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Level 4 Lockdown - Things to Consider

Now that New Zealand is in level 3 and about to move to level 4 in a nationwide effort to stem the flow of COVID-19, as an employer, you have an important role to play.

This blog contains some things for you to consider.

Essential services

Unless you are an essential service, you must cease work immediately.

To check out whether you are an essential business go to the COVID-19 website.

As an employer, you have obligations under the Health and Safety at Work Act 2015 to ensure the health and safety of workers during an outbreak/pandemic as far as reasonably practicable.

Being an essential service does not absolve you from your health and safety obligations. You need to consider sending any older (over 70) workers, or anyone who has an immuno compromised system, home. Under the Health and Safety Act, you can require them to go home and if they refuse to, you may have grounds to suspend them to enforce this request.

As an essential service, if you do have staff at work, you need to ensure physical distancing of at least 2 metres, providing soap/sanitiser for your staff, ensuring surfaces are cleaned regularly (particularly kitchenettes, toilets, door handles), avoid staff all going to lunch or rest breaks at the same time. Ensure phones, keyboards, screens, and computer mouse are all cleaned regularly. Engage with your staff over what they can do and listen to any reasonable and practicable suggestions.

Remember during this time – put people before business, because without people, you won’t have a business.

Non-Essential Services

If you are a non-essential service, you need to cease work immediately.

This means you have to send your staff home and where possible get them to work from home. It means that you and your staff can not attend work until further notice. Where you can, you should have employees work from home. Regardless of whether they are working from home, ensure that you maintain regular contact with your employees while they are at home. This means having their home contact details. You need to consider how you will maintain contact with your employees, and clients, so they know what your business is and isn’t able to do and when you are back up and running again.

Some ways of keeping in touch:

  • Use social media - Facebook, WhatsApp, Instagram, Twitter, LinkedIn

  • Use phone trees – have the home and mobile numbers of your staff so you maintain have direct contact

  • Video calling – Skype, Zoom, Microsoft Teams, Messenger Video, WhatsApp Video

  • Email – have your employee's home email addresses for sending regular updates

Working from home.

Be mindful that if there are also children at home it may not be practical for employees to work full-time due to providing child care. If this is the case, working part-time may be an option that you will need to discuss with them. You will need to deal with each person’s circumstances on there merits.

  • Be clear about what hours your staff will work while at home and what you expect them to do.

  • Be clear about any video conference calls they need to do and ensure that they do not have customers or colleagues visit them at home.

  • You will need to consider what you will pay for in terms of expenses (internet, phone, printing) while working from home.

  • You may also want your staff to log their working time.

  • You need to be aware that if an employee has an accident while working from home, this becomes a work-related injury.

If an employee is unable to work from home or unable to work full-time while at home you need to discuss what, if any leave applies. You may have to put them on paid special leave or require them to take some annual leave for the time they are not working. If they are unwell, you will still need to pay them their sick leave entitlements (if they have any remaining).

You need to also remember that despite the current circumstances, if an employee is willing and able to work, you must still pay them.

This may mean that if your business is not able to sustain paying employees during the lockdown period, then redundancy may have to be considered.

Are considering Redundancy?

If you are considering redundancy, you must meet your good faith obligations to your staff. This obligation means consulting with them about what you are planning on doing, what that means for them and being open to hearing any alternative suggestions that might help you retain them in their jobs.

In consulting with your employees, you must seek their views on your proposal to make them redundant. This includes considering your employees using their annual leave, advancing them annual leave, leave without pay, or taking reduced pay for a period of time as an alternative to redundancy.

You can also exercise your right under the Holidays Act 2003 to give employees 14 days’ notice of the requirement to take their annual leave, if they have any current entitlement. You cannot require them to use annual leave they are accruing for the following leave year.

Government Wage Subsidy

The Government has extended its wage subsidy to all businesses, regardless of the number of employees. If, as a result of having to cease work immediately if you are not able to have your staff work from home, then this subsidy may apply to you.

The subsidy of $585.80 for a full-time employee, who is defined as anyone working more than 20 hours per week or $350 for a part-time employee, who is defined as anyone working less that 20 hours per week.

The Government has removed the cap on wage subsidies that can be paid to employers affected by COVID-19. Just note, despite the Work and Income site still referring to it, the cap of $150,000 per business is now gone.

This subsidy now applies to all New Zealand employers, contractors, sole traders, self-employed people, registered charities and incorporated societies.

Visit the Work and Income site for details on this package.

If you have to let employees go, you will need to be mindful of your obligations under their employment agreement. The Government has indicated that it will be waiving the stand-down period for employees made redundant, meaning that anyone who loses their job at this time will be able to go straight onto a benefit.

Force Majeure

If you have a ‘force majeure’ provision in your employment agreement, you may be able to rely on this for declaring your employees redundant.

If your workforce is able to work from home, then you may not be able to rely on this provision to declare your employees redundant.

If you do have to let any employees go, you must follow a genuine process. You may, however, have a reduced consultation period, but you must comply with the provisions of your employees’ employment agreement.

Employers who make employees redundant will not be eligible to receive the wage subsidy for those staff affected by the redundancy.

Preferential Re-employment

You should consider offering staff you make redundant the option of first preference for re-employment when your business gets back up and running again.

If you need advice or support during this time, McKone Consultancy is available to assist. We will be continuing to work and will utilise phone and video contact when providing support to clients.

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