Category: Workplace Law

Following a raft of updates in the employment law space, we encourage employers to ensure their employment agreements are fit for purpose and in line with recent updates.

With everything else employers have been dealing with, you may have missed some of the changes in the following areas which might affect your employment agreements:

• Minimum wage
• Public holidays
• COVID-19 related developments, including force majeure and/or business interruption
• Family violence leave
• Sick leave
• Parental leave
• Bereavement leave
• 90-day trial period or probationary period
• Holiday pay
• Discretionary payments; and
• Fair pay agreements

Of course, there are also some practical changes to how many businesses are operating with COVID-19 considerations and restrictions.  If you haven’t had your employment agreements reviewed in the last year or so, we’d recommend checking that they cover your minimum requirements and reflect your values and approach with your team.

Our Workplace Law Team are available to review and update your employment agreement templates, advise on any COVID-related queries and answer any general employment questions you may have.

Employment Law Assistance

We are able to assist with all of your employment matters – whether you are an employer or an employee.  If you would like to discuss any of the recent updates in the employment space, or any other matter, please do not hesitate to contact us.

Chantelle is a Solicitor in our Workplace Law Team and can be contacted on 07 958 7473.

The Employment Relations Authority has released a pivotal decision in the first employment law case in the COVID-19 era. In Raggett & Ors v Eastern Bays Hospice Trust [2020] NZERA 266, the Authority reminded employers that despite the Alert Level 4 lockdown and government restrictions, employment law continues to apply to all employment relationships, especially regarding employment agreements. Variations to the terms of employment agreements must be agreed to by employees, to avoid unilateral changes being considered unlawful and employers being liable for breach.

The Facts

Eastern Bays Hospice Trust (the Employer) closed over the COVID-19 Alert Level 4 lockdown, applied for the Wage Subsidy and subsequently made its Employees redundant. The Employer stated it would pay the Employees 80% of their usual pay for their notice period.

The issue at hand was whether in accepting the Wage Subsidy, the Employer was somehow released from its obligations to pay wages in the manner required under the employment agreements and the Wages Protection Act 1983. In applying for the Wage Subsidy, the Employer declared that they would use their best endeavours to pay employees at least 80% of their wages, which can only be imposed with employees’ agreement.

In this case the main concern raised was that the Employer had unilaterally decreased Employees’ pay without consultation and agreement from them. The Employer had effectively altered the terms of the employment agreement, and as no agreement for the variation was sought or given, the Employment Relations Authority ruled that the Employer unlawfully varied the employment agreements.

The Argument

In their defence, the Employer argued they were discharged of their obligations under the Wages Protection Act 1983 as the Employees were not “working”, New Zealand was in lockdown and the Employees could not work from home. The Authority found that the Employer’s argument was invalid, as the Employees were “ready willing and able to work” but were unable to because of the COVID-19 restrictions. Therefore, the Employees were still owed wages and the Employer was liable.

Going Forward

The main learning from this case is that to vary terms of an employment agreement (e.g. reducing hours, pay, and/or notice period) the explicit written consent of an employee is required. Without that consent, any deduction could be unlawful and the employer (as in this case) could be liable to pay wage arrears.

Employment Law Assistance

Renika Siciliano and Jerome Burgess are able to assist with employment matters relating to COVID-19, and provide guidance on crafting policies in relation to your business’ response to COVID-19, or any future pandemic event.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

As part of the Budget 2020 package, the government extended the Wage Subsidy to allow an extra 8 weeks of coverage per employee to provide continued support to those businesses who are still impacted after the Wage Subsidy ends.  The application period will be available from 10 June 2020 until 1 September 2020.

We recommend referring directly to the Ministry of Social Development website for the details of the Wage Subsidy Extension – it is up to employers to ensure that any declaration provided in the application for the subsidy is accurate.

The Criteria

At the time of writing this article, the government has released limited details regarding the application process, with more information available shortly.

What we know so far is that before applying for the Wage Subsidy Extension, employers must wait until their original 12-week Wage Subsidy has finished, and must not receive more than one COVID-19 subsidy at a time per employee.

