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Information, agency guidance, and the potential response to COVID-19 is changing rapidly. The below reflects the position and related guidance as of March 12, 2020.
This communication constitutes the next installment of our Client Alert series considering the legal and business impacts of the 2019 Novel Coronavirus (“COVID-19”), commonly referred to as the “Coronavirus.” This communication focuses on those issues facing employers with respect to their non-U.S. operations. For issues involving other operations in the U.S., please contact Elena Baca.
In the last 24 hours, we have seen three significant new developments for employers throughout the world:
- First, the World Health Organization (“WHO”) has declared COVID-19 a pandemic, a disease that is spreading in multiple countries around the world at the same time rather than any indication of the aggressive nature of the disease itself. The impact of this declaration is that governments are now allowed to trigger preparedness plans and take emergency procedures to protect the public, such as travel restrictions;
- Second, effective March 13, 2020, the Indian government has suspended visas for visitors from all countries—regardless of their nationality or travel history—until April 15, 2020. Indian citizens returning home will be granted entry but will be subject to a 14-day quarantine period; and
- Third, the U.S. Government has announced a 30-day travel ban from 26 European countries for foreign nationals.
As we all continue to monitor these developments, we are seeing the spread of COVID-19 impacting employers in certain regions and jurisdictions at different rates. At this point, we know Asia, Italy and Iran are those most badly affected, but the speed of the contagion means that it is inevitable that others will follow. Employers are taking action now to devise their global strategies to protect their businesses and their workforce. Local laws vary, but there are common themes, challenges, and issues. Global employers are seeking to promote and protect the health, safety, and well-being of their workforce while navigating the myriad of applicable employment law, health, safety, and privacy legislation in local jurisdictions.
We recognize the value of local and up-to-date knowledge. Therefore, we have asked our colleagues and local counsel to provide their insights and commentary on a jurisdiction-by-jurisdiction basis. From this, we have identified the key points from a global perspective to assist employers to devise a coordinated and coherent COVID-19 policy for their workforce outside the U.S. After all, local realities impact global strategies.
The global perspective
Below we set out local insights for the People’s Republic of China, South Korea, Thailand, India, Australia, Brazil, France, Italy, and the UK.
The People’s Republic of China (“PRC”)
In December 2019, COVID-19 broke out in the PRC. In order to fight the outbreak, the State Council and domestic governments issued lots of emergency rules and regulations, including those regarding employment. For example, travel agencies, cinemas, theatres, entertainment places, restaurants, etc., were required to shut down. Many employees were not able to return to the big cities for work because of the lockdown or quarantine measures implemented in their hometowns. Companies were not allowed to resume their normal business after the Chinese New Year holiday to avoid the potential spread of the virus caused by returning employees, and those who did return were subject to 14 days’ home isolation before they could go back to work. On the other hand, the enterprises are required to continue to pay their employees their normal salary when the employees were unable to return to work due to the outbreak, which created a significant financial burden on employers and is likely to force employers to take measures to reduce their labor costs. Due to the impact on the economy, we now expect that many small to medium sized enterprises may go bankrupt or have to lay-off employees in the near future, which may cause a rise in employment disputes.
To assist, the PRC’s government has announced certain exemptions or reductions in social security payments to help enterprises in addition to tax cuts, low-interest loans, and other incentive measures. The total value of the cut to the social security payments is estimated to be worth RMB 650 billion, approximately 92 billion U.S. dollars.
It is reported today that Chinese officials claim that the COVID-19 has peaked in the PRC.
From January 2020, South Korean employers have been grappling with how to contain the outbreak of COVID-19. The two main statutes that cover infections in the workplace in South Korea Labor Standards Act (“LSA”) and the Infectious Disease Control and Prevention Act (″IDA″). The employer has an obligation to protect the safety of its employees. This includes the obligation to take measures to protect employees from sources of danger within the workplace and to ensure that employees can work in a safe environment. In particular, the Occupational Safety and Health Act (“OSHA”) requires employers to protect the health of employees by prohibiting or limiting from working any employee diagnosed with infectious diseases pursuant to a physician′s diagnosis. If an employee contracts COVID-19 in the workplace because of a failure to comply with the employer's obligation to protect employee safety and health, the employer may be held liable for civil or even criminal liabilities.
Useful guidance for employers can be found in the “Guideline on Measures in the Workplace to Prevent the Spread of Novel Coronavirus” published by the MOEL (updated to version 6 on February 24, 2020 (“MOEL Guideline”)). The MOEL Guideline outlines in detail measures recommended to prevent COVID-19 infections in the workplace and measures to take in the event infection is detected. In the event of a dispute, the authorities and the courts are likely to look to the MOEL Guideline as a benchmark to determine whether the employer has fulfilled its obligation to protect employee health and safety.
