Covid-19 (Corona virus) Employer obligations

For updates from:

• Ministry of Health https://www.health.govt.nz/our-work/diseases-and-conditions/covid-19-novel-coronavirus
• Employment NZ website https://www.employment.govt.nz/leave-and-holidays/other-types-of-leave/coronavirus-workplace/
• The Government economic response package https://www.beehive.govt.nz/feature/covid-19-economic-response-package
• Work and Income employer support https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-support.html#null
• Covid 19 - leave support https://www.workandincome.govt.nz/products/a-z-benefits/covid-19-essential-workers-leave-support.html#null

The Government announced the Covid-19 Economic response package on the 17 March and updated this on the 27 March – summary of wage and leave support is below with full details in the link to Government support package above

• A limited wage subsidy to businesses who are faced with laying off staff or reducing their hours. To qualify, businesses must have experienced a minimum 30% decline in revenue over a one-month period compared to the same month last year, as a result of Covid-19. 
• A leave payment to employers to cover employees and contractors who need to self-isolate, or have Covid-19, and who cannot work. The maximum payment that can be made to employers is $585.80 per person per week for 14 days. This applies for each case where the person is unable to work when diagnosed with Covid-19 or when they need to self-isolate.

The basic employer/employee obligations of good faith and being fair and reasonable are still the cornerstone of interactions.

Protecting your staff

Take all necessary steps to minimise the risk of your staff contracting the illness. For example:

• Follow guidance from the Ministry of Health.
• Provide staff with regular updates about the Covid-19 situation and keep them fully informed of procedures.
• Schedule regular flu-prevention training sessions.
• Formulate a procedure for staff to follow if they develop characteristic influenza symptoms.
• Consider installing protective barriers in the reception area.
• Use personal protective equipment as guided by health authorities.
• Have plans in place should staff present with flu-like symptoms.

Employer obligations and responsibilities:

• Use of sick leave – sick leave is entitled to be used if the employee is sick or a spouse or dependent is sick
• If the employee is off work because of risk of the coronavirus, but doesn’t have the virus? – These employees may be covered by Covid-19 leave support (see link above). Generally, the employee isn’t entitled to paid sick leave if there is no actual illness or injury (unless the employment agreement is more generous). Employers may agree to the use of sick leave and record it in writing, text or email if they agree.

Even if the employee is not on paid sick leave, they may be entitled to be paid during their absence, depending on the scenario below:

• The employer requires the employee to stay away from work:

Usually if your employee is ready, willing and able to work then you, the employer is obliged to provide them with work. But in this scenario the employer may not want an employee to attend work if there is a risk that they have been exposed to coronavirus. These employees may be covered by essential workers leave support (see link above).If this is the case the employer will be entitled and may be obliged under the Health & Safety at Work Act to direct them not to attend work. If there are so many employees absent that the safe functioning of a business isn’t viable then the employer may be forced into a closedown situation. The issue then is whether healthy but absent employees are entitled to be paid.

• Do employers need to pay employees who they require to stay away?

Yes, If the employer makes the decision that an employee cannot come to work, then in general terms the employee is entitled to be paid as long as they are ready, willing and able to come to work. Many employment agreements (including the HealthyPractice templates) include a ‘Force majeure’ clause which releases a party from its contractual obligations to pay an employee or provide them with work during extraordinary events. The threshold for invoking such a clause is expected to be high, and you should seek advice before doing so.

• If your employee is compulsorily quarantined?

The employee is not then ready, willing and able to work, this employee may be covered by Covid-19 leave support (see link above). Before making this decision, you should look at options and the feasibility of working from home, or other measure to reduce personal contact. The employer and employee may also agree to the use of sick leave or annual leave.

• If your employee is voluntarily staying away from work

If your employee thinks they may have been in contact with Covid-19 and wants to stay away from work because they do not want to risk infecting others.  Consider if you are an essential business could this employee be covered by Covid-19 leave support (see link above).  Otherwise, there may be no obligation to pay the employee, but if there is no agreement to pay the employee, the employee may feel the need to attend work after all. In this situation employers should have a clear understanding of the risk of the person attending work and consider the obligations to the rest of the staff who may be impacted.

• If your employee needs to stay at home to look after a child?

If the dependent is at home because they are at higher risk then the Covi-19 leave support subsidy may apply (see link above). If the child is sick, then your employee is entitled to use paid sick leave, until that runs out. But if the child is well and staying home because of school closures, the employer would not be obliged to pay the employee who needs to stay at home to look after them. Of course, the employer and employee can agree to different arrangements.

• Can an employee refuse to attend work?

Under the Health & Safety at Work Act an employee can refuse to attend work if they have reasonable grounds to believe they could suffer serious harm, therefore if there is a reasonable fear of contracting Covid-19 at work, they may have a right to refuse to attend.

This decision should be made after discussion between the parties, and other solutions should be considered e.g. working from home. If an employee refuses to attend work, unless the employer is at fault in some way, there is probably no obligation to pay the employee.

 In Summary employers should be:

• Proactively considering all the issues and scenarios
• Keeping up to date with information from trusted sources
• Communicating with suppliers
• Reviewing obligations under HSAW Act
• Developing policies that deal with all the questions but are flexible enough to deal with different scenarios and give guidance to both employers and employees
• Keeping open communication – also bear in mind H & S obligations alongside the good faith obligations
• Documenting all agreements that they make with employees
• Reviewing practice security.