To be eligible for the Wage Subsidy Extension, employers will need to show an actual or expected revenue loss of at least 40% for a consecutive 30-day period.  This period must be measured in the 40 days before the application is made (however cannot be measured earlier than 10 May 2020) in comparison to the closest period in 2019.  This is a significant increase from the 30% decline that employers had to demonstrate in order to be eligible for the initial Wage Subsidy.

If the application is approved, the Wage Subsidy Extension will be paid for a period of 8 weeks per employee, starting from when the application is submitted.

As was the case with the initial Wage Subsidy, the Wage Subsidy Extension will be paid to the employer as a lump sum, based on the same weekly rate as the Wage Subsidy, which is:

• $585.80 per week for each fulltime employee (working more than 20 hours per week); and/or
• $350.00 per week for each part-time employee (working less than 20 hours per week).

Employers have similar obligations to those under the initial Wage Subsidy, in that:

• they must take active steps to mitigate the impact of COVID-19 on their business;
• they will continue (on their best endeavours) to pay employees at least 80% of their income for the subsidy period;
• they must pass on to their employees the full subsidy; and
• they must retain employees on the Wage Subsidy Extension for at least the duration of the subsidy.

As is the case with all COVID-19 subsidies, employers must notify the Ministry of Social Development if their situation changes during the period that the Wage Subsidy Extension has been received and will be required to pay back any amounts they are no longer entitled to.

Employment Law Assistance

If you need assistance on applying for or managing the subsidy, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

In these unprecedented times, many employers are still operating under the condition that their employees are working from home.  While employees are no longer working from their employers’ premises, the COVID-19 level 4 lockdown does not negate an employer’s health and safety obligations under the Health and Safety at Work Act 2015.

Those obligations include ensuring their employees’ physical health and safety is upheld and eliminating or minimising any risks to their employees’ mental health.

This article covers initiatives employers can implement into their health and safety policy to show manaakitanga and ensure the safety and wellbeing of employees.

Risk assessment of the home-based workspace

Under the Act, the health and safety threshold for employers is to ensure their employees’ safety “so far as is reasonably practicable”.  Of course, meeting that standard is generally easier when the employees are “in the office” and the employer can monitor and manage the workspace.  During a lockdown, this standard is certainly harder to achieve since employers do not have access employees’ home workspaces.

For those of us lucky enough to be able to continue working at home, there are practical steps that should be taken to ensure health and safety at home.  Ask employees to undertake a risk assessment of their workspace, considering:

• Is their workspace dedicated to their work needs, away from noise and distractions?
• Does their workspace accommodate all the necessary equipment needed to perform their job, including their computer and related materials?
• Does the workspace enable the employee to comfortably sit at a level where both their forearms and feet rest parallel to the floor?
• Are their monitors at eye level? If not, could those monitors be adjusted by safely propping them up on books or placing them a different way?
• Is their working environment safe? This includes ensuring:
  • Personal comfort and safety: floors surrounding the workspace are clear and free from hazards, and ensuring the workspace is well-ventilated and temperate;
  • Electrical safety: cords and other tripping hazards are secured under a desk or along a wall, and multi-boards are not overloaded; and
  • Fire safety: fire safety equipment (e.g. an extinguisher), first aid kits and suitable evacuation plan are available should an emergency occur.
• Are they taking their allocated breaks and practicing self-care?
• Is there anything in terms of their workload, hours or responsibilities while working remotely that causes stress or other issues?

Once the assessments are conducted, employers and employees should work together to resolve any potential hazards or minimise risks.  Employees have an obligation to ensure their own health and safety as well, so discussing the issues that arise can help employees with this.

Policies and checks

Employers might want to incorporate this into any existing Health and Safety policy, or make tweaks to any existing Working From Home Policy.  Recording the practical things that your business does can help create a paper trail if ever needed, and provides for consistency as well.

COVID-19 constraints mean employers will not be able to physically check employee workspaces, so factor any additional steps/considerations into your policies and procedures.  This should include any risks to mental wellbeing arising from COVID-19 and the nature of the remote working requirements.  In this regard, we certainly recommend that employers provide flexibility where possible and employees communicate openly and frequently with employers about their respective situations.

