Business at Alert Level 4

The Government has decided that all of New Zealand south of Auckland will be in Alert Level 4 until 11:59pm on Tuesday August 31st. As such, all businesses will need to adapt to the changed circumstances. Here are the main things businesses need to know about navigating the Level 4 period.

First off, only essential businesses and services can be open, and only if they can do so safely. For more information on this see the previous article we posted.

One thing that was made clear under the last lockdown is that employment obligations continue as usual. Among other things, this means that an employer: cannot unilaterally reduce an employee’s pay; must consult with an employee if disestablishing their role; must discuss changes to work arrangements in good faith; and pay at least the minimum wage to any working employee. Despite the extraordinary circumstances, agreement is still king. Any changes to employment agreements must be made in good faith and only with the consent of the employee.

Government relief is now available in the form of the Covid-19 Wage Subsidy, the Short Term Absence Payment, the Leave Support Scheme and the Resurgence Support Scheme. Applications for the Wage Subsidy opened on Friday August 20 for two weeks. To be eligible a business must:

• Operate a business in New Zealand that employs and pays the employees named in the application;

• Declare that they expect a loss of 40% revenue as a result of going into Level 3 or 4 for a week or more.

Crucially, just because a business receives the wage subsidy does not mean it can unilaterally reduce its employees’ pay. The consent of employees is always required.

This lockdown there is a vaccine available to minimise the risk of Covid-19 in the workplace. However, given applicable employment and privacy laws, employers should be careful about seeking information about their employee’s vaccination status. Employers should consider whether they have a lawful purpose to collect such information, such as a compelling health and safety concern. It is at least likely that an employer will be able to request vaccination status from front line workers engaging with vulnerable people such as retirement community staff.

Finally, many leases, such as the Auckland District Law Society lease, contain provisions entitling a tenant to an abatement of a “fair proportion” of rent and outgoings while the tenant is unable to access their premises due to an “emergency” to fully conduct their business. Unfortunately, however, there is as yet no case law which sets out a procedure to calculate a “fair proportion” of rent abatement. It is advisable for landlords and tenants to negotiate a reduction in good faith to prevent costly and potentially disadvantageous litigation.

The Delta outbreak and lockdown is a challenging time for both businesses and staff. But we have been here before. The most important thing to remember is to operate in good faith at all times. We will get through this by working together.

For more advice on how to operate at Alert Level 4, please contact us.