Changing employment terms
The COVID-19 situation in New Zealand has rapidly changed many workplaces and employment arrangements. This article considers changes to an employee’s place of work, hours and pay.
Change of place of work
Just because a workplace is required to close, it does not necessarily mean that the employee is not able to continue working, albeit remotely. An employee should consider whether they are able to work from home safely and consider any employer request to work from home in good faith. There may be circumstances in which an employee cannot work safely from home, whether for their own health and safety or for the health and safety of others in the employee’s home during the lockdown period.
An employee’s home will become a workplace for the purposes of the Health and Safety at Work Act 2015; the employer will remain a PCBU or person conducting a business or undertaking whilst the employee is working from home, and will retain health and safety obligations for the employee including to provide them with a safe place of work. Employers and employees should remain in regular communication with each other regarding work from home arrangements to ensure that the employee’s health and safety is not being compromised.
Change of hours of work
Every employment agreement is required to contain the employee’s agreed hours of work (the number of hours, start and finish times, or days the employee will be required to work).
COVID-19 will affect every business, and will likely result in a reduction in workflow, if not immediately then in the months to follow lockdown. Alternatively, an employee may not be able to complete their full range of duties whilst working remotely. This may mean that it becomes uneconomic for an employer to continue employing employees at their usual hours of work. In addition, employees may struggle to cope with the demands of caring for children or other family members whilst working from home if schools and childcare remain closed, and should consider whether they will be ready, willing and able to work for the agreed hours of work each week.
Alternatively, some businesses may need employees to work additional hours to cope with additional work due to COVID-19 or to cover for employees who are unable to work during lockdown.
Some employment agreements will give the employer the ability to change the employee’s hours of work unilaterally; where the employer has this right, they must act fairly and reasonably before they do so.
For any other change to an employee’s hours of work, an employer will need to consult with the employee and reach agreement before implementing a change in hours. It may be that agreement to a reduction in hours cannot be reached, in which case each party may need to look at other options through restructuring or redundancy. An employer should be open and honest with the employee and give them a fair opportunity to consider the reduction in hours and to respond with any alternate proposals (which the employer must reasonably consider).
Change of pay
Every employment agreement should contain the employee’s wages or salary (their pay). An employer cannot unilaterally change the employee’s pay. Where the employer’s business has been affected to an extent that the employer cannot afford to pay the employee their pay, the employer may need to look at options to reduce their costs, including employee pay. An employer must discuss any reductions in pay in good faith with affected employees prior to making any decisions, and endeavour to reach agreement where possible.
Any employee working during the lockdown period must be paid at least minimum wage for the hours that they work. Employers are encouraged to make use of the government’s wage subsidy scheme where possible.
It is worth noting that the adult minimum wage increased on 1 April 2020 from $17.70 to $18.90 per hour, and the starting-out and training minimum wage increased on 1 April 2020 from $14.16 to $15.12 per hour.
If an employer cannot access payroll systems to have an employee’s pay updated, this should be communicated clearly with employees and the pay increase should be processed as soon as the employer is able to do so.
Get in contact
If you would like advice about the effect of COVID-19 on your workplace (as employer or employee), or you would like our assistance with another legal matter you are facing, please contact your usual point of contact at Kemps Weir or contact us here.
Disclaimer: This publication should not be construed or acted on as legal advice. It is brief and general in nature. Specific advice should be sought.