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Consequences of COVID-19 starting to show

During the COVID-19 lockdown and beyond, many employers have resorted to reducing employees’ pay – some with, and some without, consultation and/or agreement.  It all happened so quick, it was all so new and unfamiliar, and many employers understandably made some rather swift changes to better position their businesses to survive.  We are now seeing some of the consequences coming through the employment institutions, with a few cases coming out of the Employment Relations Authority that are giving some serious cause for concern!

Ready, willing and able to work

These cases centre around the principle that in order to be paid, employees need to be ‘ready, willing and able’ to work.  Many employers have taken the position that during the COVID-19 lockdown, employees were not ‘able’ to work, and as a result they were discharged from their normal obligations to pay wages and salary in accordance with the relevant employment agreements. However, while that may apply in some circumstances, we are now seeing is that is not necessarily the case!

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An update – trial periods and payments in lieu of notice

An interesting trial period case has been considered by the Court of Appeal recently with surprisingly positive results for employers!  Making payments in lieu of notice when terminating an employment agreement under the trial period has always been risky.  The law surrounding this practise has been unclear, and we have always advised against it.

However, in the case of Loan v Scott Technology NZ Ltd, the Employment Court examined the unique circumstances of this trial period dismissal and found that the payment made in lieu of notice satisfied the requirements of ‘giving notice’ for the purposes of section 67B(1) of the Employment Relations Act.  The Court of Appeal agreed.

Continue reading → An update – trial periods and payments in lieu of notice