Can my employer change my employment agreeement because of COVID-19?

Answer

No. Your employer can't just change your employement agreement because of COVID19 or ever.

  • Any changes to your current agreement have to be agreed to and can’t have life after things go back to normal.
  • They have to be done in “good faith” - you have to have a say, you need to be given time to consider them and seek advice and you can’t be threatened to accept any change (for example,” If you don’t to this, I will have to let you go”.)
  • So you can’t be given a new working from home employment agreement
  • However, if you are at home and not sick or caring for someone else, your employer can require you to work from home if that is possible. 

What is Good Faith?

The law says that any changes to employment agreements must be talked about and agreed in good faith. Good faith means that you and your employer, as well as your union, must be honest with each other and actively communicate. In particular, if your employer wants to make changes that would make it hard for you to carry on with your job, they have to give you all the information and give you the chance to have your say before they make their final decision.

Good faith is a legal requirement in Section 4 of the Employment Relations Act 2000.

Process for changing your contract

Your employer can’t change your contract without your agreement. They can’t tell you to “take it or leave it,” or threaten to fire you unless you agree.

If you have a collective contract, your employer must negotiate any changes with your union.

If you have an individual contract, your employer must give you a copy of any changes they want to make and give you a chance to get advice from someone you trust. Then your employer must listen and respond to any questions or issues you have.

Your contract can’t lower or take away your rights under the law.

Working from home doesn't need a new agreement

Working from home does not require a new employment agreement and your employer can’t just make you sign one. Instead, you and your employer could agree to a policy or letter with temporary changes to your work arrangements while you are working at home. This needs to be discussed in good faith.

If you are working your normal hours while at home, the law says you have to be paid your normal wages or salary. If your employer takes any money out of your pay, while expecting you to work your normal hours, this would be against the Wages Protection Act 1983.

“Act of God”

Some employers have tried to claim that the COVID-19 situation is an “Act of God” or “Force Majeure” that allows them to change or cancel contracts. This is not generally true, unless there is a specific clause in your employment contract that allows for it. Even if there is a clause like this in your contract, it does not remove the employer’s obligations under the law, including to consult with you in good faith about any changes to your contract.

My employer has ‘offered’ a variation on a take it or leave it basis – what can I do?

  1. It is unlawful for an employer to ‘offer’ a variation on a take it or leave it basis. The employer must follow a process to reach agreement with employees.
  2. The employer is obliged to consult with employees and to consider their feedback.
  3. You are not obliged to accept a variation to your contract however there may be consequences of not accepting a variation. 

What if I want to consider a variation?

There will be cases in which workers may feel it appropriate to agree to changes (a variation) of their employment agreements to reduce wages or hours.  This is a matter of agreement; it can not be imposed on you.

When having discussions with your employer about proposed variations, employees should be careful not to make unnecessary concessions because in the circumstances of a substantial subsidy available to the employer, there is often less room for employers to argue that wages/hours be reduced.

Employees in negotiations with their employer about potential variations should consider and record in any concluded agreement on a variation matters such as:

  1. specifying a timeframe for the variation – ie. limiting the duration of the changes to the COVID-19 lockdown;
  2. whether all employees are offered the proposed changes;
  3. if the wages/salary is reduced, whether work hours should also reduced;
  4. what will be the process for employees to agree to the variation.

Remember, unless there is an agreed variation to your employment agreement, you have a continuing entitlement in accordance with your full entitlements under your employment agreement.