Asia (Other)

On 30 January 2020, the World Health Organization (“WHO“) declared the Wuhan-sourced Novel Coronavirus (COVID-19) a “public health emergency of international concern” (“PHEIC“).

This is only the sixth PHEIC declared by the WHO since it was empowered to do so in 2005. The five previous PHEIC declarations arose from: two Ebola outbreaks in Africa, the Zika virus in Latin America; the reappearance of polio in Syria; and the global swine flu in 2009.

A PHEIC declaration gives the WHO a far stronger role in the global response, although its recommendations are not enforceable. Rather, the WHO can exercise strong influence on member states to respond to their coordination efforts and related recommendations, including resources for response initiatives, travel advisories, border closures, etc.

Mr. Tedros Adhanom Ghebreyesus, the WHO Director-General, has commented that “our greatest concern is the potential for the virus to spread to countries with weaker health systems and which are ill-prepared to deal with it”.

As of February 26, 2020, COVID-19 has infected more than 81,000 people and taken over 2,700 lives across the globe.

Simon McConnell

Simon McConnell

The evolving outbreak presents unique employment issues for businesses. This article sheds light on these legal and practical issues in each of the mainland China, Hong Kong and the Middle East contexts.

Government Responses in the PRC, Hong Kong and the Middle East

In a bid to contain the spread of COVID-19, mainland China extended the Chinese New Year holidays (“CNY Holidays“), which were scheduled to end on 30 January, up till 2 February, with most regional governments further extending the return of work until 10 February. China is resuming economic activities: Factories in Yangtze River Delta have expedited the daily operation, but some factories in Hubei Province are still on shutdown until permissions from the relevant authorities can be obtained.

In Hong Kong, Government employees are generally permitted to work from home from 29 January up till 1 March, and the private sector has largely followed suit.

Similarly, the Middle East has also put in place a number of preventive measures; for example, the Dubai Health Authority has confirmed that suspected cases of COVID-19 must be treated as an emergency case and insurers must not therefore refuse coverage and treatment must be provided free of charge where there is no insurance in place. Various immigration restrictions have been put in place across the region, with many countries extending the scope of the restriction as more becomes known about COVID-19.

 

The PRC Context

Nicholas Lum

Nicholas Lum

Employers are obligated to extend the CNY Holidays 

Given that the purpose for the extension of the CNY Holidays (as required by the State Council of the PRC) is to contain and control the spread of the virus, employers are obligated to comply with this accordingly. Employers who do not do so may face grave consequences pursuant to Articles 64 and 66 – 68 of the Emergency Response Law of the PRC (“《中华人民共和国突发事件应对法》”), which was promulgated in 2007.

Salary during the extended CNY Holidays 

As mentioned above, employers have an obligation to extend the CNY Holidays in line with the requirement of the State Council of the PRC and accordingly, they shall pay the relevant salaries to their employees based on their employment contracts. If employees had applied for annual leave during this extended period of time, they are entitled to withdraw their leave application.

For those employees who are unable to take leave due to epidemic prevention and control, employers should arrange for days off-in-lieu as set out in the Announcement of the State Council of the PRC. However, how shall one treat / compensate employees who work during the extended CNY Holidays and yet are unable to utilize the days off-in-lieu? This will depend on whether the extended period for the CNY Holidays is considered as “statutory holidays” or as “days off-in-lieu”.

  1. Whilst neither the State Council of the PRC nor the Ministry of Human Resources and Social Security of the PRC (“MOHRSS”) has expressed whether the extended CNY Holidays constitute statutory holidays or days off-in-lieu, the Bureau of Human Resources and Social Security of Wuxi (“Wuxi HRSS”) had issued a Notice on 28 January 2020 which may be informative in this regard. The Notice explained that employees unable to take leave during the extended CNY Holidays nor take days off-in-lieu should be paid at a rate of 200% of their regular salaries.
  2. In addition, pursuant to Article 2.2 of the Regulation on Public Holiday for National Annual Festivals and Memorial Days (“《全国年节及纪念日放假办法》”, promulgated in 2013)the 1st – 3rddays of the first month of the lunar year are statutory holidays. On this basis, we may reach the conclusion that any statutory holiday shall be so stipulated under the relevant laws and regulations.
  3. In the circumstances, and on balance, it may be viewed that the extended CNY Holidays do not constitute statutory holidays and employees who work during this period but cannot take day off-in-lieu should be entitled to 200% of their regular wages in accordance with Article 44.2 of the PRC Labor Law (“《中华人民共和国劳动法》”, amended in 2018).