Employment law assistance

If you need policies prepared or reviewed, or require assistance on how to manage your health and safety obligations at this time, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

Since the announcement of the Government’s COVID-19 Wage and Leave Subsidies we have received a number of questions about how they are to be applied.  Advice on specific queries may be required but we address these general pātai below.

Am I eligible for the wage/leave subsidies?

If you are a New Zealand business with an actual or predicted revenue loss of 30% month on month, you are likely to be eligible.  Check the Work and Income website (at https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html) or contact us to work through the details.

Can employers make employees use their annual leave entitlements to cover the period of leave imposed by the lockdown?

Only where this is done in accordance with the Holidays Act and any relevant employment agreement provisions.  Essentially 14 days’ notice of the requirement to take leave needs to be given.

But employers should always be working with employees as best as possible to agree on annual leave being taken.  If there is agreement between the employer and employee, then leave can essentially be taken at any time.  In these circumstances, we see that employers that have strong communication and trust with their workers are often able to find ways to make the best of a bad situation that help employees keep their jobs and help employers stay in business.

With all this talk of reducing employees to 80% of their work/wages, can employers just do that automatically?

No.  Employers still need to act in good faith and follow proper process to make changes to any employment arrangements.  In practice, the effects of COVID-19 will mean that the discussions around changes are often more readily understood by employees and therefore, it may be easier to engage on any proposed changes and reach agreed outcomes.

Any agreed changes to hours or wages, or agreements to use leave in advance, should all be clearly recorded in writing for the benefit of both parties.

How many different ways are there to structure an employee’s work/leave/subsidy arrangements?

Heaps!  Where employers and employees are working together to proactively find solutions, any arrangement is possible – just as long as it does not take away from minimum legal entitlements.  Some employees may agree to use all their annual leave in one go during the lockdown.  Some may drop to 80%, take a day off and use one day of annual leave per week and have the balance of their pay come primarily from the wage subsidy which the employer is receiving.  In dire circumstances, some employees may even take unpaid leave for an extended period of time just to ensure they have a job in two or three months’ time.

What is the deal with Easter and ANZAC holidays during a lockdown?

Again, the Holidays Act still applies and reflects minimum entitlements.  Employers need to pay their employees in accordance with the Act and any relevant employment agreement provisions.  If an employee would normally work on a holiday and does not, then they are entitled to be paid as they would normally be for that day.  If an employee works on a holiday then they will be entitled to time and a half, and possibly a day in lieu.

We appreciate that there will be a myriad of different scenarios out there and each one needs to be assessed against the above starting point.  COVID-19 does not change any minimum entitlements for employees.  Any employer who does not comply with the law in this regard, or looks to be overly ‘clever’, may face issues down the track.

Be kind to one another and act in good faith.  He waka eke noa.

If you need assistance on any of the employment issues related to COVID-19, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

Business owners are understandably concerned as to the implications that COVID-19 will have on their business and employees, and how to navigate through the uncertainty.  In response, the government have issued the Wage and Leave Subsidies to support the economy and business community through difficult times.

We recommend referring directly to the Ministry of Social Development website for the details of the subsidies given they change often and it is up to employers to ensure that any declaration provided in applying for the subsidies is accurate.

The basics

Employers can only access one subsidy at a time for each employee – so look closely at what you need the subsidy for.

Either way, to access the subsidies, employers need to show a 30% decline in actual or predicted revenue month on month, between January and June 2020, due to COVID-19.  This is a minimum requirement in order to access the Government COVID-19 subsidies.

For both subsidies, employers must declare:

• They have taken active steps to mitigate the impact of COVID-19 on their business;
• They will continue (on their best endeavours) to retain and employ employees at least 80% of their income for the subsidy period;
• If an employer is not in a financial position to pay the relevant employees at least 80% of their normal income, the employer must at the very least pass on to their employees the full subsidy; and
• They have discussed the application with the named employees, and those employees have consented to the information provided about them in the application.

The subsidies are paid out for each applicable employee at either:

• $585.80 per week for each fulltime employee (working more than 20 hours per week); and/or
• $350.00 per week for each part-time employee (working less than 20 hours per week).

