BEFORE you take any action involving your business or staff, use the checklist below to ensure you have all of the information you will need to make an informed decision.
Remember, regardless of the situation during a pandemic, employment law still applies, and personal grievances are a genuine threat to your business at this time and beyond.
Have you got an accurate cashflow forecast?
Having a cashflow forecast of your future income and outgoings is not only essential to help maintain your business through the lockdown and beyond but you will need it to substantiate any decisions you make regarding staff. If you need to apply for the government’s wage subsidy, cut the hours or pay of your staff, redeploy them or even make them redundant you will need to show that you have genuine and verifiable reasons for doing so.
When the Covid-19 pandemic is over there will be a reckoning when the government looks at who it paid money to and the actions taken by employers towards their employees.
Check your Employment Agreements
Look at the employment agreements for each of your employees to see what relevant clauses may apply during the lockdown and the various stages of alert levels.
Clauses to look out for include:
Force Majeure – Do you have a clause covering a pandemic. If you do, you need to be careful that the clause is actually lawful and enforceable in the circumstances. For example, a clause that says, “in the event of a pandemic and where the company is not able to operate, the employee will not be paid salary during this time”.
Closedown of plant and business
Where your employment agreements have a clause about annual closedown, you will need to look at the wording and the aim and intent of the clause. In most situations this clause is used predominantly during the Christmas holiday period or where a plant is shut down for scheduled maintenance. You cannot use it as a blanket shut down of business for an indefinite period, especially where staff are not being paid and have no annual leave.
Frustration of Contract
Frustration of contract arises where an employee for some reason is unable to fulfil the terms of their employment agreement. Outside of Covid-19, examples of this usually include long-term sickness, an employee going to prison or being on home detention or an employee losing their drivers’ license where there is a major requirement to hold one to perform their principal duties.
Even if you do not have a clause citing frustration of contract in your employment agreements, you may still be able to cite Frustration of Contract as long as the circumstances warrant it, you follow due process, consult with the employee and work in good faith.
Location of work
It is a requirement of employment law to stipulate the place of work of an employee in the employment agreement. If you have an employee in Hamilton for example and you want to relocate them to another branch in Tauranga or Auckland, you should check the place of work in the employment agreement. If it does not specify the new location you will have to consult with the employee, give them a written variation of conditions to their current employment agreement and have then accept this change in writing.
If you wish to substantially change the duties of an employee, you will need to look at their job description. The clause that says “and other duties as required” is not a get out of jail free card. The employee needs to have the correct level of capability and training to do the job. Common sense applies here. If you have an employee who has a predominantly admin role assessing insurance applications and you have to move them to doing another largely admin role filing documents, then as long as the employee is being paid the same wages it is not unreasonable to ask the employee to undertake the new duties. Conversely if one your employees works in accounts for a courier firm and you ask them to drive a delivery van, this would likely not be considered a reasonable request.
Variations of Conditions of Employment
If you change any of the conditions of employment of your staff you will need to update the employee’s employment agreement to reflect these changes. You can either give them a completely new agreement if you are making a number of changes or are updating it with newer clauses or you can give them a letter of variation of conditions to their employment. Whichever method you choose, you must always get the agreement of the employee in writing by having them sign the letter or new employment agreement.
Have you got a Health and Safety Plan?
The Health and Safety in Employment Act requires you to have a Health and Safety plan relevant to the business you are operating, and the work undertaken by your employees. Remembering that we are not in a business as usual situation, you will need to ensure that your plan is updated and meets the requirements of the appropriate level of alert.
Things to consider include:
- Protecting your employees from possible infection with Covid-19
- enforcing social distancing with employees and customers
- providing ergonomic equipment for your staff to work from home
- ensuring the physical and mental well-being and security of your staff
- ensuring you have a plan Health and Safety plan for relocating your staff back to their principal place of work when the alert levels are lowered.
- What parts of your business are you realistically able to operate and who will undertake this work?