With the recent move to level 3, and impending level 2, more and more employees will be returning to their place of work. For many of these employees, gone are the days of extended periods of leave or working from home.
With the Prime Minister’s announcement on level 2 scheduled for Monday, the earliest we could see level 2 is after 11:59pm on Wednesday, 13 May 2020. Naturally, employees will still be concerned about the risk of COVID-19. There are still cases out there and so too the risk of catching the virus. With this in mind, we are seeing an increasing number of employees refuse to return to work. This could be due to any number of reasons, and may become more prominent in level 2, but nevertheless, this has a significant impact on an employer’s ability to operate during these times.
This is certainly a commercial dilemma, and we set out the legal position for these employees in this article.
Generally, an employee who is not ready, willing and able to work, is not entitled to be paid. It follows that an employee who refuses to perform work which is available, is not ready, willing and able. That said, this may require a review of the employee’s employment agreement to ensure that they are not otherwise entitled to be paid in these circumstances.
Whilst an employer may be able to legitimately stop paying an employee in these circumstances, an employer’s obligation to continue to pay the wage subsidy is less clear. Unlike wages or salary, an employee is not entitled to receive the subsidy. Instead, an employer who receives the subsidy has obligations it must meet in relation to the subsidy.
Whether an employer’s actions will be compliant with their obligations under the subsidy will ultimately be dictated by their particular obligations (pre or post 4pm on Friday, 27 March).
If an employer applied for the subsidy before 4pm on 27 March, a “best endeavours” assessment will be required to determine whether the employer could cease passing on the subsidy to employees who refuse to perform work. In some circumstances, there may be a reasonable argument that an employer could cease to pass on the subsidy.
If an employer applied for the subsidy after 4pm on 27 March, we do not consider there are any circumstances where the employer could stop passing on the subsidy to the employee.
Notwithstanding the above, there may be other Government support schemes available to employers depending on their circumstances.
In any event, employers are required to notify the Ministry of Social Development (MSD) of any changes in circumstance, which may affect the employer’s eligibility or ability to meet their obligations under the subsidy. We consider that an employer would be required to notify MSD of any proposal to not pass on the subsidy to an employee.
COVID-19 discount for clients
At Jennifer Mills & Associates, we are experts in employment, immigration and health and safety law. In light of the difficult economic landscape, we are currently offering a discount to all clients in response to COVID-19. We are also able to provide an advisory service for all employment, health and safety and immigration law matters. We are able to provide this as a monthly service and can work with managers to implement effective and efficient strategies for their businesses.
If you would like to know more about this special service and our COVID-19 discount, please get in contact.