Employers should suspend work as required by the local government

Victor Yang

Victor Yang

In addition to the announcement of the State Council of the PRC, the local governments of Shanghai, Guangdong Province, Zhejiang province and other cities (such as Nanjing, Suzhou, Wuxi and so on) have issued Notices to suspend work until 8 February 2020 or 9 February 2020. Save for those deemed indispensable industries such as water, gas, power supply etc., no company shall start work before the suspension period.

Some municipal governments, such as Shanghai and Nanjing, further demand that employers who intend to start to work “for specific reasons” should file a report to the local epidemic prevention and control offices and that work can only be commenced after approval is granted.

Pursuant to Article 42.2 of the Laws of the PRC on the Prevention and Control of Infectious Diseases (“《中华人民共和国传染病防治法》”, amended in 2013), in the event of an outbreak of an infectious disease, the local government may suspend the work, business and school classes when necessary, subject to reporting to and decision by the government at a higher level. In this regard, to control the further spread of the infectious disease, employers also have an obligation to suspend the work as required by local governments.

Salary during the suspension of work

According to a Notice issued by the MOHRSS dated 24 January 2020, employers shall pay employees salaries as agreed in their employment contracts if the suspension of work does not exceed a payment cycle. However, the amount for employees who work during the suspension period differs from region to region.

According to the Shanghai Municipal Human Resources and Social Security Bureau (“Shanghai HRSS”), the suspension of work shall be regarded as “days off”. If employees work during this period of time, they are entitled to take deferred days off-in-lieu or 200% of their regular salaries in lieu of. It is also noteworthy that while the Wuxi HRSS stated in the recent Notice that employers should pay regular salaries to employees for work during the suspension period, they are at the same time encouraged to give additional rewards to employees who work during this period.

Salary for the employees in quarantine 

According to the Notice issued by the MOHRSS on 24 January 2020, employers shall pay regular salaries to the employees during the period of quarantine or medical observation period caused by COVID-19.

In addition, employers are not allowed to terminate, during this period of time, the employment contracts pursuant to Articles 40 and 41 of the PRC Labor Contract Law (“《中华人民共和国劳动合同法》”). Further, if an employment contract expires during the quarantine, treatment or medical observation period, its term should be extended accordingly.

Salary for the employees infected by COVID-19

Based on the Notices issued by local governments recently and in line with the relevant laws and regulations, we are of the preliminary view that employees who are infected by COVID-19 and receiving medical treatment are entitled to salaries in accordance with the Provisions on medical treatment period of sick or non-work related injuries of employees (“《企业职工患病或非因工负伤医疗期规定》”) and relevant local regulations.

Final remarks on Mainland China’s part

Employers are obligated to extend the CNY Holidays and further suspend the work in line with the requirements of local governments.

If employees are required to work during the extended CNY Holidays, employees should arrange for deferred days off-in-lieu or pay 200% of the regular salaries in lieu.

For those employees who work in Shanghai during the extended CNY Holidays, the relevant directions from the Shanghai HRSS shall be of guidance. For employees working in other regions in mainland China, they shall likewise refer to the relevant Notices issued by the local governments.

The Hong Kong Context

Gloria Jones

Gloria Jones

General Legal Framework

The following legislation map out the relevant legal framework in the present context:

  • The Employment Ordinance (Cap. 57) (“EO“)
  • The Occupational Safety and Health Ordinance (Cap. 509) (“OSHO“);
  • The Employees’ Compensation Ordinance (Cap. 282) (“ECO“);
  • The Disability Discrimination Ordinance (Cap. 487) (“DDO“);
  • The Family Status Discrimination Ordinance (Cap. 527) (“FSDO“); and
  • The Personal Data (Privacy) Ordinance (Cap. 486) (“PDPO“).

Employers’ Duties

Employers are under both statutory and common law duties to provide a safe place of work, so as to ensure the safety and health of employees at work.

This naturally depends upon the type, location and context of work; but for office workers, at present, this is largely being addressed by WFH arrangements. However, some staff are deciding to work from their offices, so it is important for employers to create a plan to address relevant risks. This may partly be satisfied by activating parts of the Business Continuity Plan – particularly regarding remote IT access and operations.

It will also require employers to follow health advice from regulators and government departments, having disinfected work environments, supplying staff with protection, including medical masks, alcohol and soap-based sanitizers, wipes, etc.

If there is an actual infected member of staff (or staff affected by family infection), far more stringent (and even draconian) steps will be needed to safeguard all employees.

Further, employers are under both statutory and contractual duties to ensure timely payment of wages, even during periods when the employees are working from home.

Employers are also reminded that they should continue to comply with the terms of the contract of employment even during an outbreak.

