long time and varies according to state)

In regard to the COVID-19 pandemic, these entitlements extend to employees isolating or in quarantine due to enforced government direction. Once required to quarantine or self-isolate workers arrange with their employer to receive sick or annual leave. Alternatively, if employees choose unpaid leave, government payments are available. This includes the pandemic leave disaster payment and the COVID-19 hardship payment. Nevertheless, these benefits – specifically the pandemic leave disaster payment – are significantly limited not only in quantity but in eligibility. That is, employees must not be receiving any income, earnings or salary from paid work, income support payments, NES entitlements or relevant state test and isolate payments, such as in NSW and Victoria. Thus, if choosing government benefits, it is merely on loan if workers are eligible for income support. Subsequently, workers can essentially be forced by employers to take paid leave, even if they have not accumulated excess annual leave. However, if the employee does not qualify for any of the listed payments, they may receive a fixed but significantly lower sum from the time of government enforced directions to isolate. Casual workers are significantly affected with no coverage for most NES entitlements, specifically those which are leave-related. Therefore, sick or annual leave payments have not been an option for pandemic-caused isolation, forcing workers to rely on insufficient social security payments.

Can your employer legally force you to take annual leave?

Some employees are covered by modern awards, which are minimum entitlements additional to entitlements provided by the Fair Work Act and the NES. If your place of employment is covered by a modern award, it is likely that your employer has the right to direct you to take annual leave. This direction is granted under certain circumstances such as an annual close down or addressing excessive leave accumulation. If you are not covered by the Award your employer can still instruct you to take annual leave according to s 94 (5) of the Fair Work Act.  Section 94(5) of the Fair Work Act provides that:

An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.

Nevertheless, what is ‘reasonable’ is not fully defined , so there is no complete guide or limitation upon when an employer can direct workers to take annual leave. This gives employees minimal security and control over their paid leave, indicating the need for legislative reform in the Act.

Addressing the discrepancies

Increasing social security payments and including bonus payments

As previously mentioned, current government social security payments amount to less than the average Australian weekly wages. In response, the government can focus on increasing punitively low rates of existing social security payments to average worker wages. This should be consistently updated with the ABS recording of average weekly wages, as to allow workers to keep up with inflation and the rising Wage Price Index (WPI).

Moreover, the current government payments offered are limited regardless of the circumstances of the employee and do not cover all employees. If an employee was to miss out on bonuses such as commissions, public holiday rates or other additional payments to their wages, a public disaster payment is suggested to compensate employees accordingly. Considering isolation is an enforced government direction in response to a national emergency, it may be argued that it is the government’s responsibility to provide appropriate incentives or benefits that fairly remunerate employees according to their lost opportunity.

Reforming the NES

In order to grant workers control over their annual or sick leave another suggestion is legislative reform specific to the NES, under the Fair Work Act 2009. This would consist of an additional disaster leave entitlement. Given that several of the largest Australian companies have received millions of dollars’ worth of government benefits during the pandemic, these payments can be used to remunerate workers. The objective is that paid leave, per the NES reform, would provide entitlements proportionate to the earnings the worker would make if they were not in isolation.

Expanding on the 11 minimum NES entitlements to include paid leave – specific to COVID-19 isolation or an entitlement that covers workers at a time of national crisis – will ensure workers have the choice to preserve their paid leave at their discretion. This will not only accommodate for the current COVID-19 pandemic, but also pave the way to reform for employment security in other circumstances of national crisis impacting wages.


The pandemic has brought attention to the lack of security in employee wages and the need for the government to address the incoherence of existing worker support options. Addressing the rate of social security payments is necessary to update earnings to the standard of living and compensate workers per the larger population of average earning workers. Whether or not current social security payments are at a minimum rate to avoid overcompensating workers, it must be taken into account that isolating or quarantining is a government enforced direction. In addressing this issue, it is suggested that the first feasible step is to repay workers at the same average wage rate across the board and consider additional NES disaster entitlements in the future.

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