Employers must notify the Ministry of Social Development if their situation changes during the period that a subsidy has been received for and will be required to pay back any amounts which they are no longer entitled to.

So which subsidy do you apply for?

For non-essential services, employers may need to access Government support to keep the business going and keep staff employed.  These businesses should consider applying for the Wage Subsidy if they are based in New Zealand with employees legally working here.

The Wage Subsidy is a one-off lump sum payment for employers (including sole traders and self-employed) to enable them to retain their employees for the next 12 weeks.  That is the underlying purpose of the Wage Subsidy – to help people remain in their jobs, while helping businesses stay afloat.

If you have essential workers who cannot work from home and, due to Ministry of Health guidelines, must stay home (e.g. at risk employees), the Essential Workers Leave Support payment may be available.  This is a one-off lump sum payment to enable essential businesses to cover employee wages for 4 weeks.  A further 4 weeks’ cover can be sought by separate application in the fourth week, if needed.

This is designed to help at risk employees keep themselves and others safe, despite the fact that their business may still be operating as an essential service.  Particularly where there are no other viable options for other support (e.g. the employee could elect to take sick or discretionary leave instead of receiving the leave support payment).

Employment law assistance

If you need assistance on applying for or managing the subsidies, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

During this time of uncertainty there is understandable anxiety and concern about the implications of Covid-19 on many fronts. This is certainly the case for many employers and employees across the country.

We are seeing some excellent examples of employers implementing pandemic plans to keep things flowing for their business and their staff. We have seen employers going above and beyond for their employees and adapting to this unique situation. When considering solutions, understanding the legal rights and obligations is important.

Generally speaking, what should employers be doing at this time?

Employers have a lot to work through to protect the health and wellbeing of their staff (as well as other persons within their workplace).  Employers must take this pandemic seriously and manage all risks that COVID-19 poses to employee health – both physical and mental.  Employers should:

• Have a pandemic plan or COVID-19 strategy in place for the workplace;
• Be familiar with, and constantly monitoring, Government directives and guidelines;
• Complete an assessment of employee health, leave entitlements and ability to work from home;
• Look closely at policies around working remotely, including the health and safety implications of this. Employers are responsible for the health and safety of their employees while at work, and this will extend to wherever work is being carried out; and
• Communicate key messages and actions – not to spread panic or create concern, but to provide certainty and security.

On the flipside, employees need to play their part by complying with those reasonable guidelines and instructions from an employer.  In particular, employees should be sensible when it comes to their health and protecting others through physical distancing and good hygiene.

How do you manage leave for self-isolation cases?

Employees who have been told to self-isolate under Ministry of Health guidelines (for example, after a period of overseas travel) cannot come into work.

During a period of self-isolation, if an employee can work from home and wishes to do so, then the employee can do so and receive their ordinary pay.  If an employee cannot feasibly work from home, the employer should consider paying the employee paid special leave, or another form of leave as agreed between the employer and employee.  We would recommend that, in the current circumstances, employers make all efforts to enable staff to safely work remotely if it is reasonably practicable.  This is certainly the case for those who may be immune-compromised or elderly.

What about leave and travel requests?

If an employee wishes to take leave or travel (to the extent possible), the employer may refuse the annual leave request.  Alternatively, if leave or travel is approved there will need to be discussions around what will happen during any period of mandatory self-isolation.  Options could include the employee taking paid annual or special leave, unpaid leave, working from home, or a combination of these.  The above options will depend on whether the employee can feasibly work from home, and what leave the employee has available.  In the absence of an arrangement, the period of self-isolation will become unpaid leave.

How do we manage potential business closures?

If we reach the point where the Government requires the physical closure of certain businesses, where all employees must stay home, an employer may consider a closedown period to all, or parts of, their business, if:

• COVID-19 has detrimentally affected an employer’s operations; and/or
• There is a risk of general infection in the workplace; and/or
• The business is cannot operate effectively due to absences.

The Government has announced a support package to assist employers/employees that meet certain criteria through the pandemic.  Details can be found online – here.

