The New Zealand government moved the country to Covid-19 Alert Level 4.
That meant all non-essential businesses were required to close. New Zealand is now in lockdown. Non-essential businesses may need to explore options for work and pay for their employees during their closure. For businesses falling outside the essential services criteria, we provide general guidance below. You should check your employment agreements before making any decisions. For any businesses affected by Covid-19, whether essential services or otherwise, the key message from the government appears to be:-
- Apply for the wage subsidy scheme if your business is closed or affected.
- Use the wage subsidy scheme to avoid redundancies.
- Keep your employees attached to you, keep them employed.
Very likely, you will be able to access government assistance to help you maintain pay for employees (whether working from home, or not working) due to a temporary closure. There is a government wages subsidy. There are also tax breaks and other assistance. We recommend you explore all available options.
Government wages subsidy
Businesses must meet certain criteria to qualify for the government wages subsidy. Information about the wages subsidy can be found on the website:- https://www.business.govt.nz/news/coronavirus-information-for-businesses/
Good faith obligations
Employers must engage with employees in good faith. this means being active and constructive and open and communicative. Employees should be given relevant information about any changes you are proposing to their pay or hours or use of leave entitlements and an opportunity to give feedback about that, before decisions are made. In many cases, their specific agreement will be required. We can provide advice about your specific situation.
Ending of employment: the government message is to keep your employees with you
Most businesses should be able to avoid redundancies until the lockdown period and wages subsidy period ends. Avoiding redundancies is a key purpose of the government wages subsidy. The business’ financial situation and work levels can then be assessed once the subsidy period has ended. The usual legal requirements for any restructuring will apply.
If you require specific advice, Rice Craig is “open for business”. You may email Rani Amaranathan for employment law advice email@example.com.