Sick Leave Policy

Employees employed under a continuous contract are entitled to sickness allowance if the following conditions are met:

  • They take four or more consecutive sickness days;
  • The sick leave is supported by an appropriate medical certificate; and
  • They have accumulated sufficient number of paid sickness days.

Generally, the daily rate of sickness allowance is a sum equivalent to four-fifths of the average daily wages earned by the employee in the 12-month period preceding the sickness day.

The following points are worthy of note:

  • The sick leave will only qualify as a paid sickness day if the employees themselves are sick, but not if they are required to take time off to care for a family member who is sick;
  • An employer is prohibited from terminating the contract of employment of employees on their paid sickness day, except in cases of summary dismissal due to the employees’ serious misconduct. Otherwise, on top of paying the statutory compensation to the dismissed employee, the employer will also be liable to prosecution and a fine at level 6 (currently HK$100,000); and
  • An employer is not required to pay sickness allowance where the employee’s unfitness for work is on account of any injury or occupational disease in respect of which compensation is payable in accordance with the ECO.

Discrimination

The infection / suspected infection of COVID-19 falls within the meaning of “disability” under the DDO.

Employers are faced with the challenge of delicately balancing two competing interests, including the provision of a safe workplace, and the non-violation of discrimination laws in place.

The following measures will likely be considered discriminatory and unlawful under the DDO and the FSDO:

  • To dismiss employees solely because they have been / are suspected of being infected; and
  • To refuse to arrange interview / hire candidates because they have been / are suspected of being infected, for example because they come from Wuhan.

The following measures will unlikely be considered discriminatory and unlawful under the DDO and the FSDO:

  • To require employees who have recently travelled to / from the infected regions to work from home;
  • To require employees who have been in contact with those who have travelled to / from the infected regions to work from home.

Privacy 

The medical history of employees is personal data under the PDPO. Employers are required to take all practicable steps to protect personal data against unauthorized access, which generally means the identity of infected employees should not be disclosed. But this has to be balanced against the employer’s duty to provide a safe place of work. It is advisable for employers to obtain the consent from any employee concerned before they disclose the names of infected employees.

At times of a widespread outbreak, employers may wish to conduct their own medical scanning / tests on employees / anyone who enters the office premises, or make enquiries with the employees as to their medical health, as part of their overriding objective to ensure the safety and health of persons in the workplace. Employers must be mindful of the privacy implications of such practice, and ensure that the types of medical information collected and the manner of collection are commensurate with the degree of harm faced.

In any event, employers are advised to ensure that employees are informed of whether it is obligatory for them to undergo such tests / answer such questions and the consequences should they fail to comply.

Work Refusals

Employers may face the situation where employees are reluctant to go to work because they fear for their personal safety / health.

Employees who fear for their personal safety may take annual leave with the employer’s consent. Once their annual leave is used up, they may consider discussing with the employer about the possibility of taking additional, unpaid leave. Whether or not the employer will accede to such a request is a commercial decision.

Employees may however run the risk of being dismissed with or without notice if they persistently refuse to return to the office / willfully disobey a lawful and reasonable order respectively. That may prompt an analysis as to whether the employer’s requirement to return to work is a reasonable one.

Alternatively, in the event that employees reasonably fear physical danger by disease which was outside the contemplation of their employment contract, they can opt to terminate their employment contract under section 10(a) of the EO. They are not required to provide notice / make payment in lieu under such circumstance.

Whether or not they can terminate their contract of employment under section 10(a) of the EO has to be determined against what was expressly / impliedly contemplated in their contract of employment. It may be easier for an office clerk to invoke the termination mechanism under section 10(a) of the EO, than it is for medical staff in private hospitals, for example.

Employees’ Compensation under the ECO 

The ECO imposes liability on the employer to pay compensation if in any employment, personal injury by accident arising out of and in the course of the employment is caused to an employee.

Employees who contract COVID-19 have to bear in mind the following if they would like to claim under the ECO:

  • They must show that the injury was by “accident” arising out of and in the course of employment;
  • There must be a causal connection between the accident and the injury; and
  • The “accident” must be distinct from the “injury”.

Final remarks on Hong Kong’s part

The growing epidemic is and will put great strain on many businesses. Businesses are reminded to ensure compliance with the relevant laws for each of their employees when formulating measures to create a safe work environment, but also one in which the business continues to operate successfully.

 

The Middle East Context

Rebecca Ford

Rebecca Ford

Should I be issuing formal communications to my employees regarding COVID-19?

While there is no legal obligation to issue a communication to employees regarding COVID-19, employers may wish to do so, particularly if employees are raising queries in this regard.

A balance does however need to be struck between seeking to inform and protect the workforce without creating undue panic.

