Coronavirus – Employment Law Issues – Dukesons Business Law – Employment Lawyer – Business Lawyer

March 2020

This Blog isn't legal advice – if you need legal advice on any employment law issue, please contact me. I'm business lawyer (commercial lawyer) in Auckland who provides advice on a wide range of business law including employment law issues.

There’s a lot of information out there in relation to this issue but I thought that it would be useful to set out some key essentials in a basic form. In relation to payment of affected workers, the information set out below assumes that an employer isn’t entitled to any form of relief under the Government’s rescue packages, including wage subsidies. Clearly, any employer affected by the Coronavirus would want to see what relief (if any) it would be entitled to under the rescue packages.

  • Employers are required to manage the health risks to workers and others affected in the workplace. The Coronavirus (CV) is a health risk.
  • Employees are required to take reasonable steps in relation to their own health and safety and in relation to the health and safety of others in the workplace.
  • Employers and employees should follow the Ministry of Health (MOH) guidelines in relation to the CV.
  • Employers should consider what protocols they should have in relation to the workplace to deal with the CV e.g. have they got warnings in place for visitors, customers, and staff that they shouldn’t enter the premises if they have CV symptoms; should they have meetings (whether with staff or clients or customers); do they have a good supply of antiseptic wipes and hand sanitisers available throughout the premises; should staff have to declare travel plans (to the extent that travel is still possible, this becoming less of a possibility)?
  • If an employee (or dependent) is ill due to the CV, they will be entitled to paid sick leave if they have any unused sick leave entitlement. If they don’t have any unused entitlement, the parties could agree that the employee can take accrued annual leave. Otherwise, unless the employer can afford to do pay the employee for all or part of the leave and agrees to do so (they might do this as annual leave in advance or simply agree to pay or simply agree to pay additional sick leave), the leave will be unpaid.
  • If an employee is suspected of having the virus, they should be told not to come to work and go into self-isolation in accordance with MOH Guidelines. If it’s possible to do so, the employee may be able to work from home. If so, note that the employer still has some H&S obligations in terms of taking reasonable steps to ensure that the work will be undertaken without undue exposure to H & S risks. If it isn’t possible or practicable for the employee to work from home, it may be that fair and reasonable employer acting in good faith should pay the employee - the employer has required that the employee not come to work.
  • If any employee is required to self-isolate because of MOH Guidelines or MOH directions but isn’t sick, they aren’t ready and willing to work and wouldn’t have any entitlement to be paid sick leave. However, they and the employer could discuss options including the employee working from home or treating this as sick leave or agreeing that the employee could take annual leave etc.
  • If an employee doesn’t want to come to work because of concerns about the CV or wants to go into self-isolation or has to stay home because a dependent has been required to go into self-isolation, this isn’t a sick leave situation. If it’s possible to do so, the employee may be able to work from home. If it isn’t possible or practicable for the employee to work from home, they aren’t sick and ultimately, they may not be entitled to any form of payment. An employee has the right to be assured that the work place is safe but if the employee isn’t acting within MOH Guidelines i.e. there’s no reason for them to be concerned, there may be wider employment law issues e.g. in law, the employee may be refusing to work without lawful justification.
  • An employer can’t require an employee to undergo medical testing. If an employer has reasonable concerns about an employee having the CV or having been exposed to the CV and the employee refuses to undergo testing, the employer would most likely be justified in requiring the employee to stay home, and possibly in not paying the employee.
  • Related to the above matters, employees have a right to request a variation to their working arrangements e.g. to request to work from home. The grounds on which an employer can refuse such a request are specified in the Employment Relations Act.
  • If an employer closes their door for a period, they may be required to pay their employees. However, it’s possible that a force majeure clause in any employment agreement would excuse the employer from the obligation to pay.
  • Travel to an increasing number of countries isn’t possible at the moment. It remains to be seen whether the Government will close borders. In the meantime, if travel will be for business purposes, it should be made clear that the travelling employee must comply with self-isolation and any other requirements on their return. In relation to business travel, consideration should be given as to whether it’s really necessary. It would be reasonable for an employer to ask employees to advise details of any other intended travel overseas and again, it should be made clear that the travelling employee must comply with self-isolation and any other requirements on their return. Self-isolation will give rise to considerations set out above as to whether the returning employee has any rights to be paid during the period of self-isolation.
  • It’s possible that some redundancies may occur. The effect of the CV on some businesses may be significant if not severe. Especially where employees can’t work effectively from home, some businesses may need to reduce staff to survive. It may be that in some of these situations, agreements of some kind could be reached with staff to enable them to remain employed e.g. reduction in remuneration for a period of time, reduction in hours, etc. The law relating to redundancies will apply e.g. there will be a need to consult with affected staff.
  • A possible alternative to redundancies may be to suspend staff if that would be a step that a reasonable employer could take. This could be a tricky issue. Most suspension clauses in employment agreements relate to disciplinary matters. The question is whether an employer could otherwise justify suspension. Any proposed suspension would require prior consultation with affected employees.§ There may be privacy issues e.g. as to what may be disclosed to whom in relation to affected employees.
  • There may be privacy issues e.g. as to what may be disclosed to whom in relation to affected employees. The Privacy Commissioner has issued some guidelines. Employers must keep their employees’ personal information confidential, and can only share that information if an exception in the Privacy Act allows. In relation to a pandemic, there are a number of exceptions that may apply to allow sharing of personal information but care should be taken not to disclose more information than is necessary and that it’s only disclosed to persons who are required to know:

Information can be shared if the employee concerned authorises it.

Personal information can be shared if it’s for the same purpose, or is directly related to that purpose, for which it was collected. A key reason employers are seeking information about employees well being is to enable them to take steps to keep workers and others safe and to manage the impact on the workplace.

The Privacy Act that sharing of information if it’s necessary to prevent or lessen a serious threat to public health or to the life or health of another individual.

There will be other issues than those set out above and permutations of fact scenarios given above. There will also be B2B issues e.g. if a business is adversely affected by the coronavirus, can it negotiate variations to its contracts or rely on force majeure or material adverse change clauses or the doctrine of frustration to bail


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