Legal update: Legal and Workplace Implications of Avian Influenza

Hong Kong has already experienced Severe Acute Respiratory Syndrome (SARS) during which there were 898 cases and 179 deaths. The insurance industry paid out over HK$105.28M in SARS related claims, the largest category of payments since Typhoon York struck in September 1999.

Many believe there is a threat of an outbreak of the more readily transmitted form H5N1 avian influenza (“avian flu”) in Hong Kong. This article seeks to highlight some of the issues and consequences that employers and employees may face in the context of the current legal framework.

Paid Sick Leave

Under the Employment Ordinance (“EO”) an employee is entitled to be absent and to be paid sickness allowance (at the rate of 4/5 salary) during a period of sickness providing that the following is satisfied:

• The sick leave is supported by an appropriate medical certificate;
• The sick leave is not less than 4 consecutive days if the employee is to be paid sickness allowance; and
• The employee has accumulated the number of paid sickness days taken for which sickness allowance is due.

An employee accumulates an entitlement to sickness allowance days as follows:-

• In the first year of employment an employee accrues 2 paid sickness allowance days for every month of employment.
• Thereafter the entitlement increases to accrue at 4 paid sickness allowance days for each month up to a maximum entitlement of 120 paid sickness allowance days.

Protection From Termination

If an employer terminates an employee’s employment during a day on which the employee is:

• absent from work through sickness and
• is entitled to be paid sickness allowance,

he commits a criminal offence under the EO punishable by a fine of “level 6” (currently $100,000). The employer is also liable under the EO for the sickness allowance the employee would have earned for the full period, pay in lieu of the notice period and an additional 7 days wages.

The Employer’s Safety Obligations

As noted the EO provides entitlement to sick leave. However, the EO does not deal with many other issues that would arise in the event of a sudden outbreak of avian flu. The general position under the Occupational Safety and Health Ordinance (“OSHO”) is that employers must ensure that a safe place of work is provided to all employees. Examples of the employer’s duty are:

• To provide information, instruction, training and supervision as may be necessary to ensure the safety and health of employees at work;
• To maintain the workplace in a condition that is safe and without risks to health where the workplace is under the employer’s control; and
• To provide or maintain a working environment for employees that is safe and without risks to health.

In addition to statutory duties under OSHO, employers owe a duty of care at common law to ensure safety in the work place.

Practical Steps

What then are employers required to do?

Employers have a common law and statutory duty to provide a safe place of work. Therefore, where there is a risk that employees will be exposed to an infectious disease, employers must take all reasonable steps to prevent this from happening. In order to do this employers should develop policies and procedures in order to discharge their duty of care to employees. The contents of such policies and procedures are to a large extent governed by the nature of the employer’s business operations. However, there are some common measures that employers should consider implementing to discharge their duty to employees. These include the following:

• Keeping employees fully up to date with the current situation of the virus, any major developments and the contingency plans which are being put in place at any particular stage. During SARS the World Health Organisation website was a useful source of information and currently includes a section on pandemic influenza. (See www.who.int/en.)
• Identify personnel who may have contact with people affected by the virus for example those who may have relatives in rural areas of China or other parts of Asia where there have already been outbreaks of avian flu or those working in higher risk industries such as in poultry farming and handling, or those living with healthcare workers,
• Require staff to report to the employer any symptoms associated with contracting of the disease;
• Prepare contingency plans to operate the office from an alternative location or, for example, from home if the employee’s work can be carried out remotely on a computer linked to the office computer server;
• Reduce the amount of business travel where possible, to limit the exposure risk to employees particularly those required to travel to areas which are known to be infected.
• Should an employer suspect or know that an employee may be infected then the employer should promptly request that the employee remains at home. In the case of suspected infection the employee should be requested to stay at home until the employee can confirm that he/she is not infected.
• Generally employees are required to comply with all of their employer’s reasonable directions as to the performance of their duties. As there is an implied obligation on the employer to take reasonable steps to protect employees’ health and safety, there is a corresponding obligation on employees to comply with directions which are for that purpose.

