Covid 19 coronavirus: Sasha Borissenko - Bosses can't slash and burn

The pandemic doesn't give business-owners licence to flagrantly disregard employment laws. Photo / 123RF

Opinion

COMMENT:

Grant Robertson said it was too early to project the rate of unemployment as a result of Covid-19, but as of last week the wage subsidy had paid out $4.2 billion to 642,000 employees across the country.

Employers have been shutting down shop as if this was sudden and unexpected, but without wanting to trivialise the seriousness of the pandemic, we've known about Covid-19 since January.

It's been a tsunami in slow motion, and an emergency such as this doesn't give business-owners licence to flagrantly disregard New Zealand's employment laws.

Our laws don't really address situations like this. And there was ample opportunity to do so after the Christchurch earthquakes. The Council of Trade Unions has even gone so far as to launch an online tool for workers to identify employers who are disregarding the law.

Dyhrberg Drayton Employment Law Partner Steph Dyhrberg has echoed these sentiments saying "while many employers are coping well, there's been a fair bit of 'slash and burn' from day one. Some employers seem to be using the pandemic as an opportunity to get rid of people they don't want, and without any consultation or explanation".

Let's take a look at the kind of employment law related issues that are being seen:

To pay, or not to pay?

The current situation is extraordinary but part of the problem is the fact many employers just don't know and understand their legal obligations, Dyhrberg says.

Employment agreements are still in force, and employment laws still apply. But in the case of the lockdown she considers whether employers have an absolute obligation to pay employees is a grey area.

While employment agreements state employees will perform work and will be paid, what happens when people are simply unable to do the job in areas such as retail and hospitality? It's no-one's fault: the exchange of value, work for pay, is frustrated by circumstance.

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And then there are 'force majeure' clauses that are sometimes included in employment agreements. It means you could be fired as a result of an "act of god", and the employer doesn't owe you anything.

"However, you can't contract out of the Employment Relations Act, so triggering a force majeure provision should be thought through carefully," Dyhrberg says.

Redundancy

Dyhrberg has seen a lot of on-the-spot redundancies - one involved a seven-minute Skype call where the staff were given no warning, for example. People are being given their contractual notice and having to apply for benefits. One problem is that redundancy compensation in New Zealand isn't prescribed by statute.

Instead, what we have is the obligation for employers to act in good faith and in a way that's deemed reasonable in the circumstances. That old chestnut.

"Too many people are using these circumstances as a get out of jail free card. We're seeing a lack of good faith from some employers." Acting in good faith means employers having to lay off staff must follow a fair process, it should be the absolute last option, and notice must be given, according to the Employment New Zealand website.

In Dyhrberg's view, employers should avoid knee-jerk reactions, and as a bare minimum consider whether they are eligible for the subsidy to cover the 12-week period. After exhausting all other options, employers should start a consultation process if they have no option but to seek employees' agreement to reduce their pay to 80 per cent (under the 12 week wage subsidy rules) or lower.

What about new employees?

A new employee who for example is scheduled to start mid-April has employee status as soon as they agreed to their employment terms - written or oral. The person in question is "intending to work" under section 103A of the Employment Relations Act. Meaning, if they're told not to bother to start 'seeing as we're in lockdown', this would amount to a dismissal, and they may be able to raise a personal grievance.

Some employees have recently resigned, perhaps to go on an OE (overseas experience). Suddenly that's not possible and they want their old job back. Once an employee has given their notice of resignation, employers have no obligation to accept it. Tricky conversations are required.

Health and safety

Under the Health and Safety at Work Act employers have an obligation to ensure employees are safe while working at home. That's why at Dyhrberg's firm, the partners took steps to ensure their staff's working from home setups were safe and comfortable.

One lockdown issue is if employees aren't able to effectively work from home. "Say you've got five kids under seven, or you live in a wee cold, damp flat, or there's a big dog barking all day next door, it's reasonable to say you can't work from home. That's something businesses should be working through with their employees." People will be anxious and stressed, so Dyhrberg says it's vital to keep in touch with staff and keep an eye out for signs of mental health issues.

Other logistical challenges

You can't reduce salaries without the consent of your employees, and the same goes for annual leave. If a person refuses to take annual leave, employers have the option to give 14 days notice.

And then there are quite a few issues arising out of the wage subsidy. The language used in the Government's announcement didn't mirror the Holidays Act (what is an employee's "normal pay"?), and early advice about how to pay employees working less than 20 hours, or the application of the Minimum Wage Act was incorrect. "That's the trouble with moving fast to respond to a crisis such as this: we are all doing our best, but people are making stuff up as they go," says Dyhrberg.

Ultimately it's about taking care of your employees, she says.

"It's also time to move away from a culture of individuality. If we as a society had a greater sense of the common good - unlike what we have now where it's a bit dog eat dog, and 'he who dies with the most toys wins' - people wouldn't be falling through the cracks as we're seeing now."