Coronavirus / COVID-19 and the workplace - Employment Law refresher following Community Transmission

13 Aug 2020
Author: DTI Lawyers

With the return of Auckland to Alert Level 3 and its associated restrictions, the remainder of the country to Alert Level 2 until at least midnight Friday 14 August 2020, and the uncertainty regarding what the next few weeks might look like for the country with community transmission of COVID-19, we provide the following refresher regarding employment law matters.

Employment Law

The Employment Relations Authority has been clear that employment obligations remain throughout the pandemic. The key requirements, as always, are the mutual obligations of good faith (i.e. to be active and communicative in maintaining a productive employment relationship, and not doing anything to mislead or deceive or that is likely to have that effect. An employer must act, and its actions must be, as a fair and reasonable employer in all the circumstances at the time. Key to that test is the requirement to consult with employees regarding any proposals of change. 

Employers cannot make unilateral changes to the terms and conditions of employment, including with respect to wages/salary. Employees must be paid at least the minimum wage if they are continuing to work.

COVID-19 Leave payment scheme

The COVID-19 leave payment scheme is available to all employers, including sole traders, whose employees cannot work because they are required to self-isolate and cannot work from home. That includes those employees who have recently been directed to stay home by the Director General of Health.

Wage subsidy extension

The Wage Subsidy extension is available for employers to apply for until 1 September 2020. Those employers who assessed that they were not eligible for the Wage Subsidy extension prior to Wednesday 12 August Alert Level 3 and 2, may reassess whether they are eligible to apply for the Wage Subsidy Extension. A business can only apply for the Wage Subsidy extension once. 

To be eligible to apply for the Wage Subsidy Extension, a business must have experienced a minimum 40% decline in revenue over a continuous 30-day period in the 40 days immediately before the date of the application when compared to the same period last year. That revenue loss must be attributable to COVID-19.

New businesses that have been operating for less than a year or high growth businesses can compare their revenue to a reasonably equivalent period.

Before making the application, a business must have taken active steps to mitigate the financial impact of COVID-19 on the business activities (including but not limited to engaging with their bank, drawing on cash reserves as appropriate, and making an insurance claim). Further information regarding the Wage Subsidy extension can be found here:

Small business loans

The Prime Minister reminded businesses yesterday that the Small Business Cashflow (Loan) Scheme remains open until 31 December 2020. More information can be found on the Inland Revenue’s website.

We have previously written on the topics set out above, and you will find a number of articles on our website regarding rights and obligations:

Our specialist employment team is available to discuss your specific matters on 07 282 0174.