From an employer’s perspective, it is important that employees promptly report any suspected contact with someone with COVID-19 so that precautionary measures can be taken.

Employees may be reluctant to make such reports if they believe it may have an impact on their work, pay, employment etc. Employers should therefore consider providing employees with some assurances in this regard.

Employees can be directed to consult the WHO website for up to date information regarding COVID-19, symptoms and preventative measures.

Employers should consider issuing travel guidelines to employees in relation to both work related and personal travel. Work related travel to infected areas should ideally be avoided; where such travel is necessary, protective measures should be put in place. While employers cannot prevent employees from personal travel to infected areas, it may be prudent to require advance notification to the employer so that precautionary measures can be taken.

Can I require an employee to remain away from the workplace if, for example, they may have come into contact with someone with COVID-19?

Local labour law and an employee’s contractual terms should be consulted to check whether the employer has the right to require the employee to take annual leave on certain dates. If so, and assuming the employee has sufficient annual leave balance, this right could be availed.

Samantha Ellaby

Samantha Ellaby

Alternatively, employees could potentially be required to work from home. There are however strict immigration laws in the Middle East which, in some cases, only permit working from an employer’s premises. Working from home also carries its own legal issues; for example, an injury suffered by an employee while working from home could potentially amount to a workplace injury in some jurisdictions.

What should I do if it is suspected / confirmed that one of my employees has COVID-19?

An immediate priority will be to contain the spread of the virus amongst the workforce. Prompt action will be critical and, with this in mind, we strongly encourage all employers to consider an emergency response procedure so that management have a clear action plan.

Critical aspects of the emergency response procedure will include promptly ascertaining who the employee may have come into contact with and, potentially, requiring such employees to remain away from the workplace (on leave or working from home) until it is confirmed that they have not contracted the virus.

Prompt communications, internally and potentially externally, may also be required and must be sensitively drafted with due regard to the balance between ensuring individuals are notified if they may have been exposed to the virus, while at the same time protecting the privacy and data of the employee involved and with due regard to local data protection legislation and /or laws protecting an individual’s privacy.

The employee should of course be granted sick leave in accordance with local law requirements and their employment contract.

Steps should be taken to promptly ascertain who else the employee may have come into contact with.

What if an employee’s family member has COVID-19?

The statutory right to sick leave does not apply where an employee’s relative is sick; an employee is not therefore statutorily entitled to take sick leave to care for a relative. Local legislation and internal company policies should be checked to confirm whether any other leave applies, such as emergency leave, for example.

Employers should, in any event, consider requiring employees to take time away from the workplace (working from home or mandatory leave) to prevent the spread of the virus (noting the potential legal issues in this regard highlighted elsewhere in this article).

What if an employee is unwilling to attend work for fear of infection?

There is no statutory right for an employee to take leave or remain absent from the workplace in these circumstances. In many jurisdictions, unauthorised absence without legitimate excuse would provide a basis for termination of employment.

Employers could however consider allowing employees to take annual leave or permitting employees to work from home (again, noting there may be local immigration restrictions on doing so).

Can I require an employee to attend a medical examination and /or review their medical records to check their current status?

Local legislation would need to be consulted. Some jurisdictions in the Middle East have dedicated data protection laws which would limit an employer’s ability to access an employee’s medical records without consent. Privacy is, in any event, a right which tends to be closely protected by legislation across the Middle East and it would generally be necessary to obtain an employee’s express written consent before accessing their medical records.

Final remarks on the Middle East part

Ultimately, it is important that employers strike the correct balance between protecting its workforce and business while at the same time preventing undue panic.

The key takeaways should be the importance of ensuring that:

  • employees promptly report to the employer any suspected contact with someone who has, or may have, COVID-19; and
  • management are sufficiently prepared to deal with such a report and, importantly, to minimise the spread of the virus (as well as the spread of undue panic).

Employers who have questions arising from COVID-19 which are not addressed in this article may contact us.

 

Clyde&Co_Covid-19_Hub

For more information and insights, please visit the Clyde & Co Coronavirus Information Hub

Authors:

Simon McConnell, Managing Partner, Hong Kong
E:  simon.mcconnell@clydeco.com

Gloria Jones, Partner, Hong Kong
E: Gloria.jones@clydeco.com

Nicholas Lum, Partner, Shanghai:
E: nicholas.lum@clydeco.com

Victor Yang, Senior Consultant, Shanghai
E: victor.yang@clydeco.com

Rebecca Ford, Partner, Dubai
E: rebecca.ford@clydeco.com

Samantha Ellaby, Senior Associate, Dubai
E: samantha.ellaby@clydeco.com

https://www.clydeco.com/

Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co.

© Clyde & Co 2020

 

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