Back to work the risks for business of returning employees to the workplace
- Political and Economic Risk Consulting
Back to work – the risks for business of returning employees to the workplace
As COVID-19-related restrictions are eased around the world, employees are slowly returning to their workplaces. We look at the regulatory, reputational and labour risks facing operators as their employees return in greater numbers to offices, factories and worksites.
- The easing of restrictions and the return of employees to workplaces raise the likelihood of new spikes in infection rates.
- Sectors that require workers to be physically present and that do not take adequate measures to protect them face heightened labour and legal risks.
- How businesses return to workplaces and how they mitigate the possibility of new infections will face high levels of scrutiny from employees, the public and possibly business partners.
- However, COVID-19 will also provide an opportunity for businesses to improve their reputational standing if they take actions that are seen to benefit both their employees and the common good.
On the frontline
Since the start of the pandemic, high rates of infection have been reported globally among healthcare employees in hospitals and care homes because of the close interaction between these workers and contagious patients. Large and high-profile outbreaks have also been reported among “essential workers” in other sectors – from oil and gas to manufacturing and transportation – as they have continued working at company premises or interacting with the public while other employees stayed at home during the most stringent lockdowns.
As governments continue to ease restrictions and coax employees out of self-isolation and back to workplaces, the health risks have not completely abated. In many countries, infection rates will likely rise again as business operations reboot. Health officials in France indicate that around a quarter of recent cases have been linked to workplace transmission. The need to return business operations to near normal while also protecting employees will expose more industries to heightened labour, legal, regulatory and reputational risks in the coming months.
Not all companies will be affected in the same way. Many businesses in the services sector, or that employ support staff in other sectors, will avoid some of these risks by keeping their employees – as much as is practicable – at home. Facebook in May announced that up to half of its employees could be working remotely in the next five-to-ten years. Other companies are likely to follow suit or take similar measures to allow remote working both during and after the pandemic.
Infection rates within other workplaces depend on several factors beyond the amount of general community transmission. The nature of the work and working conditions will define to what degree social distancing is possible. It has proven to be very difficult to maintain distancing in settings that rely on large numbers of workers in confined settings. Slaughterhouses and meat packaging plants and other food processing facilities have been linked to significant outbreaks in numerous countries in recent months. According to media reports on 13 August, almost 300 people tested positive for COVID-19 following an outbreak at a sandwich factory in Northampton (UK).
The challenges are even greater in workplaces that also house employees and where there is limited space to isolate those infected. Offshore oil platforms are a prime example. Mexico’s state-owned oil company PEMEX on 14 July reported that 202 employees and five contractors had died of COVID-19, the largest number of COVID-19 deaths reported by any company worldwide, according to Bloomberg.
Roles that involve interaction with customers, clients or the general public are also exposed to more social interactions that may enable transmission. Beyond healthcare workers, this applies particularly to employees in the hospitality, retail and transport sectors. The safety of these workers in part depends on the behaviour and compliance of the general public, something that corporate policies alone will not control. The media on 12 May reported that a railway employee in the UK capital London died of COVID-19 after being spat on by a member of the public several weeks earlier.
And let’s not forget the journey to work. Many employees rely on public transportation for their commute and may be expected to travel at peak times. Employees who are able to commute by driving, cycling or walking are likely to feel more comfortable returning to their workplace than those who have long journeys on busy buses, trains or subways.
Walkouts and legal claims
Since the start of the pandemic, employees have engaged in strikes and walkouts over health concerns. These have involved “essential workers” exposed to the greatest health risks. They have also involved “non-essential” workers in countries where governments were slower to impose restrictions on business activity or at organisations that were slow to mitigate the risks of workplace contagion. In the early months of the pandemic, these concerns were stoked further by global shortages of personal protective equipment (PPE).
Labour union activity is likely to rise again as governments continue to unpick restrictions. Sectors requiring workers’ physical presence will face the greatest threats of staff strikes and walkouts over health concerns. Labour action is even more likely in those countries where infection rates remain stubbornly high or are continuing to rise, or where they had fallen but are rebounding. The start of a new academic year in the northern hemisphere will provide a litmus test of employees’ willingness to return to workplaces. The return to school has already seen threats of strikes from teachers’ unions in the US.
Walkouts will be aimed primarily at pressing companies to mitigate the health risks, including through the provision of PPE. Others may also push for concessions, such as improved benefits, “hazard pay” (if workers believe that they are exposing themselves to undue health risks in their roles) or sick pay (if they would face unenviable choices between self-isolating and facing financial hardship versus going to work and potentially infecting others).
Should employees fall ill, claims that employers failed to protect them will represent emerging compliance and legal challenges. Claimants have filed high-profile lawsuits following the death or infection of employees, with some alleging corporate negligence or requesting injunctions to force business activity to cease. In France, an e-commerce business in April faced a legal challenge over duty of care by a French labour union, leading to a judgment forcing the company to restrict its business operations. To avoid risking a fine for violating the ruling, the company closed its French warehouses.
Government action and inaction
The likelihood of legal challenges regarding claims of insufficient measures to protect staff will remain high in the coming months. Some countries – particularly in Europe – have updated regulations by explicitly inserting requirements for companies to protect employees during the pandemic. Some measures have made businesses liable for the failure to do so.
Governments will also continue to update COVID-19-related restrictions, many of which place operational burdens on employers to mitigate the risks of the virus spreading on their premises. These will include requirements to adjust office layouts, provide PPE, or enforce mandatory mask wearing.
Although enforcement of new regulations by the authorities will vary from country to country, companies that do not comply with them will expose themselves to the risks of both legal challenges and labour action.
Despite these moves, governments face a difficult balancing act between getting businesses back to normal and preventing an increase in case numbers. The longer the economic pain lasts, some lawmakers will push back against what they see as burdensome new requirements on businesses. In the US, Senate Republicans have tabled legislation that would provide immunity for corporations from pandemic-related lawsuits. Several states including North Carolina, Oklahoma, Utah and Wyoming have already passed laws providing some form of liability protection.
Reputational risks (and rewards)
Regardless of national or local legislation, the actions of businesses – in particular, those of global corporations – will face high levels of public scrutiny in the coming months. Those that do not appear to be prioritising the health and safety of their employees in their reopening strategies will not only face challenges from employees, but also broader reputational risks with the public and other business partners.
International efforts to hold companies accountable for the social impacts of their commercial operations – including their supply chains – have grown in recent years. In this context, negligent company responses to the pandemic are likely to be seen as red flags for prospective business partners or suppliers. Meanwhile, for customer-facing operations, businesses may see customers publicly criticise perceived failings.
Businesses have a duty of care to their employees, but in a global pandemic the public is likely to scrutinise corporate actions even more if these actions are perceived to have a negative impact on the wider community. Organisations will be expected to play their part in minimising the threat of contagion given that chains of infection can expand beyond the workplace and into the wider community. On the other hand, businesses that demonstrate their commitment to protecting their employees and that treat suppressing the spread of COVID-19 as their civic duty also have an opportunity to burnish their reputations.
Legal and Compliance
Legal and Compliance