Leave and pay entitlements during COVID-19 isolation periods

Employment Law
Mar 02 2022

At midnight on 24 February, New Zealand moved into Phase Three of the response to community transmission of the Omicron variant of COVID-19. This means that there are currently more than 5,000 positive cases of COVID-19 community transmission being recorded each day.

With the increase in positive COVID-19 cases, the isolation requirements for close contact and household contacts have changed, with he requirements loosening, freeing up more Omicron close contacts to work. It is now only positive cases and household contacts of positive cases which must isolate for 10 days. Other close contacts are being advised to monitor for symptoms, and if they arise, get tested and stay home until they receive their results.

With transmission and contacts increasing, and the high number of people being required to isolate and therefore be absent from the workplace, issues may arise as to whether or not an employer is required to pay an employee who is isolating. We have briefly outlined the different examples below.

When able to work from home
The current recommendation is that workers who can work from home should do. However, this is not always possible, depending on the nature of the employee’s work. For example, a customer facing employee that works in retail or hospitality cannot carry out their usual role while at home. It might be possible to reallocate tasks so that the employee is able to perform some work from home (for example placing orders for stock or taking phone calls), but this may well be limited.

If an employee is ready, willing and able to work from home, then they should be paid for doing so. In this case, an employer must continue to pay the employee as per normal. This also accords with Government recommendations to employers to allow flexibility in work from home arrangements.

When unable to work from home
If an employee is unwell or tests positive for COVID-19, and is unable to work, they are entitled to take sick leave. The Holidays Act 2003 provides that after six months’ of employment, an employee is entitled to 10 days’ sick leave each year. These 10 sick days can also be used when an employee is required to care for others who are sick or who are dependents, e.g. a household member has COVID-19 and they are isolating with them and providing care.

If an employee uses all of their sick leave entitlement and are still unable to return to work, unless otherwise agreed, they will then be on unpaid leave. Alternative arrangements could include allowing the employee to use their annual leave, time in lieu or other leave entitlements, or leave in advance.

Where an employee is well but unable to work because of isolation requirements, the employee does not technically qualify for sick leave. The employer and employee should consider what options are available, such as taking annual leave or leave without pay, or the employer accessing one of the below Government assistance schemes.

In some situations, particularly where an employer has an excess annual leave balance, it may be tempting to have them access their annual leave balance. However, this can only be done where agreed by the employee, or, if required by the employer, following a genuine consultation period around the taking of leave, only if no agreement can be reached, giving the employee 14 days’ notice of the requirements to take leave. In the case of isolation requirements, the isolation period will have expired before the notice period has expired.

Close Contact Exemption Scheme
Critical businesses may obtain an exemption for workers who perform critical work. The workers must be vaccinated, asymptomatic, undertake RAT testing and meet associated rules of the scheme, including not being able to perform such work remotely. We can provide advice to assist in determining if your business, and which of your employees, qualify.

Bubble of One
There is also an exemption for workers who are household contacts, asymptomatic and vaccinated, to perform work in a ‘bubble of one’, where conditions are met, including providing them their own physical space to perform the work. We can advise on qualification for this exemption. Unlike the Close Contact exemption scheme, there does not appear to be any RAT testing requirement, however as a household contact they will have day 3 and day 10 testing requirements.

Financial support available for businesses
There are several financial support schemes available to businesses to assist with the impact of COVID-19 depending on that business’ specific circumstances.

COVID-19 Support Payment
The COVID-19 Support Payment (“CSP”) opened for applications on 28 February 2022. The CSP is a payment available to businesses which have experienced a 40% or more drop in revenue as a result of COVID-19 when compared to the revenue earned 5 January 2022 to 15 February 2022.

The CSP for a particular business will be based on the number of employees and the level of revenue.

There are a number of requirements which must be met to qualify for the CSP. Please get in touch for further details.

Short-Term Absence Payment
The Short-Term Absence Payment is available to employers to pay workers who isolate while waiting for a COVID-19 test result. To be eligible, workers need to be unable to work from home and need to miss work while waiting for their test results. The expectation is that this payment is used to pay affected employees’ wages. If the employee’s wages are less than the Short-Term Absence Payment then the difference should be used to help pay any other affected employees.

