New Zealand Payroll

Everything you need to know about paying your NZ based staff

COVID-19 and KeyLink #5 Employment Law

01 April 2020- 15 min read

Operations

I know that all business owners and managers are under a huge amount of stress at present. This e-mail is to help you understand some of the Employment Law issues you will be facing.

Here is the highlight

You can’t vary your employee’s hours or rate of pay unilaterally.

You need to negotiate in good faith when you are altering employment agreements.
To save yourself a lot of pain later, you need to document how this was done and make sure you get any variances signed. (At present this could be an e-mail acknowledgement)

You have to give your employee 14 days’ notice if you want to force them to use Annual Leave and it can only be entitled Annual Leave.

You can find some commentary from the news media here:

https://www.stuff.co.nz/business/better-business/120666823/employers-unilaterally-cutting-pay-are-acting-illegally

https://www.rnz.co.nz/news/on-the-inside/412996/opinion-don-t-panic-employment-law-hasn-t-changed

https://www.rnz.co.nz/news/national/413059/wage-subsidy-and-workers-rights-your-covid-19-questions-answered

Here is what is the current Declaration - COVID-19 Wage Subsidy Scheme:
https://workandincome.govt.nz/online-services/covid-19/declaration-wage-subsidy.html

Your obligations to use the subsidy to retain and pay your employees

  • You acknowledge that the granting of your application and your receipt of the subsidy does not override your existing obligations under the Employment Relations Act 2000;
  • You will not make any changes to your obligations under any employment agreement, including to rates of pay, hours of work and leave entitlement, without the written agreement of the relevant employee; [3]
  • You will retain the employees named in your application as your employees for the period you receive the subsidy in respect of those employees;
  • You will not unlawfully compel or require any of the employees named in your application [4] to use their leave entitlements for the period you receive the subsidy in respect of those employees; [5]
  • You will only use the subsidy for the purposes of meeting your named employees ordinary wages and salary and your obligations in relation to this subsidy.
  • You remain responsible for paying your employees ordinary wages and salary for the employees named in your application.
  • You will for the period you receive the subsidy:
    • use your best endeavours to pay at least 80 per cent of each named employee’s ordinary wages or salary; and
    • pay at least the full amount of the subsidy to the employee; but
    • where the ordinary wages or salary of an employee named in your application was lawfully below the amount of the subsidy before the impact of COVID-19, pay the employee that amount.
  • The ordinary wages or salary of an employee are:
    • as specified in the employee’s employment agreement as at 26 March 2020; or
    • if you ended your employment relationship with any employee named in your application as a result of your business being adversely affected by the COVID-19 outbreak and have re-employed that employee on or after 17 March 2020, as specified in the employee’s employment agreement as at the date that employment relationship ended.

So be careful, document and be prepared for some interesting discussions with your staff.

Stay Safe and Be Kind,

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Operations

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Evan Lyon

Evan Lyon

KeyLink owner, 25+ years experience in designing, building and running mission critical IT systems. More than 12 years experience supporting and using payroll systems.

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