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Another Lockdown

Published 10 Feb 2021

We have talked about being change resilient in the past, but Covid-19 appears to be pushing employers into being uncertainty resilient now.  Having worked through the major upheavals of 2020 and “enjoying” the benefits that come from our geographic isolation, we are now being warned about more virulent and potent strains of the virus that are developing overseas.

While we can all be very concerned about the development of the virus and its potential impact, should it establish itself in New Zealand, we can use the time we have and the experiences gained, to be better prepared.  You need to consider the options available to the Government to manage these new strains even with a very active vaccination programme in place.  Further restrictions on operating your business must be considered as a very likely scenario.

You will need to look at your business, your supply chain or your market, and develop an action plan to live in these uncertain times. There will be a raft of issues to take into account such as financial position, inventories, logistics, etc. and, if the last lockdown taught us anything, a big focus is needed on your employment policies and practices.

The Government has already indicated its intention about wage support in any future lock-down (a wage subsidy if a 40% loss of income happens compared to the 6-week period prior to a lockdown).  We do know from experience that some of the responses made by employers last time have not and will not be supported when challenged within our employment law environment. The important point to note is that a Government directed lock down does not change any obligations under current employment law.

If a pending or actual lock down leads you to consider changes to staffing numbers, hours or days of work, levels of wages or salary, changes to location of work (i.e. working from home) or anything that may impact on your employees, you are required to follow a good faith process.

By way of example, Section 4 of the Employment Relations Act 2000, dealing with “good faith”, provides that -
The duty of good faith in subsection (1) applies to the following matters (extract of Section – this is not an exhaustive list):
(d)         a proposal by an employer that might impact on the employer’s employees, including a proposal  to contract out work otherwise done by the employees or to sell or transfer all or part of the employer’s business
(e)          making employees redundant

Having a strategy thought out and provisions within your employment arrangements are the best thing that you can do right now.  A pandemic or similar clause in your agreement could enable you to respond faster to a lock down to protect your business interests and to provide clarity to all parties as to what arrangements can or will be put in place. Having discussions now to cover options open to you and your employees to protect jobs in the longer term will enable agreed processes to be implemented when needed.  Being prepared now will result in better outcomes.

If you have any questions or want further advise on how to get ready, from an employment relations perspective, please contact us now.