Response to suspected case or diagnosis in the workplace
Article 12(2) of the IDA requires an employer who identifies a person suspected of being infected to notify the public health center that has jurisdiction over that workplace. Accordingly, if the employer suspects that an employee is infected, but fails to report it to the relevant public health center and other employees or customers contract COVID-19, the employer may be liable. As the specific response measures are subject to change depending on the most recent developments, an employer should take legal advice before acting.
Obligation to pay
Article 41-2 of the IDA requires businesses that receive subsidies from the government to grant paid leave to employees for the duration of their hospitalization or quarantine. The government plans to provide businesses that have granted paid leave to quarantined employees according to IDA with subsidies, calculated on the basis of the daily wage per person (maximum KRW 130,000 per day). Businesses can apply for this subsidy through branches of the National Pension Service. If the employer receives a subsidy for paid leave from the government, the employer is obligated to grant paid leave to the relevant employee.
Employers do not have a legal obligation to grant paid leave to employees who are unable to work due to illness, unless it is required under the employer′s employment rules or any collective bargaining agreement with the labor union. However, as mentioned above, the MOEL Guideline does recommend that employers grant paid sick leave even in the absence of such requirement under other rules.
The MOEL Guideline states that an employer must pay employees it decides to temporarily suspend from work at its discretion. But, an employer is not obligated to do so if suspension is unavoidable, such as due to the government′s quarantine order. However, there is uncertainty regarding the former. As such, employers should review matters on a case-by-case basis, taking into account the relevant circumstances.
There are no specific Thai labor laws aimed at addressing how the employer should respond to a pandemic. As a precautionary measure and at the discretion of the employer, an employer may require its employees to work from home. However, in the case whereby an employee has, in fact, tested positive for COVID-19, then the days that the employee is unable to work will constitute “sick leave.” Under Thai labor laws, employees are entitled to sick leave, as long as they are actually sick. The employer must pay the normal wages for the employee for the sick leave period up to, but not exceeding 30 working days per year.
Several Indian States (Provinces) have invoked the Epidemic Diseases Act, 1897 (“ED Act”), rarely used colonial era legislation, to deal with the outbreak of COVID-19. As per the ED Act, any individual may be tested for any “epidemic disease” (COVID-19 has been designated as an epidemic for the purposes of the legislation) and, if the person is infected with such disease, is “segregated” and “kept in any hospital” (i.e., be quarantined).
Some State Governments have also commenced the process of contacting employers (especially in the IT/ITeS sector) and asking them to submit details of employees who have traveled to countries severely affected by the COVID-19 virus. Such employees (and their families), have been asked to undergo compulsory testing at government stipulated laboratories for the virus. State governments have also asked employers to permit “working from home” and provide paid leave to employees who need to be on self-imposed isolation. Many employers are complying with these requirements to avoid penal consequences of the contravention of the Act.
As stated above, India has announced that effective March 13, 2020; all visas for visitors from all countries are suspended.
In Australia, employers have a duty under work, health, and safety (“WHS”) laws to ensure, so far as reasonably practicable, that the health and safety of employees is not put at risk. Equally, employees have a duty under WHS law to ensure that they take reasonable care for their own health and safety, and that the health and safety of others is not adversely affected by their acts and/or omissions. As such, employers should take steps to require that their employees disclose any “At Risk Indicators:”
- if they are showing any COVID-19 symptoms;
- if they have had any close contact with an individual that has COVID-19; and
- if they have transited or traveled to a high-risk location during the past 14 days or after a certain date (being mainland China, Iran, Italy, and South Korea).
In some circumstances and depending on the nature of work performed by employees, it may be appropriate to direct employees to work from home. If such direction is given, employers have duties under WHS laws to ensure that the home office is safely set up for work.
In circumstances where working from home would be not be appropriate and an employer wishes to take precautionary steps to reduce the exposure of employees to COVID-19, there may be other mechanisms available under an applicable industrial instrument or contract of employment, such as to stand down employees if certain circumstances arise.
For permanent employees who have tested positive for COVID-19 or if an immediate family member or household member of such employee has tested positive for COVID-19, paid personal leave of up to 10 days is available under Australia’s national employment standards (“NES”).
For employees who have presented with an “At Risk Indicator,” but have not yet been tested for COVID-19, it is advisable that such employees do not attend the workplace until they are medically cleared for work. Until that time, employees would not be considered “unfit for work” and therefore they would not be entitled to receive paid personal (sick) leave under the NES. However, employers are providing paid special leave to employees in these circumstances and/or ensuring that staff are well-equipped to work flexibly from home while in isolation.
