Employment law not cancelled by Covid-19
The Employment Relations Authority has issued two important decisions regarding actions taken by employers in relation to Covid-19. In both cases, the employer had signed up for the wage subsidy. Employers and employees may be wondering whether actions taken during alert levels 1-4 were lawful. Cases turn on their facts, please contact us if you would like legal advice.
Rulings from the two decisions can be summarised as follows:
Employers were not able to unilaterally vary an employee's terms of employment, including wages and notice. Failure by an employer to pay full or part payment of wages due under an employment agreement was a deduction within the meaning of the Wages Protection Act 1983; accordingly, such a deduction required employee consent. (Raggett and Ors v Eastern Bays Hospice Trust t/a Dove Hospice [2020] NZERA 266).
Employers were required pay employees at least the minimum wage in accordance with the Minimum Wage Act 1983 if they were “ready, willing and able to carry out their function.” It was not possible for parties to an employment relationship to agree to contract out of the Minimum Wage Act 1983; accordingly, any agreement to be paid less than the minimum wage would be unlawful and unenforceable. (Sandu (and others named in the schedule) v Gate Gourmet New Zealand Limited and Anor [2020] NZERA 259). Important update: This case was decided differently in a judgment of the Employment Court in Gate Gourmet New Zealand Limited and Ors v Sandhu and Ors [2020] NZEmpC 237, issued on on 21 December 2020. Please see my article on 2 February 2021 regarding this decision.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.