News and Publications

There is a lot of information to make sense of around COVID-19.  We comment on questions asked during our recent myth-busting webinar below:

Can we still terminate someone on a trial period during COVID-19?

Yes, provided that you meet all the requirements to safely dismiss an individual during the trial period.  We discuss what the requirements are here.

If an employee lives with family members who are now showing a negative result for COVID-19 – when can they return to work?

At this stage, they can return to work as soon as the negative result has been received but both parties should check with Ministry of Health guidelines to ensure this is the latest advice.

If we terminate someone and bring them back as a casual employee, do we need to pay back the wage subsidy or can this be paid to them as a casual?

The wage subsidy can be paid to casual employees.  There may be challenges in determining how many hours the casual employee ‘normally’ works in order to continue to pay the wage subsidy.  The Ministry of Social Development (MSD) needs to be advised of changes to eligibility, including where staffing arrangements change.

From an employment law perspective you need to make sure that the employee’s current employment relationship with you is lawfully terminated and they sign a new casual employment agreement.

Can we hire a casual employee to work between 4- 20 hours per week while we re-build the business? 

Many businesses are looking for more flexible working arrangements due to current uncertainty, and casual employment is one option where the employee works on an ‘as and when required’ basis with an irregular work pattern.  A casual employee should not be employed by a business to work regular hours each week, but a permanent part time employment relationship with flexible hours of work could be used instead.

What is a “lay-off” in our current situation?  Is there such a concept in our employment law?

This is not an employment law concept, but presumably refers to either a temporary suspension or permanent termination of employment.

Is an employer required to pay their employees a working from home allowance?

There is no obligation for an employer to pay an employee a working from home allowance but it can consider reimbursing employees for additional costs incurred. This should be agreed between the parties.

Can pay be reduced without consultation?

No.  An employer cannot make changes to an employee’s renumeration without seeking their agreement first.

Can we request employees take annual leave during the year?

You must attempt to reach agreement with the employee about when they will take annual holidays.  If agreement cannot be reached and the employee is entitled to annual holidays, you can require the employee to take holidays with 14 days’ notice.

Is it possible to top up an employee’s salary by asking them to take annual leave? 

See above regarding taking annual holidays. If employees are working reduced hours, they could take annual holidays to top up to their usual pay.

Would uncertainty around sales revenue and workload be a genuine reason for offering someone a fixed term agreement?

No.  Recent case comment confirms that financial uncertainty does not meet the requirements for fixed term agreements under section 66 of the Employment Relations Act 2000. The better option here would be to engage an employee on a permanent basis and make the role redundant if sales revenue no longer supported it.

If we need to restructure can we do this before we apply for the extended wage subsidy and then only apply for the extended wage subsidy for the remaining employees?

Yes.  If there is a genuine business reason for making redundancy, not alleviated by the wage subsidy, then you can go ahead with a restructure before applying for it for the employees who will remain employed.

If a business has to let an employee go during the wage subsidy, would the government expect the entire amount of the wage subsidy to be re-paid or just the wage subsidy for that employee?

You would not be expected to pay back the entire sum of the wage subsidy you received for all staff.  You are obliged to advise the MSD of any changes in eligibility and seek its advice regarding repayment requirements.

Need advice?

We recommend you seek specific advice regarding your circumstances, to ensure any risk of claims by the MSD and employees can be managed effectively.

Contact our team for help.