Employers may request their employees to work from home, provided that they have a home-office agreement or policy in place providing the conditions of such home-office. Employers may also request employees to either take a period of “individual” holiday or be placed on a “collective” holiday if the employer has informed the workers’ labor union 15 days beforehand. If an employee has symptoms of any illness or he is not fit to work, the employer must order them to take sick leave. In this scenario, the employer will pay their salary for the first 15 days and then will need to notify the Social Security authorities for medical pension coverage. In addition, it is advisable that the employer’s HSE[PH1] Department take measures and/or precautions to ensure the safety of the working environment.
The Italian government has issued a number of new decrees to deal with COVID-19. The latest are: (i) Decree of the President of the Council of Ministers (DPCM) 08/03/2020 (OJ General Series No. 59); (ii) Decree of the President of the Council of Ministers (DPCM) 09/03/2020 (OJ General Series No. 62); (iii) Decree of the President of the Council of Ministers (DPCM) 11/03/2020 (OJ General Series No. 64); and (iv) Law Decree No. 9 of 2 March 2020 “urgent measures to support families, workers and businesses affected by the COVID-19 epidemic.”
The above decrees contain a number of measures, including, the limitation of travel, recommendations for those suspected as having COVID-19 to voluntarily quarantine themselves, mandatory quarantine for those diagnosed, encouragement for employees to take holidays and leave, smart working, the closure of most shops, for professional and manufacturing activities it is recommended maximum use of smart working and suspension of activities other than essential for production, the closure of bars and restaurants and State funded measures and income support for workers in areas affected by COVID-19.
In light of all these measures, most Italian employers have already taken steps to put in place smart working, unilaterally requiring their employees to take holidays to the extent possible and otherwise encouraged them to do so. For those employees who contract COVID-19, the normal sick pay rules apply.
From the French government’s perspective, the COVID-19 pandemic is construed as a case of force majeure. Consequently, companies who entered into contracts with the French State will not be penalized if they are late in complying with their contractual obligations because of COVID-19. The French government has also implemented supportive measures. This includes the possibility to use short-time working (chômage partiel) if business continuity is not possible. In such a case, the employment agreements are suspended and employees are entitled to receive an allowance equal to 70% of their gross remuneration. Also, the possibility to request a longer payment period for tax and social contributions to the French Agency for the Recollection of Social Contributions (“URSSAF”).
French employers are also entitled to take the following measures before, during and after an infection issue in continuous cooperation with the works council and the occupational doctor:
- Updating of the Unique Risk Assessment Document (Document Unique d’Evaluation des Risques)—which lists all of the potential health and safety risks faced by a company in order to integrate the epidemic risks;
- Drafting of guidelines concerning employees’ hygiene and training of the workforce of the good practices, in case of epidemic;
- Possibility to restrain the use of public transportation by employees by proposing or subsidizing alternative transportation means;
- Monitoring the travel made by employees and prohibiting travel in risky areas;
- Limitation or prohibition of all business trips, physical meetings, events and restricting access to the premises;
- Adapting working conditions and working time organization to gain more flexibility depending on circumstances and/or to face increased workload as a result of quarantined employees;
- Proposing working from home to employees if this work organization is compatible with their job (employee’s consent required); and
- Given the exceptional circumstances, the employer is entitled to postpone the taking of paid vacation already fixed in order to cover a future 14-day quarantine period.
- A high-risk employee must be quarantined for 14 days: (i) working from home, if compatible with the job, can be imposed on the employee, or (ii) the employee is entitled to schedule an appointment with the regional public health agency, which can prescribe a 14-day sick leave. In such a case, the employee is released from working and benefits from the standard sickness allowances. If (i) or (ii) are not possible, the confined employee, albeit not working, must be paid by the employer (normal salary or, if possible, paid holiday indemnity);
- An infected employee diagnosed with COVID-19 I is in effect on sick leave and benefits from the standard sickness allowances; and
- For other employees, there are a number of possibilities: (i) impose working from home if compatible with employees’ jobs, even without the consent of employees, (ii) require employees to wear protective individual equipment, and (iii) use short-time working (chômage partiel).
This is against a backdrop of the following French obligations and rights. Pursuant to French law, an employer is subject to a reinforced best-endeavors obligation (obligation de moyen renforcée) regarding the prevention of the risks faced by employees. This means that any employer must be in a position to demonstrate that it takes all the necessary preventive measures to ensure the health and safety of employees in the workplace. Further, any employee has the right to leave his post if he considers in good faith that his health and safety is at risk in the workplace (Article L.4131-1 of the French Labor Code). The employee should not be penalized for exercising such right, by, for example, a deduction in salary. However, the employer can withhold pay if it considers that the employee is abusing the right.