If a risk of avian flu being transmitted from person to person arises within the workplace and the steps being taken by the employer to reduce this are reasonable and proportionate the employees are obliged to comply with the employer’s directions. This may include implementating measures which the employer reasonably requires in order to protect the health and safety of all employees. Examples of steps (depending upon the level of risk and seriousness of the situation) include the steps mentioned above and also measures such as:-

• Directing employees to work from home either generally or in split shifts to minimse risks of infection of the whole workforce;
• Requiring employees to disclose situations which may cause a higher risk (travel to affected areas, contact with any known sufferers of the disease);
• If the risks increase and medical advice recommends such step, maybe even the compulsory wearing of face masks.

“Suspending the employment” during an outbreak

By the Employer

Unless there is an express provision in the contract permitting the temporary suspension of employment, the employer does not have a unilateral right to suspend employment or force employees to take unpaid leave. If the employer suspends the employee’s duties and their entitlement to payment of wages and other benefits, this would usually be a serious breach of contract entitling the employee to claim constructive dismissal. In that situation the employer would be liable for all amounts due – as if the employer had expressly terminated the employment without notice. This includes pay in lieu of notice, any long service pay/severance pay/terminal benefits, accrued holiday pay and a pro-rata of any fixed annual bonus.

Employers should therefore act carefully in seeking to impose any proposed reduction in benefits due to economic circumstances arising from an outbreak of avian flu and the temporary suspension/reduction in the employee’s duties. Employers should seek to agree any such suspension or period of unpaid leave.

By the Employee

Similarly employees do not have a unilateral right to withdraw their services and insist on remaining at home. If employees refuse to perform their duties without sufficient grounds then they will not be entitled to payment for those days of unauthorized absence and also run the risk of Summary Dismissal.

In some limited circumstances where there is a serious risk to the employee’s health and safety, an employee may legitimately decline to follow the employer’s directions. However this is only if doing so would unduly increase the level of risk to the employee’s health and safety to an unacceptable level. However, in general the employee would need to demonstrate a genuine and serious risk and not merely a perception or a slight increase. A recent example in the UK is the journalist who was found to have been unfairly dismissed for having refused to follow a direction to travel to Iraq.

In the absence of serious and genuine risks, employees should perform their duties and seek to liaise with their employers to agree reasonable arrangements for the minimization of any perceived risks.

Possible claims for compensation under the Employees’ Compensation Ordinance “ECO”

Employers should also be reminded that employees can claim compensation for work related diseases under the ECO. This provides that an employee will have the right to recover compensation in respect of the contraction of a disease if that amounts to a personal injury by accident arising out of and in the course of employment.

In handling such claims the Labour Department guidelines state that they will make an assessment whether the employee concerned has accidentally contracted the disease out of and in the course of employment. This assessment is made by reference to medical records, relevant information of the case and the provisions of the ECO. It seems unlikely that avian flu would fall within this category of claims, but it is a possibility where workers are involved in treating sufferers, in high risk industries or are required to work with known sufferers.

Employers should also be aware that under the ECO and OSHO avian flu arising out of and in the course of farming and handling poultry and poultry products is now a notifiable occupational disease. Accordingly if employers become aware of an employee contracting avian flu in those prescribed circumstances, they must notify the Department of Health.

Discrimination

Where it is confirmed that an employee has avian flu the employer must ensure so far as reasonably practical that other workers are not exposed to risk of contracting the disease. In this context the following would not be considered discriminatory where action was taken and where such act was reasonably necessary to protect public health:

• Complying with quarantine measures;
• Taking precautions against the spread of disease.

In addition under the Disability Discrimination Ordinance and Family Status Discrimination Ordinance it is lawful for an employer to ask an employee with infected family and relatives to stay at home and take paid leave.

However, it is likely to be discriminatory if an employer dismisses an employee merely because the employee had or is suspected to have a disease or an employee’s family member has or may have a disease.

Other Issues – Insurance

In the aftermath of SARS insurance claims were made by many businesses in Hong Kong. An example of this was Mandarin Oriental International which agreed a substantial settlement with its insurers for interruption to its hotel business. Following these payouts insurers are now more cautious in the scope of insurance coverage that they provide in respect of communicable diseases and business interruption.

Businesses should therefore carefully check their insurance policies to ensure that they are covered for situations where circumstances such as travel restrictions, quarantine measures, and cancellation of events may arise in the event of an avian flu epidemic. Event organizers are particularly at risk when seeking to insure against the financial effects of the outbreak of disease. Employers and businessmen generally should review their insurance cover carefully and consider if this is adequate.

For further information, please contact:
Kim Boreham
Partner | Email

Russell Bennett
Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.