Armstrong Thompson remains open during the Level 4 lockdown. Our home offices allow us to continue to work as usual.
We specialise in representation of workers. We know that huge numbers of you are now facing change and uncertainty – and that you will have questions about your rights during the lockdown. We have addressed some crucial issues below, and are here to talk with you about any specific issues of concern.
The wage subsidy scheme essentially involves the Government paying money to businesses whose revenue has been affected by Covid 19. This money must be used for the benefit of workers – to ensure that workers continue to receive some income and are not made redundant.
Under the scheme the Government will pay employers at a flat rate of either $585.80 per full time worker (those who work 20 hours a week or more), or $350.00 for part time workers (those who work less than 20 hours). The affected worker may receive more or less than this amount depending on their normal wages, that is:
- If the worker would normally earn the same or more than the subsidy payment, then 100% of the subsidy payment must be passed on to the worker (plus any additional amount the business is able to afford, to top up the worker’s pay to his/her normal wage).
- If the worker would normally earn less than the subsidy payment, the employer only needs to pay the worker’s normal wage. The difference between the worker’s normal wage and the subsidy payment must be used to pay other affected staff – i.e. the employer cannot use the difference for any other purpose. This fits with the point of the subsidy, which is to keep workers connected to their jobs.
Employers must apply to Work and Income for the wage subsidy. The subsidy is paid to the employer as a lump sum, covering a 12 week period. There is no cap on the number of employees that an employer can get a subsidy for. To access the wage subsidy an employer must give certain undertakings, including that:
- They have experienced a drop in revenue of 30% because of Covid 19 (actual or predicted); and
- They will use their best endeavours to pay the particular worker 80% of his/her normal wage and pay at least the full subsidy to the worker.
Note that it is not mandatory for the employer to pay an affected worker 80% of his/her wage. If the business cannot afford it, the worker can be paid less – but at a minimum the employer must pass on all of the wage subsidy.
Crucially, whenever an employer accesses the wage subsidy they are not allowed to make the affected worker redundant, during the 12-week period to which the subsidy applies. The worker must remain employed – which gives that worker the chance to ‘see out’ the lockdown and then return to work once restrictions are lifted.
Currently NZ is at Alert level 4 for four weeks – as we all know, this timeframe may yet be extended or varied. During this period the employer may well wish to vary the amount of hours a worker is expected to work, depending on whether the business is ‘essential’, whether employees are able to work from home. Whilst that is entirely understandable, whenever workers agree to such variations there should also be an agreement that hours of work will be reconsidered as the alert level changes.
If an employer who has obtained the wage subsidy then withholds payment to the affected worker, that worker can lodge a personal grievance and/or report the employer. Workers can check whether their employer is receiving the wage subsidy as the Government intends to post on-line the names of every employer receiving the wage subsidy.
Lastly, wage subsidy payments passed on to workers are considered wages, and are therefore subject to the usual deductions such as PAYE, ACC levy, student loans and KiwiSaver contributions.
Workers rights under the Employment Relations Act continue, whether or not the employer takes the wage subsidy. The employer is obliged to follow the processes if the employer wants to change rates of pay or hours of work. Failure to do so, can give rise to a personal grievance against the employer.
It is important to keep in mind that the Holidays Act continues to apply, despite the Level 4 lockdown. In terms of annual leave, that means:
- In the first instance, employees and employers should agree on when annual leave is to be taken. Parties might agree that a worker can top up his/her wage subsidy payments using annual leave. If a worker asks to do this, the employer cannot say no unless there is a good reason to do so (such as the business not being able to afford it, currently).
- If an employer and employee cannot agree on when annual leave is to be taken, the employer can then decide. However – the employer must give 14 days’ notice of any requirement to take annual leave. This notice period will be important wherever an employer seeks to force workers to take annual leave during the current lockdown period.
The employer cannot require a worker to take sick leave unless that worker (or a member of their family) is sick. That is the normal rule, and it continues to apply.
Redundancy, during any period for which the wage subsidy is an option, might well be hard for an employer to justify. If the employer would be able to keep the worker employed using the wage subsidy, redundancy shouldn’t be on the table. In other words, an employer seeking to make a worker redundant would have to show that the wage subsidy would make no difference to the viability of the business.
As per usual, an employer proposing redundancies must follow a fair process (including following any requirements set out in the employment agreement).
ACC remains operational, along with Fairway Resolutions (who carry out review hearings). The District Court also remains open, for filing of appeals against review decisions.
It is therefore crucial that all ACC claimants looking to challenge either 1) a decision from ACC, or 2) a review decision, comply with the relevant timeframes (3 months to lodge a review application, 28 days to file an appeal against a review decision). Those deadlines continue to apply.
ACC cover and entitlements are open to those who contract Covid 19 in the course of their work – so long as their work places them at a significantly greater risk of contracting the virus. This would likely apply to such workers as medical staff, carers, airline staff etc. Unfortunately ACC cover will not be available for people who contract the virus outside of their work.
When you return to work (or if you are continuing to attend work in an ‘essential’ business during the lockdown) your employer must engage with you in relation to how risks to your health can best be managed.
We remain open to assist with ACC and employment matters. We continue to take legal aid clients for ACC – the Legal Services Agency continues to function.
New clients contact Becca Boles – 027 333 3054
Hazel Armstrong – 027 472 1793
Ben Thompson – 021 880 653
Hope Farquhar – 027 713 5841
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Why choose Armstrong Thompson Barristers and Solicitors?
Armstrong Thompson is a specialist law firm, with offices in Wellington and Tauranga, New Zealand. We specialise in accident compensation (ACC) law, and also act for clients in health and safety law and employment law. Armstrong Thompson’s staff understand that ACC, employment and health and safety disputes can be distressing, and we work closely with you to resolve your issues with as little difficulty as possible. We are willing to act for you in your ACC, employment and health and safety law issues no matter where in New Zealand you live.
Armstrong Thompson has a high level of success in resolving ACC, employment and health and safety issues. Hazel Armstrong, the firm’s principal, has been resolving ACC disputes for over a decade, and is the Spokesperson for the ACC Futures Coalition, which aims to uphold the integrity of New Zealand’s accident compensation scheme. We’ve also worked closely with unions on issues such as ACC, employment disputes, contract drafting and health and safety consultation.
Armstrong Thompson believes in providing clients with clear and practical advice. We understand that engaging in legal disputes can be stressful, so we aim to make the resolution process as clear and stress-free as possible. We act for clients from all around New Zealand.
We are aware that hiring a lawyer can place a financial strain on those in disadvantaged positions, which is why Armstrong Thompson endeavours to keep our fees competitive. We are also registered legal aid providers, meaning we can provide legal services to those unable to fund their own case. We also have fee agreements with several unions around the country.