Vanuatu Business Review » Employers’ Obligations in Case of Lockdown
Employers’ Obligations in Case of Lockdown
In 2021, the Vanuatu Chamber of Commerce obtained legal advice on COVID-19 employers rights and obligations relating to vaccination and a lockdown. It commissioned a report which was prepared by Lee-Anne Sackett and Didier Hamel-Landry. The following is an extract from this report.
Are employers obligated to keep staff employed during a lockdown and what payments are required?
There are currently no legal guidelines for this. Employers can terminate with notice, require employees to take annual leave or offer leave without pay. Ministerial orders are needed.
Under existing laws, employer have a duty to provide work in accordance with the period and number of working days in the contract. In other words, remuneration must be paid regardless of work being available as long as the employee remains in employment.
The only exception to this is if there is ‘an emergency’ which prevents the employer for doing so. Given the ongoing State of Emergency declared due to COVID-19, there is strong legal basis for this exception to be grounds for breaching the duty to provide work, particularly if a government-issued order requires businesses to shut down
There is no legal guidance in the Employment Act to determine what happens in the situation that the employer cannot provide work due to ‘an emergency which prevents him from doing so.
To address this, the following options are available:
1. The Minister makes regulations providing further details of what happens in this situation.
2. The employer can terminate the employee with notice, paying out all entitlements (outstanding salary or wages, annual leave and severance allowance) ‘as soon as the service has ceased. With this option, the employer will have no ongoing obligations towards the employee.
3. The employer can require that the employee takes annual leave, if the employee has annual leave accumulated.
If annual leave is not available, or if it runs out during the lockdown period, the employer and employee can agree for the employee to take leave without pay.
The employee will remain in continuous employment and continue to accumulate annual leave and severance allowances during this period. If the employee does not agree to take annual leave, the employer may give notice of termination and pay out all entitlements.
Employers are required to pay employees entitlements in priority over suppliers.
If an employee that has been in continuous employment for over six years resigns during this time, the employer is still obligated to pay all entitlements, including severance allowance.
4. It may also be possible for you to stand down your employees for the duration of the lockdown (as you are not able to provide work due to the emergency). It is not clear whether employee’s entitlements (e.g. annual leave and severance) continue to accumulate during this time.
As detailed in the subsection above, there are also no laws to address what happens to an employee’s entitlements if their employment conditions are changed or reduced.
For example, if the employee is able to do remote work but the hours of work reduced to below 4 days per week, this may no longer considered continuous employment but what payments are required to be made to the employee and when is not clear.
Employers’ obligations in relation to staff that cannot work due to becoming sick with COVID-19 or isolating
What sick leave is available to employees if they fall sick with COVID-19?
All employees in continuous employment are entitled to 21 days sick leave per year. Beyond the sick leave entitlements, the employee can cease to be employed if a medical practitioner certifies that the employee is unfit to continue to work. Ministerial orders are needed.
For employees to be entitled to sick leave, they must be in continuous employment for over three months (working four or more days per week) and provide a medical certificate if away for two or more days (in Port Vila and Luganville) or four or more days (outside of Port Vila and Luganville).
They are entitled to 21sick days leave each year and the employee is responsible for notifying the employer of their illness unless the employer is aware of the nature of the illness.
Medical certificates cannot be backdated beyond four days from the date of the examination, and employers can send an employee to a certified medical practitioner for a second opinion at the employer’s expense.
In situations where employees do not have sufficient sick leave, the employee may be considered (under current law) to be unfit to continue to work and the employee then ceases to be employed.
For this to apply, a medical practitioner under the Health Practitioners Act must certify the employee being unfit to work.
In this case, the employer would be required to pay out any outstanding wages or salary, annual leave and severance allowance.
This is unlikely to be a practical solution in the context of COVID-19.
An alternative option would be for the Minister to provide guidance in a regulation or order for this.
Possible wording has been provided in Section 5 below.
Employers still maintain the right to terminate the employee with notice, paying out all entitlements, or to require the employee take annual leave, if the employee has accumulated annual leave.
When can an employee return to work after testing positive to COVID-19?
There is currently no legal guidance around when an employee can return to work after having tested positive for COVID-19.
SOPs should be developed to reflect the guidance issued by the World Health Organization (WHO).
Under current law, employers’ duties to provide safe working conditions for his or her employees and a duty to ensure health, safety and welfare at work continue in this situation.
The responsibility falls on the employer to determine what measures need to be in place to ensure safe working conditions for both the employee returning to work and those that have remained in the workplace and the risks involved in early exposure.