Leave Support Scheme
The Leave Support Scheme is available to employers to help pay employees who have to isolate and who can’t work from home. Again, the expectation is that this payment is passed on to workers.

Small Business Cash Flow Loan Scheme
The small business cash flow loan scheme will provide assistance of up to a maximum of $100,000 to businesses employing 50 or fewer full-time employees. If an employer has previously applied for this loan and it has been fully repaid, it may apply again. The maximum amount an employer can borrow depends on how many full time and part time employees it has. This loan is interest free if it is paid back within two years. Otherwise, it incurs a 3% interest rate for a maximum term of five years. Repayments are not required for the first two years.

In order to be eligible for this scheme, the employer must show at least a 30% drop in revenue due to Covid-19, measured over a 14-day period in the past six months compared with the same 14-day period a year ago. If revenue from the same period a year ago was also affected by COVID-19, then compare the same 14-day period two years ago.

Conclusion
The above advice is only general in nature. The legal framework If you would like specific advice on what your rights, obligations, or duties are as an employee or employer, the Holland Beckett Employment team would be happy to assist.

You may also like ...
Swearing in the workplace – can I be dismissed for swearing at work?
Swearing? We are all guilty of doing it to some extent, but what about in the workplace? Is it acceptable and if so, to what degree? Can your employer discipline you for an outrage of expletives? In some circumstances and in certain workplaces, dismissal may be wholly warranted, while in others, it may not, notwithstanding that it is the same conduct in question. Confused? Context is key alongside a myriad of factors to be taken into consideration. Ultimately it will come down to what is fair and the workplace culture. The issue of “fairness” is addressed in the Employment Relations Act 2000 which tells parties whether a dismissal will be fair or not. For instance, in the case of Waihape v AFFCO New Zealand Limited [2017] NZERA 13 several mitigating factors were taken into consideration, including the context of the situation, the nature of the workplace and the relationship between the parties involved. In Waihape, it was determined that given the nature of the workplace, several individuals regularly swore in their day-to-day banter and an employer would struggle to justify taking action for a staff member using bad language in those circumstances. The evidence showed that management failed to crack down on similar offensive language in the workplace. The Authority quoting from precedent said: “It is well established that an employer will fail to justify a dismissal where communications do not appear to be greatly out of character with others apparently condoned by management in the workplace.” Overall, case law suggests that if an employer wishes for certain standards to be upheld, it will need to ensure there are policies in place to make employees aware that swearing is unacceptable. Furthermore, employers will need to demonstrate that it does not tolerate swearing in the workplace by enforcing the policy when it is breached. It is both best practice and prudent for employers to ensure that the expected and acceptable standards of behaviour are addressed and imbedded into any training and induction processes. Above all else, it is imperative that employers do not single out an individual for the use of course language while letting other employees get away with the same. The key takeaway is, like with all disciplinary matters, a fair procedure must be followed. An employer will need to establish the facts and review any offensive language in the context of the circumstances alongside the company’s relevant policies. Before taking disciplinary action, an employer will need to carefully consider whether a verbal warning or written warning is more appropriate. Dismissal would only be justifiable if the employee’s conduct warrants gross misconduct and summary dismissal. Whether you are considering taking action against an employee or you are an employee facing disciplinary action yourself, we recommend getting cogent advice first. Speak to our team today.  
Read more
Restructuring in the workplace – What employers need to know
With the economy continuing on its downward slide, you will not be alone in giving thought to potential cost cutting measures, including reducing your labour costs. Restructuring is usually a last resort for employers and is only a step that tends to be taken when there seem to be no other viable options for reducing costs quickly.  While the impact on employees is immense, it is clear that a restructure process can be just as stressful and fraught for an employer.  That is why, sometimes, employers can get things wrong and may find themselves at the centre of a personal grievance, which can result in greater stress, cost and uncertainty. A restructuring needs to be substantively justified, and procedurally correct.  If you do not meet both of these requirements, there is a risk that if an employee were to make a claim against you, it could be upheld. What is Substantive Justification? It is likely that during recessionary times, such as we are in now, the substantive reasons for a restructure will be fairly obvious to your employees.  However, you will still need to justify this by providing evidence in support.  