At the current time, unless another employee at work is infected or the employer has not implemented any preventive measures, an employee cannot use their right to leave their post based on the fear of the COVID-19 alone.
The U.K. government has issued various guidance to help employers in dealing with COVID-19 available here: https://www.acas.org.uk/coronavirus, https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19, and https://www.gov.uk/foreign-travel-advice.
It has also announced a change to statutory sick pay (“SSP”) rules, in order to ensure that those who are sick receive pay from the first day of illness and discourage them from going to work for financial concerns. A significant proportion of U.K. employees are also entitled to contractual sick pay, which exceeds SSP. If an employee is not actually sick, then whether they are entitled to contractual sick pay, SSP or any type of paid leave will turn on the circumstances of the case. For example, if their employer requests that they stay away from work, it is likely that they are entitled to full normal pay. However, employees who do not wish to attend work because of the fear of contracting COVID-19 will not have a legal entitlement to pay unless they can show that they fall within a higher risk category due to an underlying health issue which impacts their health and safety.
The actual response by U.K. employers to COVID-19 continues to vary in large part due to the flexibility under U.K. government guidance for U.K. employers to assess their risk profile and response based upon various factors, including the recent travel profile of their workforce. The responses to date, range from the banning of all non-essential travel, to a complete travel ban, the postponement of all large-scale events and even client facing activities, to no external meetings, strength-testing working from home capabilities to enforced working from home, etc.
As of March 12, 2020, the U.K. government has issued new guidance which provides that anyone with a “new, continuous” cough or high temperature is advised to self-isolate for seven days, irrespective of their recent travel plans. This announcement will influence next steps for most U.K. employers who are now likely to step up measures reflecting this increased concern
The global strategy
In reviewing the local insights and commentary, it is evident that we can derive 10 common and recurring themes and issues that should feed into a global strategy.
- Ensure your COVID-19 preparedness task force spans the global footprint of your business and draws together the relevant stakeholders and specialists for a coordinated and coherent global response;
- Introduce and update policies and procedures for the workforce so they are clear on their employer’s approach to the key issues, such as travel, interactions, reporting of health concerns, attendance at the workplace, and pay. Be cognizant of the fact that these may need to change as the local position changes;
- Carry out and document risk assessments for those that are vulnerable or high-risk and implement the appropriate arrangements to comply with health and safety obligations;
- Revisit and test your emergency response plan on a jurisdiction-by-jurisdiction basis, so the local management is clear on the immediate action items, contact details, and appropriate global response as matters develop in the relevant time zone;
- Devise and circulate a response protocol and a communications pack to ensure consistent messaging across your workforce that can be adapted to local developments;
- Ensure that the members of your COVID-19 preparedness taskforce monitor and provide timely updates on the latest guidance and local developments in the relevant jurisdictions, including travel restrictions;
- Take the obvious steps to assist in containing the spread of COVID-19 which will vary by jurisdiction: postpone all non-essential travel (as can be seen from the latest developments in the last 24 hours—even essential travel is now unworkable for some jurisdictions), test your IT infrastructure and systems to assess the capability of your workforce to work remotely and take steps to mitigate any known fragilities, utilize technology as much as possible to get things done, limit interactions between the workforce, suppliers, customers, and clients, encourage social distancing generally, and adopt and reinforce all the known hygiene recommendations;
- Leverage local resources (HR, in house lawyers and externals) to understand your obligations to inform and consult with the workforce, any works council, labor union or notify any relevant governmental authority or ministry of labor in relation to proposed actions by the employer. Feed these back to the taskforce;
- Also, ascertain the statutory and contractual rights and restrictions for the workforce, in particular in relation to sick pay, paid leave of absences, health and safety obligations, ability to require employees to work from home, and privacy considerations relevant to your workforce in each jurisdiction; and
- Charge your finance function in determining if your business is eligible for any of the emergency measures being implemented by governments to off-set some of the financial impact of the pandemic.
With special thanks to following local employment counsel for their invaluable input and insights: Gordon Feng at JunHe, Robert Randolph Flemer of Kim & Chang, Suhas Srinivasiah at Kochhar & Co., Pimvimol Vipamaneerut at Tilleke & Gibbins, Rafael Filippis at Mattos Filho, Cilla Robinson at Clayton Utz, and Sharon Reilly at Reilly & Tesoro.
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