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COVID-19 - What are employers' obligations?

By Claire Mansell - 16 Mar 2020

As COVID-19 continues to sweep across the globe, many employers are contemplating the potential effects on their businesses, not just from a down-turn in trade but the very real possibility that they may end up with multiple staff absences over an extended length of time. Below we answer some of the common questions our employer clients are asking.

Am I required to allow my employees to work from home?

This will depend on the nature of the employee's role. Under Part 6AA of the Employment Relations Act 2000, employees have a statutory right to make a request for a variation of their working arrangements, including the ability to work from home. Employers have a month to consider the request. The Act sets out the reasons why a request may be denied, including:

  • inability to reorganise work among existing staff
  • inability to recruit additional staff
  • detrimental impact on quality
  • detrimental impact on performance
  • insufficiency of work during the periods the employee proposes to work
  • planned structural changes
  • burden of additional costs
  • detrimental effect on ability to meet customer demand.

If the employer cannot justify denying a request on one of the above grounds, the request must be granted. Employees should be paid normally while they are working from home.

If you are going to allow working from home, it would be prudent to introduce a policy which sets out who can work from home and under what circumstances. This ensures that employees are treated equally. Treating some employees more favourably than others can give rise to a disadvantage claim (i.e. if one team is allowed to work from home, but not others in the same role).  As with any policy, this should be introduced after consultation with employees.

Do I need to shut down my workplace?

As at the time of publishing this blog, there is no guidance from the Ministry of Health that workplaces need to shut down. However, employers need to bear in mind that they have obligations to maintain a safe workplace under Health and Safety at Work Act 2015. If the advice from the Ministry of Health changes in the coming days/weeks, employers may be required to close completely or operate under restrictions.

In the meantime, employers are required to take all reasonable steps to minimise the risk of COVID-19 spreading. This includes preventing employees returning to the workplace if they are ill or are suspected to be ill with COVID-19, or if they have been advised to self isolate in accordance with Ministry of Health guidelines. In addition, employers should not require any employees to undertake any non -urgent international travel.

Do I need to pay my employees while they are in self isolation?

Employees who are sick or are caring for a spouse or dependant who is sick, are entitled to sick leave in accordance with the Holidays Act 2003. The Act provides for a minimum statutory entitlement of 5 days per year which can accumulate up to 20 days. If an employee does not have sufficient sick leave entitlements to cover their absence they may wish to take further leave, such as annual leave. An employer does not have to comply with a request to use annual leave in lieu of sick leave, but must not apply annual leave without the employee's consent.

If an employee is absent from work for reasons related to COVID-19 (such as enforced self-isolation on return from overseas) but they are not actually ill, then they are not entitled to sick leave under the Holidays Act. Most employment agreements mirror the Act in this respect however it is ultimately up to the discretion of the employer as to whether it agrees to additional leave. If this is the case (and the employment agreement does not provide for it), any such agreement should be recorded in writing.

Employees who are in self isolation may be entitled to the COVID-19 Leave Payment recently announced by the Government. This payment is available to those whose are in self-isolation in accordance with Ministry of Health guidelines (and who have registered with Healthline), ill with COVID-19, or caring for someone with COVID-19. Employees are entitled to $585.80 pwer week if they work 20 hours or more per week or $350.00 per week if they work less than 20 hours per week. These payments are available for the 14 day period (if in self-isolation) or for the period that they or their dependent is ill with COVID-19. The payment is made directly to the employer who must pass it on to the employee. This payment is not available to those who travel overseas after 16 March 2020.

Finally, some employers are contemplating the possibility of having to shut the doors for a period as part of a health and safety management plan or, due to government mandated action. In this scenario, where employees are prevented from working by reasons beyond their control (but are otherwise ready and willing to work), most employees would be entitled to be paid as usual unless there is agreement otherwise.

However, given that some workplaces may face closure for an extended period of time, employers may need to consider redundancies or ending the employment relationship in accordance with any force majeure clause (if there is any in the employment agreement). In either case, a consultation process must be followed.  We recommend that we review your employment terms before you commit to this action.

What happens if an employee chooses to travel overseas and is subsequently placed in self isolation?

If an employee has already booked annual leave overseas and is subsequently placed into self-isolation, the employer and employee should discuss (in good faith) how the self-isolation period should be managed. Options may include working from home, taking further annual leave or unpaid leave.  If no agreement can be reached, the employee should be directed to stay away from the workplace and advised that any such leave will be unpaid unless agreed otherwise.

As of Sunday morning, the government has new border measures requiring most passengers returning from overseas to self-isolate for a period of 14 days. Employees who have planned overseas travel must now factor the self-isolation period into their leave requirements. A clear policy or open discussions with employees about how compulsory isolation will be managed will allow employees to make informed choices about whether or not to travel at this time.


The coming weeks will be tricky times for employers and employees alike as we plan and respond to the COVID-19 outbreak. If you require any assistance, or have any questions arising from this blog, please contact our employment team.


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