With Auckland in Level 3 and the rest of the country in Level 2, this is a good time to reflect on what we have learnt from an employment law perspective during the last lockdown and in the subsequent cases.
In the days leading up to and during lockdown we were getting many queries from employers around the country on how to manage their businesses and employees over this period. Although the questions were very fact specific, they had three main themes:
- If my employees can’t work remotely, do I have to pay them?
- I am going to need to make some of my staff redundant, how do I do this?
- How does the wage subsidy affect how I pay my staff and my ability to make them redundant down the line?
Our employment law team was able to answer the majority of questions based on existing legislation and case law. But there were some questions, such as those around the wage subsidy, which were new for everyone including the employment law team. We were hearing about amendments to the wage subsidy scheme at the same time as you were.
As expected, we are now starting to see some case law on these issues, and others, come before the Employment Relations Authority. At the date of this article, we have seen three cases:
- Sandhu v Gate Gourmet New Zealand Limited  NZERA 259;
- Raggett & Ors v Eastern Bay of Plenty Hospice Trust t/a Dove Trust  NZERA 266; and
- de Wys v Solly’s Freight (1987) Ltd  NZERA 285.
These cases have confirmed some things that we already knew:
- An employer is always required to consult with someone before disestablishing their role;
- An employer can not unilaterally make the decision to reduce an employee’s pay; and
- If an employee’s pay is reduced they must still be receiving at least minimum wage for hours worked.
Of note, the Employment Relations Authority has formed views on matters that divided employment lawyers over this period:
- Employees are entitled to at least minimum wage for their contracted hours even if they are not working; and
- The government imposed lockdown did not mean that employees were not ready, willing and able to work. Therefore, all employees were entitled to be paid their contracted hours over lockdown, whether they were able to work or not. The exception to this is if an employer has reached an agreement with its employees about a reduction in pay.
We understand that at least one of these cases is to be appealed which may assist us in getting some certainty around these issues.
We expect further case law on issues around employees not being paid or on reduced pay over lockdown, restructuring processes and the interplay of these issues with the wage subsidy.
Workplace Law team
Employment: Andrew Shaw, Fiona McMillan, Gwen Drewitt, Maria Green, Hannah Martin, Joseph Harrop, Holly Struckman, Alex Beal, Giuliana Petronelli, Ana Fruean, Elise Wilson, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Julia Strickett, Ken Huang, Mary Zhou, Shi Sheng Cai (Shoosh), Sarah Kirkwood, Janeske Schutte, Sati Ravichandiren, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew Shaw, Fiona McMillan