Over the coming weeks we will try to answer some of the most pressing questions raised by the behaviour of employers in response to COVID-19. Remember your rights at work still stand even in a crisis. If you think you have been treated unlawfully by your employer because of COVID-19 - let us know here.
- Can my employer just stop paying me because of COVID-19?
- What happens of my employers says I'm made redundant because of COVID-19?
- What about workplace health and safety and COVID-19?
- My employer says we are an essential industry
- Can my employer make me use my sick leave or annual leave for COVID-19?
- I am a casual worker
- What should happen when my employer applies for the COVID-19 wages subsidy?
- Can my employer change my employment agreeement because of COVID-19?
- Can my employer reduce my wages because I’m working from home and looking after my children?
Can my employer just stop paying me because of COVID-19?
No. Your employer has to keep honouring your employment agreement. That means:
- If you are available to work - whether at home or not - people should either be fully paid or, if their employer is accessing the wage subsidy, their employer must make "best efforts" to fully pay them and should, at the very least, pay them the full amount of the subsidy.
- Some employers are saying COVID-19 is an “act of god” (other terms used include “frustration of contract” and “force majeure”) so they don’t have to follow your employment agreement. This is not true. They still have to follow your employment agreement.
- Some employers are saying they are “suspending” their business to stop paying people. Unless your employment agreement specifically covers this - suspension is illegal.
What happens of my employers says I'm made redundant because of COVID-19?
"Redundancy" is when your employer tells you they can no longer employ you and they are ending your employment agreement.
An employer can say that they are no longer able to employ people and they are going to make the redundant because of COVID-19, but there has to be a fair process for doing this.
- First they need to give a valid reason - not just "COVID-19". And is it just you or is it all staff? Why?
- Second you need to be given a reasonable chance to respond
- Thirdly have to show “good faith” in the process - that is be open and honest about what they are doing and listen to what you have to say.
- You are entitled to all money that is owed to - pay, annual leave, redundancy pay - if any is covered in your employment areement
- And they have to pay you for whatever notice period you have in you employment agreement (for example if they have to give two weeks notice, they have to pay you for two weeks from their final decision to make you redundant).
There are several requirements on employers and safeguards against wrongful redundancies. The decision to make an employee redundant must be one that a fair and reasonable employer could make in the circumstances. They must also follow a fair process in coming to the decision to make an employee redundant.
The Government’s wage subsidy scheme will be a significant factor in the justification of a redundancy as there is an expectation that employers should access the subsidy before making workers redundant. Employers must retain the employees named in their subsidy applications for the period they are receiving the subsidy.
Steps an Employer must take before making anyone redundant
The employer must:
- Provide you with all relevant information about the proposal to make you redundant
- Provide you the opportunity to properly consider this information
- Allow you to have input into the decision-making process by allowing you to make proposals. They must genuinely consider any proposal you put forward
- Consult with you before making the final decision. This means:
- Undertaking genuine consultation before the decision is made and not just approaching you after they make a decision.
- Complying with all obligations within contracts and enterprise agreements to consult about the redundancy
- Taking an open mind to your proposals, being responsive and communicating with you through the process
- Consider any reasonable opportunities for redeployment
- If there is a vacant position that you are able to work – your employer must redeploy you to this position
- The Employment Relations Authority may also look at other issues, such as whether the employer provided you with counselling, with career and financial advice, and with retraining.
If your employee does not meet these standards, you are able to raise a personal grievance for unjustified dismissal. The Employment Relations Authority will ultimately decide whether the employer’s decision was one that a fair and reasonable employer could have made.
If you are entitled to any redundancy entitlements, these will be found in your collective or individual employment agreements, or any other agreement you’ve made with employer. Generally entitlements will include notice or pay in lieu of notice and possibly redundancy pay.
What about workplace health and safety and COVID-19?
If you are carrying on as an essential industry or if you are working from home, your employer still has to consider your health and safety and take every step possible.
In relation to COVID this should include providing appropriate protective equipment and making sure you are physically spaced.
You always have the right to stop work if you believe it is unsafe.
My employer says we are an essential industry
A very clear list of essential industries is available here.
An employer cannot just declare themselves an essential industry and keep going. If you work isn't essential you should be staying home.
Can my employer make me use my sick leave or annual leave for COVID-19?
You can’t be told to take annual or sick leave to cover for a downturn in business caused by COVID-19. If your employer tries to make you take annual or sick leave make it clear that they cannot legally do so.
You should use sick leave only if you are sick. Sick leave is only to be used in the circumstances described in s65 of the Holidays Act: the employee, their spouse or partner, or person who depends on the employee is sick or injured.
You can agree to take annual leave - but you actually have to be on leave. They can’t keep you working in any capacity.
I am a casual worker
Even if you are a casual workers still have rights
- Casual workers are also entitled to the wage subsidy - your employer must seek it for you.
- You still have a right to sick leave.
- If you have a regular pattern of work over a period of time - the law would say you are not a casual. So you would have a right to continue being paid and an employer could not just terminate your employment because of COVID-19.
What should happen when my employer applies for the COVID-19 wages subsidy?
The wage subsidy is to help keep your income (not your employer's).
- The government has been very clear - the subsidy goes to the employer but they must pass all of it on to you.
- If your employer is collecting the wage subsidy they can’t make you - or any other people at work - redundant
- They must pay you at least 80% of your current income. (But they should be aiming for 100%)
- But, if you are being paid less you should work less. For example, if you’re only getting paid 80% of your regular income, you should only work 80% of your regular hours.
It is important for you to understand the context of the COVID-19 wage subsidy. During the Government imposed COVID-19 lockdown, the Government has made a wage subsidy available that employers can apply for to assist them to meet their wages/salary obligations. The Government has made it a condition of the subsidy that the employer must apply best efforts to continue to pay 80% of wages/salary while they are in receipt of the wages subsidy. There may be situations where the employer is unable to do this but any reduction in pay to a limit of $585.50 must be as a result of agreement between you and your employer. However, the employer’s application for, and the passing through of a wage subsidy, is a separate issue to your rights under your employment agreement
Can my employer change my employment agreeement because of COVID-19?
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?
- 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.
- The employer is obliged to consult with employees and to consider their feedback.
- 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:
- specifying a timeframe for the variation – ie. limiting the duration of the changes to the COVID-19 lockdown;
- whether all employees are offered the proposed changes;
- if the wages/salary is reduced, whether work hours should also reduced;
- 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.
Can my employer reduce my wages because I’m working from home and looking after my children?
- Most employment agreements require the employer to provide work. If the employer is unable to provide work, such as in the current circumstances of a Government ordered lockdown, it is likely you are entitled to be paid, in the absence of a term in your employment agreement which specifies otherwise.
- Your employer may want to vary your employment agreements. Any changes to an employment require agreement negotiation and agreement.
- Employment agreement obligations are not varied by any of the current government schemes.
Employees have been sent home, and schools closed, by the Government. In these circumstances, if you are working from home, and looking after your children, your employer must pay your full wage. Your employer should access a wage subsidy on your behalf and pass it through to you.
In addition, your employer should consider reasonable accommodations and other supports which might be needed to facilitate your working from home whilst caring for dependents such as, for example:
- Meetings of half an hour as standard, one hour maximum
- All meetings limited to essential only
- An alert like a text message rather than an email with urgent work so people are not having to constantly monitor email (or agree on a preferred communication style with employee)
- Agreed periods where the employee is available and not available, this may mean accommodating for work being done in evenings.