Alert Level 3 – What this Means for Businesses

On Monday 21 April 2020 Prime Minister Jacinda Ardern announced that 11.59pm on Monday 27 April 2020 would be the end of New Zealand’s nationwide lockdown at Alert Level 4. We will then spend at least two weeks at Alert Level 3, which she stated would make a significant difference to New Zealand’s economy.

At Alert Level 3, non-essential businesses may resume their operations under certain conditions. We encourage you to seek legal advice in the implications of resuming operations under level 3, in particular to address your obligations under the Health and Safety at Work Act 2015:

Returning to Work

• If workers are able to work from home they must continue to do so.

• If workers cannot work from home they may return to the workplace if businesses are able to operate safely.

• In-home services e.g. furniture removals or tradespeople for repairs or installations, but must still observe hygiene and social distancing practices.

• Bars, restaurants, cafes, malls, retail stores etc. must remain closed but can undertake home deliveries.

• Online shopping, drive-through, food delivery, click and collect etc. can reopen.

• Supermarkets, dairies and petrol stations can continue to operate as per the restrictions and measures under Level 4.

• Businesses cannot offer services that involve face-to-face contact e.g. hairdressers, house-cleaning etc.

• For more details visit https://www.business.govt.nz/covid-19/workplace-operations-covid-19-alert-levels

Travel for Work

• Workers may travel for work within their region or to a neighbouring region.

• Only essential workers may travel between non-neighbouring regions and only if it is necessary to undertake essential work.

Safe Operation

• Businesses may only operate if they can do so safely. There are three layers to safe operation:
  • Compliance with Government’s requirements during each Alert Level;
  • Compliance with Public Health requirements e.g. use of PPE, social distancing etc.
  • Usual Health and Safety obligations.

• Clients/customers are not allowed on your work premises and you cannot have face-to-face contact with customers.

• Social Distancing requires 2m of separation in uncontrolled environments such as in public spaces. At the workplace: if you cannot have people 2m apart at work, more than 1m is ok, provided there are other measures in place to protect your employees e.g. use of PPE, regular cleaning regimes, barriers etc.

• Stress is a risk that needs to be managed. Stress levels will be high during these uncertain times. Discuss with your staff ways you can support them during this time.

• You must keep accurate records of people who attend work and of groups of workers who work together in order to assist with contact-tracing, if this becomes necessary.

• Note for Retailers, Manufacturers and Service Industries: You do not need to use PPE in the workplace unless you used it prior to COVID-19.

• For more details visit https://worksafe.govt.nz/managing-health-and-safety/novel-coronavirus-covid-19/transitioning-from-alert-level-4/

COVID-19 Safety Plans

• You must write a COVID-19 Safety Plan – your workers should also be involved in creating this plan and you must share this plan with everyone who will attend the worksite (including contractors and suppliers) prior to commencing work.

• You need to regularly review/update this plan.

• Consider the following questions posed on the WorkSafe website:

• Are there any risks arising from restarting your business or a business activity that has been shut down during Alert Level 4, and how will you manage these?
  • E.g. maintenance for machinery and/or ventilation/air-conditioning unused during Level 4, having the right people with the right skills available etc.

• How will you ensure all workers know how and are able to keep themselves safe from exposure to COVID-19?
  • E.g. posters/information sheets, how you will conduct team meetings, keeping information up to date etc.

• How will you gather information on the wellness of your workers to ensure that they are safe and well to work?
  • E.g. checking in with staff, mandatory medical examinations, flexible leave/work arrangements etc.

• How will you operate your business in a way that keeps workers and others safe from exposure to COVID-19?
  • E.g. consider who needs to come to the workplace and who can work from home, whether PPE is needed and if so, how people will be trained to use it correctly, whether physical barriers are needed, cleaning regimes, staggered rest/meal breaks etc.

• How will you manage an exposure or suspected exposure to COVID-19?
  • E.g. ensuring a register for site visitors is kept accurate and up to date, supervision of irregular visitors e.g. suppliers/contractors etc.

• How will you evaluate, and continuously review, whether your work processes or risk controls are effective?

• How do any changes impact on the risks of the work you do?
  • E.g. increased stress and/or fatigue for workers, issues with transportation or childcare etc.

You should also check specific guidance for your particular industry in order to assist you with your COVID-19 Safety Plan and how to implement the relevant public health measures.

For more information on COVID-19 Safety Plans visit https://worksafe.govt.nz/managing-health-and-safety/novel-coronavirus-covid-19/your-covid-19-safety-plan/

Possible Employment Issues

• It is important to remember that our usual Employment Law has not changed. You still owe your usual obligations and duties, including the duty of Good Faith, to your employees.

• What if an employee is unable to work from home but refuses to come to work?
  • First, discuss the issue with the employee and find out why they are unable to return to work. They may be feeling stressed or anxious about the risk of contracting the virus, or they may have a vulnerable person in their bubble, or they may be concerned about childcare. Find out the reason and see if you can work through this so the employee may return to work.
  • If the employee continues to refuse to come to work without a good reason, a more formal process may be required. We advise that you seek legal advice before commencing any process.

• What if I still can’t afford to pay my employees 100% of their salary/wages?
  • Employees should be paid as normal for each hour that they work. However, we understand that this just may not be possible yet for many businesses.
  • The COVID-19 Wage Subsidy provides payment for employee salary/wages for 12 weeks. Depending on when you applied for the subsidy, this period should carry you through Level 3 and possibly into Level 2. During this time you must endeavour to pay employees at least 80% of their usual pay, or if this is not possible, the value of the subsidy.
  • If employees return to work and you are still unable to pay their full remuneration, you will need to discuss this with them. Consider negotiating for them to work reduced hours for a period, if you have not done so already.
  • Remember to record any agreements changing remuneration/hours/other working conditions in writing.

• Can I undertake a restructure and make some staff redundant in order to save some money?
  • If you applied for the Wage Subsidy after 4pm on 27 March 2020, you will be in breach of your obligations under this scheme if you make any staff named in your subsidy application redundant during the 12-week period for the subsidy. If you applied before 4pm on 27 March 2020, you must still make your best endeavours to retain the staff named in your subsidy application.
  • Once the 12-week period is finished, you will not be in breach of your subsidy scheme obligations if you make staff redundant. We advise that you seek legal advice prior to commencing any restructure process.

• Can I terminate my staffs’ employment under on a “force majeure” clause due to COVID-19 and resulting lockdown?
  • This will depend on what is written in your employment agreement and you must be able to show that the termination was directly caused by the virus and lockdown.
  • Read our article for more information on Force Majeure clauses. We strongly advise that you seek legal advice prior to terminating an employment relationship on these grounds.

Please note that we are still at Alert Level 4 until 11.59pm Monday 27 April 2020 and the Level 4 restrictions are still in place.

We understand that there is a lot to think about as we prepare for Alert Level 3. Saunders & Co Lawyers are available by phone and email to provide legal advice and guidance on a range of matters. For more information and specific legal advice on your employment relations and health and safety obligations please contact the employment team.