Practical Guidance for Employers During Covid-19

The Covid-19 Lockdown is a unique situation that continues to change rapidly and this raises a number of questions and concerns for people, especially in the employment space.  The situation surrounding Covid-19 requires flexibility from both employers and employees.

Where changes to current working arrangements are proposed by an employer, there are specific good faith requirements that must be followed.  Employers and employees may be considering changes that involve workplaces closing temporarily, reductions in hours, and working from home.  These changes import additional good faith obligations and, typically, mutual engagement by both the employer and the employee in an appropriate process to discuss the implications of these changes before they are implemented.

It is recommended that employers and employees obtain legal advice when working through changes to working arrangements caused by the Covid-19 lockdown.

Hours of Work

Generally, if an employment agreement records the employee's hours of work, then an employer cannot change them to any substantial degree without the employee's agreement.  If the employment agreement says that an employer can change the hours of work, the employer still has to act fairly and reasonably before they do.

Annual Leave

Employees cannot be forced to use their annual leave entitlements in order to receive the Government Wage Subsidy or where the subsidy has already been provided.

Employees must agree before being required to use annual leave during temporary closures of a workplace due to Covid-19.

However, if an employee will not agree to take annual leave then an employer may direct annual leave be taken if they have first discussed this with the employee and provided 14 days’ notice before the annual leave is to be taken.

All businesses, including those using the Government Wage Subsidy, must follow legal requirements when making decisions about leave.

Scenarios of Leave and Pay

Even though the law in relation to annual leave and sick leave in the Holidays Act is set down relatively clearly in legislation, its application to a compulsory self-isolation situation is not straightforward.  A range of possible scenarios could arise for employers (whether essential businesses or operating remotely during lockdown period) for example:

If an employee is sick with Covid-19;

(a) If an employee's dependant is sick with Covid-19;

(b) If the sick employee (with any other illness or Covid-19) has run out of sick leave, or has no entitlement yet;

(c) If an employee refuses/does not provide consent to use their annual leave; or

(d) If employees are directed to self-isolate in accordance with Ministry of Health Guidelines or are voluntarily self-isolating but are not sick.

Employers and employees must deal with each other in good faith, and should adopt common sense around leave arrangements, and more generally in accordance with the Ministry of Health and Ministry of Business, Innovation and Employment guidelines.

We encourage employers in particular to obtain legal advice in the complex and unusual circumstances facing all businesses to avoid being in breach of their statutory obligations under the Health and Safety at Work Act 2015 ("HSWA"), Holidays Act 2003, the Employment Relations Act 2000, or any contractual obligations set out in their employment agreements with their employees.

Essential Workers and Health and Safety

Workers deemed to be essential during the Covid 19 lockdown currently include those in the construction industry where the construction work they are entailed in constitutes essential construction work (typically essential infrastructure works or emergency work essential for public health or safety), supermarket workers, health workers including nurses and cleaners, emergency services and bus drivers.  What constitutes essential business or essential services is being continually reviewed by the Government as the lockdown continues.

All workers, except essential service workers, are required to self-isolate under Alert Level 4.  However some employers may ask:  "what do we do if an essential worker has reasons not to go to work?"

If for example, the worker has notified their employer that they believe they are at risk of spreading Covid-19 and they are concerned that attending their workplace places them at risk of being exposed to Covid-19, then the employer should be guided by the latest public health guidance from the Ministry of Health on Covid-19, and if unsure, obtain legal advice.

If an employer does not take reasonable steps to manage a risk to a worker or any other person arising from the work being performed, they may be in breach of the HSWA.  They should not require an essential worker to do that work until they have taken reasonable steps to manage the risk.  Section 30 of the HSWA defines risk management as a duty to, as far as reasonably practicable, eliminate risk to health and safety or, if elimination is not possible, then to minimise those risks.

The reasonable steps include:

(a) Minimise, or eliminate physical interactions among employees and with and between customers.

(b) To have appropriate health, hygiene and safety measures in place.

(c) Provide any Personal Protective Equipment (PPE) that could be reasonably expected, in order to reduce the risk.

(d) Restrict activity to only what is essential during the Alert Level 4 period.  If essential work can be performed by a worker from their home (bearing in mind working at home, or away from home can involve risk to others required to stay in the home during lockdown), they should do so.  Employees, while working from home, are in a workplace covered by the HSWA.

If you have any of the questions in relation to the matters raised in this article, please contact our teams:

City Office: John Burley at jburley@mcveaghfleming.co.nz or Craig Andrews at candrews@mcveaghfleming.co.nz

Albany Office: James Turner at jturner@mcveaghfleming.co.nz

We are working remotely and can schedule a meeting with you via Zoom, WhatsApp or telephone.

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