Alert Level 3: what does it mean for Employers?

COVID-19 Alert Level 4

On March 25 New Zealand went into COVID‐19 Alert level 4, causing huge and unparalleled interruption to our lives and businesses. Many businesses have spent the last four weeks trying to find ways to effectively work from home while others have been unable to operate at all. 

With the Government announcement that the country will move to Alert Level 3 at 11:59 on 27 April, many employers will be looking forward to getting their businesses up and running again and many employees will be looking forward to returning to work. However, we aren’t out of the woods yet and there are many businesses that face two more weeks of alternative working arrangements or no work at all. This will leave many employers have some important decisions to make.

Does Level 3 mean that my employees can start returning to their usual workplace?
Government guidance says that if you can operate your business remotely using alternative working arrangements, then you should continue to do so. If you operate a business where working remotely is not possible, e.g. hospitality or retail, you will be allowed to re‐open at Level 3 provided that there is no direct contact with the public. Orders will need to be made via phone/online ordering and using contactless delivery or collection. If in doubt about your ability to open, you should seek further guidance from the Ministry of Business, Innovation and Employment.

What health and safety requirements should I consider at Level 3?
As an employer you are required, by the Health and Safety at Work Act 2015 (HASAWA), to minimise health and safety risks to your workers. Where you have employees returning to the work at Level 3 this means putting systems into effect to reduce the risk of COVID‐19 transmission in the workplace. What this looks like in practice for your business will be fact specific to your workplace but as a general rule you will want to maintain people ‘bubbles’ and minimise personal contact. You may also want to:

• Keep a record of who is coming and going in the workplace; 
• Implement policies that help minimise personal contact;
• Increase hygiene and cleaning practices; and 
• Stagger rest and meal breaks. 

If your employees are working from home you still have obligations under the HASAWA to ensure that health and safety risks are minimised, including both physical and mental health of employees. You may wish to check that your employees have all the equipment they require to work safely from home, that they are taking appropriate rest breaks, don’t feel isolated and are still able to have contact with their colleagues. 

I’m looking at re‐opening my business at level 3, but I won’t be able to give my employees their usual hours, what can I do?
Changes to an employee’s terms and conditions of employment can only be made via consultation with the employee and in accordance with employment law. As with many employment situations open communication and good faith are key to achieving a successful result, as well as a legally correct one. If you think that you cannot provide your employees with their usual hours of work you should consult your employees, giving them the opportunity to consider and respond to any
proposed change before decisions are made. It is also important that where changes to an employee’s terms and conditions of employment are made those changes are documented. 

I don’t know if my business can continue to sustain losses, likely even when we move to level 3; can I restructure?
The Government is encouraging employers who are facing difficulties, and who are looking into redundancy options, to consider applying for the COVID‐19 Wage Subsidy (Wage Subsidy) to help keep workers employed during this time. However, as an employer it is your prerogative to run your business as you see fit. If that means that the business cannot sustain some or all of its employees due to COVID‐19 that is a decision that only you can make. It is important to remember that you must always act in good faith, consult with employees and follow employment law; employment law requirements have not been put on hold because of the pandemic. We recommend that if you are considering redundancies that you seek legal advice.

If you have received the Wage Subsidy but are still considering redundancies you will need to remember that you may have given a declaration (when applying for the Wage Subsidy) that included a commitment to retain employees for the 12 week wage subsidy period. If you have received the Wage Subsidy, and made that declaration, then good faith would most likely require you to retain the employees for the duration of the wage subsidy period. 

If you have received the Wage Subsidy, and proceed with a redundancy process, you may be required to pay back the unused balance of the Wage Subsidy for those employees whose employment ends within the wage subsidy period. If you have received the Wage Subsidy, but are now considering redundancies, you should seek further legal advice. 

Conclusion
The COVID‐19 pandemic has been challenging for everyone but it is important to remember that your obligations as an employer have not changed. Any decisions regarding your employees must be made following consultation with your employees and following employment laws. If you are concerned about the effects of COVID‐19 on your business and what it could mean for your employees, we suggest that you speak to one of our employment law team.