This may include pointing to reduced sales figures or forecasts, showing increased costs (i.e. materials, rent, insurance), or any other information that you are willing to share that goes toward justifying the proposal to restructure. What is the Correct Procedure? The procedure for restructuring is usually where an employer can get tripped up.  To start, you need to remember that you should not pre-determine that a restructure is inevitable.  You have a good faith obligation to your employees to consult with them before any decisions that may affect their employment are made.  It may be that during consultation, you are able to see a way forward that means a restructure is not required, or at least not to the extent that you had originally envisaged. Once you have substantive justification, you need to advise your employees that you are proposing a restructure and give them adequate information including what the restructure would entail, how it would impact them, and how you wish to consult with them about it. You will then move to the consultation stage and be ready to provide further information or answer any questions the employees may have.  Once you have finished consultation, you will need to advise the employees of your proposed decision.  Your employees should then be given an opportunity to comment on or ask further questions about the proposed decision.  It is not until they have been given this opportunity that you should procced to confirm your decision. The exact process you follow will depend on factors such as the size of your workforce, the number of roles that may be impacted, the typical method of communication with employees, the specific terms of your employment agreements, and the location of your employees. Having guided employers through numerous restructures, the one point we want you to keep in mind is that getting your restructure right is by far more preferable than having to deal with the consequences (and potential costs) of getting it wrong.  We can provide specific advice and guidance on restructuring and all other employment related issues, so please contact our employment law team at any time for further information.
Read more
Holidays Act – could change finally be on the horizon?
Earlier this week the Workplace Relations and Safety Minister Brooke Van Velden gave a speech to the Auckland Business Chamber, reiterating her priorities following the conclusion of the Government’s 100-day plan in which Fair Pay Agreements were abolished, and the availability of 90 day trial periods extended to all new employees. The Minister has confirmed that delivering changes to the Holidays Act (“Act”) is one of her top priorities, which is likely to be welcome news to both employers and employees. Compliance with the Act has been difficult and costly for employers and payroll providers. The Labour Government put together a taskforce in 2018 to address the many issues being experienced by employers when calculating leave and holiday entitlements. The taskforce made a number of recommendations, all of which were accepted (for further details on these changes see our previous article here). A draft Leave Entitlements Bill was prepared, however was not introduced prior to last year’s election. The overarching issue with the Act is that there are multiple ways to calculate an employee’s holiday pay, and the Act has struggled to keep up with working arrangements outside of a normal five day a week salaried employee. Payments such as bonuses, commission, or if an employee works variable hours mean that the calculations are not straight forward and are often done incorrectly. The changes proposed were an attempt to simplify these calculations. The Minister has now confirmed that the changes recommended by the taskforce and the draft Bill will not be “simply rubberstamped” and will be subject to scrutiny as well as consultation with key stakeholders. She went on to say “if the policy is difficult to draft, chances are businesses would have a tough time implementing it too”. This indicates a major reset of the Act, and the changes which we had expected, could be on the way. Other indicated changes to employment law include a change to the rules surrounding contractors (with the Court of Appeal due to hear the Uber case this month (see here for our previous advice regarding this), we are likely to also have further developments in this area from the Courts later in the year) and changes to personal grievances. The Minister has asked for advice on whether an income threshold for raising a personal grievance can be set and removing eligibility for any remedies when an employee is at fault. The Minister has been very clear that she would like to receive feedback from the stakeholders who will eventually have to work with the Act and it is important that businesses use this opportunity to have a say on the Act. The majority of employers have struggled to achieve strict compliance with the Act due to its many complexities. Putting forward issues which regularly impact your business will ensure these can be given consideration. Our team will be closely monitoring this and will provide specific information on how feedback can be given when this information is available. If you require assistance with your current obligations under the Act, or would like to discuss providing feedback then please feel free to get in touch with a member of our specialist employment law team.
Read more

Start typing and press enter to search

Scroll to Top