New Zealand businesses often face disruptions from emergencies such as fuel shortages, extreme weather, or public health crises. During these times, employers must maintain their good faith obligations while managing staff and operations. Practical planning and early consultation are essential to overcoming hurdles like commuting issues or stalled deliveries.

How should New Zealand employers prepare for anticipated disruptions?

Employers should begin by reviewing existing employment agreements and workplace policies to identify the level of flexibility available for changing work locations, hours, and rosters. This involves identifying which roles can transition to remote work and ensuring the necessary equipment and access are available.

Key preparation actions for workplaces

• Review employment agreements: Check for specific clauses regarding business interruption or flexible work locations. Consider whether current clauses allow for a mandatory return to the office once the crisis abates, to avoid unintended permanent variations to work location.
• Assess infrastructure and costs: Confirm which employees have the tools required to work from home effectively. Consider establishing a clear policy on reimbursement of home-office utilities to provide certainty and avoid later expense claims.
• Develop practical alternatives: Explore carpooling, staggered hours, or temporary redeployment to different sites. Set defined review dates for temporary measures to allow the business to reassess if the crisis extends.
• Review leave protocols: Revisit processes for annual leave, leave in advance, and leave without pay to ensure they align with the Holidays Act 2003.
• Initiate communication: Establish early contact with staff. A crisis does not suspend the legal requirement to act in good faith.

What are the good faith obligations for NZ employers during a crisis?

Good faith obligations remain fully active during a crisis, requiring employers to be communicative, share relevant information, and genuinely consider employee feedback before making decisions.

The consultation process

1. Early engagement: Notify staff as soon as potential changes to work conditions are identified. Ensure the proposed changes are ones the employer is entitled to make following consultation.
2. Information sharing: Provide employees with relevant data about how the crisis is impacting the business, what changes are being proposed, and why.
3. Feedback: Seek feedback and genuinely consider employee suggestions or concerns before finalising decisions. In some cases, an invitation for a support person or representative will be required.
4. Documentation: Clearly document all changes to hours, duties, or pay to prevent future disputes.

What leave and pay options are available under the Holidays Act 2003?

When employees cannot attend work due to crisis conditions, the primary options include remote work, agreed annual leave, or in some cases leave without pay. Whether wages must be paid if no work is performed depends heavily on the specific wording of the employment agreement and the factual circumstances. Specific legal advice is recommended before stopping pay.

How should businesses handle specific staffing scenarios during a crisis?

Employers should prioritise exploring reasonable alternatives — such as different hours or sites — before considering pay deductions or relying on complex legal clauses. Legal concepts like frustration of contract or force majeure have high thresholds and are not simple solutions for crisis-related disruptions.

When is it necessary to contact an employment lawyer?

Employers should seek tailored legal advice before making significant changes to wages, directing annual leave, or initiating restructuring due to crisis situations. Early legal advice helps ensure compliance and reduces the risk of costly personal grievances.

• Wage or hour reductions: Any proposed downward change to contractual pay or hours.
• Directing leave: Forcing an employee to take annual leave without their consent.
• Contractual clauses: Attempting to rely on force majeure or business interruption wording.
• Restructuring: Starting a redundancy process where a genuine business rationale and full consultation are required.

Frequently Asked Questions

Can I force my employees to take annual leave if they cannot get to work?

Under the Holidays Act 2003, you must first try to reach agreement with the employee. If agreement cannot be reached, you can direct them to take leave by providing at least 14 days' written notice under section 19(2).

Do I have to pay employees who cannot attend work because they cannot safely travel?

Transport to work is generally the employee's responsibility, and there may be no automatic entitlement to wages if no work is performed. However, you must check your specific employment agreement and should consult with the employee to explore alternatives like remote work or agreed leave before stopping pay.

Can I make roles redundant if a crisis causes a drop in business?

Potentially, but the usual restructuring rules apply. You must have a genuine business reason, share all relevant information with affected staff, and conduct a full consultation process before making any final decisions. Cases from the Covid-19 pandemic suggest that redundancies may not be justified due to a temporary situation.

Is an emergency closure considered an annual closedown under NZ law?

Not automatically. An annual closedown under the Holidays Act 2003 typically refers to a period where work is customarily discontinued once per year — such as a Christmas break — and specific notice requirements must be met. An emergency closure does not meet this definition.

This article is intended for general information purposes only and does not constitute legal advice. For advice specific to your circumstances, please contact the team at Rice Craig.