Where employees can work remotely and avoid using leave entitlements, we would encourage that to happen, in line with the Government guidelines.  By working with staff, ensuring proper preparation and resourcing, and maintaining communications, more employers will be able to continue to operate in some way through this difficult time and without needing to resort to restructures and/or redundancies.

Remembering what’s important

An employer’s focus is to look after employees and the wider working environment.  This means ensuring they understand all health and safety obligations and legal issues when it comes to managing leave arrangements for employees when required.  Of course, at a very practical and human level, employers should be mindful of how their employees may be feeling in this unique situation and avoid unnecessary anxiety by continuing to communicate internal protocols and steps being taken when it comes to COVID-19.

If you need assistance on how to manage any of the employment issues that are arising, and changing, on a daily basis during this time, please contact Renika Siciliano or Jerome Burgess.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

Think you need to make some changes to the current roles within your team?

Maybe the business isn’t doing so well or just lost a major contract?

Or do recent changes to your systems or technology mean that you just don’t need people doing the same mahi anymore?

Sounds like you might need to look at a restructure process.

Restructure

Restructuring is a process where the structure of a business is changed by changing, replacing or removing positions in the business.  Sometimes, a restructure can lead to certain positions becoming redundant because they aren’t needed anymore.  Whilst connected, the processes are separate.  But through both processes, an employer needs to act in good faith.  To do this, there are two fundamental things that are needed:

• A genuine reason to make changes and restructure (and ultimately to make any redundancies); and
• A robust process which involves genuine and proper consultation with all affected employees.

Genuine Reasons

An employer must have genuine commercial reasons for undertaking a restructuring process.

This means that redundancy is always about the positions that need to be changed, and never about getting rid of a particular employee.  So a restructure cannot be used to get rid of an employee because of their poor performance or illness – those are quite separate issues specific to an individual.  With a restructure, we start with the existing structure and positions/roles, and then we develop a new structure that will best fit the commercial needs of the business.

We note that commercial reasons don’t necessarily mean that the employer has to be experiencing financial difficulties.  While business operations may be successful, an employer may elect to make itself more efficient by abandoning or contracting out less profitable areas.  Part of assessing whether there is sufficient justification for a restructure is to also think through any other alternative solutions that may also achieve the desired outcome.

Consultation

Employers must consult with employees that may be affected by the proposed restructure.  This is critical and should, like any staff communications, be genuine – despite the often-difficult circumstances.

To start this process, an employer should clearly communicate the details of the restructuring proposal to any potential affected employees.  This would include providing potentially affected employees with access to information relevant to the proposed restructure and advise each employee how they might be affected if the proposal is implemented.  Each employee should have a reasonable opportunity to meet with the employer and to ask any questions or provide feedback.  Where there is considerable change proposed or redundancy is an option, it is reasonable for an employee to have a couple of weeks to provide feedback and/or seek advice.

Of course, once any feedback is received, a key part of the process is for the employer to then consider the feedback from all affected employees in a genuine way.  Employees should be invited to provide any alternatives to the proposed restructure and, where those are provided, they should certainly be considered closely and with an open mind.

Once the consultation process is complete, the employer will be in a position to make decisions about commercially viable options available going forward.  For example, a new position may be created that was not originally foreseen.  If this is the case, the criteria used to select the successful candidate must be clearly communicated to affected employees where more than one may wish to apply for the position and/or would be considered.

Where any employee is ultimately made redundant through a restructure process, the employer must act in accordance with the relevant employment agreement.  There is also an obligation to consider any redeployment opportunities available to an employee who is made redundant.

Tread Carefully

In the midst of circumstances that require such significant change as a restructure, it is easy for small parts of the process to fall through the cracks.  As in any employment process, it can unfortunately be those small parts that create risk to the business in terms of personal grievances by the employee.

If an employee raises a personal grievance in respect of the restructure or any redundancy, the employer’s consultation process, decision making process and reasons for undertaking the restructure will all come under scrutiny.   It is often here that any ulterior motives which may exist become easily visible and clearly set out rationales for any decision making are incredibly valuable.

If you need assistance with setting up and managing a restructure process, please contact us.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.