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Spotlight on employee payments under lockdown

With the Ministry of Business Innovation and Employment overrun with employment disputes arising out of the COVID-19 response, decisions have begun to emerge from the Employment Relations Authority answering some important questions regarding the correct approach to the impact of lockdown on employee entitlements.

In our recent News Alert we discussed three polarising Employment Relations Authority decisions on how employees should have been paid over the lockdown. You can read further about these decisions here.

To the relief of many employment lawyers, one of these decisions has now been appealed to the Employment Court on, “the application of the Minimum Wage Act 1983 to employees who did not carry out work during the Alert Level 4 lockdown (but were otherwise ready and willing to work) and were being paid 80 per cent of their normal pay with the support of the Government’s wage subsidy scheme.”

Amongst other matters, a full Employment Court will be asked to determine whether essential workers who were not offered work because of a decrease in business were ready, willing and able to work and therefore entitled to be paid at least the minimum wage for their agreed (guaranteed) hours, as stipulated in their employment agreements.

Both Business New Zealand and New Zealand Council of Trade Unions have successfully applied for leave to be heard in the Employment Court case as interested third parties. The full Court hearing is set down for one day in Auckland on 13 October 2020. We are hopeful that it will provide much needed clarity in respect of a matter that has divided employment lawyers across the country.

Watch this space.