Here we go again – what employers need to know about lockdown

Home Insights Here we go again – what employers need to know about lockdown

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Contributed by: Emma Peterson and Kylie Dunn

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Published on: August 25, 2021


As we watch the number of COVID cases being reported each day, we can't help but get the feeling that this lockdown is going to be longer than initially expected. Given we might all be here for a while (at least in Auckland), we thought it would be useful to provide a reminder about some of the key lockdown-related issues employers should be aware of.

To pay or not to pay

The key message here is that lockdown does not impact obligations under employment law and employers must continue to comply with the terms and conditions of employment unless a variation is agreed.
If you are not an essential service, then your employees should work from home where possible. If employees are not able to do their jobs from home, our view is that you still have an obligation to pay them. This is because they are "ready, willing and able" to work but are unable to do so because of lockdown. There may of course be exceptions to this requirement where employees are not ready, willing and able to work, and these should be dealt with on a case by case basis.

Using annual leave

As a reminder, employees can agree to take annual leave at any time. You can direct employees to use annual leave by providing 14 days' notice if agreement cannot be reached. Annual leave can be used for full or part days including being used as a top up for the wage subsidy.

Financial assistance available

The Government continues to offer various forms of financial assistance including:

(a) the Wage Subsidy which now requires a 40% drop in revenue for eligibility (among other requirements) and for employers to continue to pay employees (using best endeavours to pay at least 80% and in any event to pay at least the amount of the subsidy). The subsidy is $600 per week for full-time employees and $359 for part-time employees and is currently available for a two-week period;

(b) the Leave Support Scheme which provides for payment for employees who are in certain categories and unable to work because they are self-isolating and cannot work from home (including employees with COVID-19, close contacts of cases and "high risk" individuals). Payments are made in two week blocks at the same rates as the wage subsidy;

(c) the Short-Term Absence Payment which provides for a one-off payment of $359 for employees who have to isolate while waiting for a test result (and cannot be used in conjunction with the Leave Support Scheme); and

(d) the Resurgence Support Payment which businesses may claim following a 30% drop in revenue or capital raising ability over 7 days (among other requirements) and provides for the lesser of $1,500 plus $400 per full-time employee up to a maximum of 50 employees or four times the actual revenue drop experienced.

The big vaccination question

As New Zealand's vaccination rollout continues, many employers are considering the extent to which they can encourage employees to get vaccinated.
It is not lawful to require employees to get vaccinated. Employers can however require that a role be carried out by a vaccinated person for health and safety reasons following an appropriate health and safety assessment (this approach is supported by MBIE guidance). Whether this approach can be justified for a particular role will depend on the nature of the role and the COVID-related risks arising from it.  An employer can ensure new employees are vaccinated by offering employment conditional on the employee being vaccinated. When considering any action in relation to vaccinations, employers should consider whether any prohibited grounds of discrimination are relevant such as disability or religious belief.
Employers can ask employees if they have been vaccinated but must comply with all Privacy Act obligations in relation to any information provided.

Key takeaways

Employers should continue to comply with employment law and applicable employment agreements. Employers will not be able to make unilateral variations to employment terms and conditions such as reducing hours or pay. Given this, it is worth considering whether financial assistance is available to assist with paying employees over the lockdown period.
We hope that we can all get back to normal soon and, in the meantime, stay safe out there.

Please get in touch if you would like to discuss how this update may impact you and your organisation.

This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.

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