COVID-19 Alert Level 2: Is your business prepared?

12 May 2020

The government has announced that New Zealand will move to Alert Level 2 ​on Wednesday 13 May 2020 at 11:59pm.

​This article was published on 12​ May 2020 and represents the legal position on this date. Due to ongoing developments, this guidance may no longer represent the correct position as of today. If you would like assistance on the below matter please get in touch with the contacts listed or your usual Bell Gully adv​iser. ​

Businesses including restaurants, cinemas, retail, and gyms will be able to reopen on Thursday with strict public health measures and physical distancing. ​

With Alert Level 2 on the horizon, we look at some of the practical issues that businesses will need to consider, including trading restrictions and the impact for employers and employees.​

Key points​

Can businesses open at Alert Level 2?
  • At Alert Level 2, all businesses can open their premises to the public provided specific requirements are satisfied. Bars reopened on Thursday 21 May.​
  • MBIE is currently developing sector specific guidance outlining the applicable public health requirements for each industry.
  • Hospitality businesses can only open their premises to customers if they can meet the three S's - seated, separated and service.
Issues for employers and employees under Alert Level 2
  • While all businesses can operate if they can do so safely, alternative ways of working are still encouraged where possible. This may mean having some employees continuing to work from home.
  • Employers should have a plan about how they will operate safely at Alert Level 2 and this should be documented and discussed with employees before they return to the workplace.
  • Where employers wish to make changes to employees' hours of work, remuneration or duties as a result of reduced demand, these changes should be agreed with employees.​​​

Can businesses open at Alert Level 2?

Under Alert Level 3, only those businesses that could operate “safely" were permitted to re-open, provided those businesses observed strict adherence to public health and physical distancing requirements. At Alert Level 2 all businesses, can open their premises to the public if the following requirements are satisfied:

  • There is a robust contact tracing system in place, which records every person who enters the premises.
  • Physical distancing of one metre is maintained between groups of customers.
  • The business is able to meet applicable public health requirements, including hygiene measures, physical distancing, hand washing, and regular cleaning.

The restriction on eliminating physical contact between employees and customers is lifted at Alert Level 2. This means businesses which involve close personal contact, such as hairdressers and beauticians, can re-open. Businesses operating in this sector are encouraged to implement a robust contact tracing system, maintain good hygiene practices, and limit contact to the extent possible. The government will issue guidance shortly about how workers employed in a role involving personal contact with customers can access, and should use, personal protective equipment.

MBIE is currently developing sector specific guidance outlining the applicable public health requirements for each industry. The necessary public health requirements at Alert Level 3 continue to apply during Alert Level 2. These include:

  • Regular disinfecting of surfaces – particularly “high-contact" surfaces such as Eftpos terminals and door handles,
  • Encouraging good hand hygiene by allowing frequent hand washing and sanitising,
  • Not having sick people in the workplace, and
  • Meeting physical distancing requirements.

In addition to the above requirements, hospitality businesses can only open their premises to customers at Alert Level 2 if they can meet each of the following requirements:

  • Seated – all customers must be safely seated. No more than 100 people can be seated at any time, regardless of the size of the premises.
  • Separated – physical distancing must be observed between groups of customers.
  • Service – all customers must be served at their tables (and ideally by a single server).

Hospitality businesses which cannot implement these requirements (e.g. nightclubs) are unable to operate at Alert Level 2.

Public venues such as museums, food courts, markets, gyms and public pools and parks can re-open at Alert Level 2, provided public health requirements are observed.

Issues for employers and employees under Alert Level 2

As was the case at Alert Level 3, the impact of Alert Level 2 will depend on the nature of the employer's business and the way that employees can conduct their work.

As outlined earlier, at Alert Level 2 businesses can operate if they can do so safely. This requires physical distancing, hygiene standards and contact registers to be applied at all places of work. However, businesses are also encouraged to use alternative ways of working if possible, with the guidance noting that businesses that don't normally have customers on their premises could continue to have staff working from home.

Each business will need to determine whether a return to the workplace can be safely effected for all or just some of its workforce. It is possible that a phased approach may be necessary, or some other alternative plan whereby only some of the workforce is allowed back onto the premises at any particular time to maintain phsycial distancing and make contact tracing easier.

It will therefore be important for employers to communicate clearly with their employees about the approach that they intend to take at Alert Level 2, and to provide reassurance to their employees that, if they are to return to the workplace, appropriate measures have been taken to ensure safety. This includes having a plan around common areas such as lifts and stairwells that can be accessed by people who are not part of the workplace. The plan should also provide information about how a contact register will be maintained and this should be communicated to employees before they return to the workplace. Employers may need to consult with other PCBUs that operate in the same building or workplace area, to ensure that there are no 'gaps' in the plan and that a co-ordinated approach is being taken in relation to common areas.

WorkSafe recommends that all employers document their Alert Level 2 approach so that this can be shared with others including customers and clients. A template is provided on the WorkSafe website, but it is important to consider the particular circumstances that apply for each business and to address these in the plan. WorkSafe has also produced specific guidance for particular industries at Alert Level 3, such as construction, education, and hospitality. This guidance may be updated to reflect the changes at Alert Level 2.

Employees also have obligations under the Health and Safety at Work Act 2015 to take reasonable care for their own health and safety, and take reasonable care that they do not adversely affect the health and safety of others. Employees should be reminded that they should not come to work if they are sick and this requirement should be strictly enforced.

The Ministry of Health guidance continues to indicate that there are some people who are at higher risk of severe illness from COVID-19. However the Alert Level 2 guidance states that people who are at higher risk may work if they agree with their employer that they can do so safely. If there is no agreement that they can do so, the employer may be eligible to receive support under the COVID-19 Leave Support Scheme which was introduced from 1 May 2020.

This scheme is open to employers (other than those in the state sector) who have had their ability to support employees who meet the criteria and need to take leave negatively impacted by the COVID-19 public health restrictions. It is also available to those who have experienced a minimum 30% decline in actual or predicted revenue over the period of a month when compared to the same month last year, and the revenue loss is due to the COVID-19 outbreak. Payments under this scheme cover a four-week period, but can be applied for more than once for each employee, and are paid at the same rate as the COVID-19 Wage Subsidy Scheme. An employer cannot apply for payments under both schemes for the same employee at the same time.

As with Alert Level 3 some workplaces may require a smaller number of staff than under normal circumstances (for example, restaurants and cafes which can serve fewer people given the requirement for all customers to be seated and for there to be an appropriate distance between each table). Where employers wish to make changes to employees' hours of work, rest and meal break arrangements, remuneration or duties as a result of this, these changes should be agreed with employees.

Some employers may now be considering the need to restructure their businesses. Any restructuring should comply with the employer's good faith obligations under the Employment Relations Act 2000 and any specific obligations contained in the relevant employment agreements. In addition, any employers that received the Wage Subsidy should retain those employees for whom they are obtaining the subsidy for the subsidy period. However, the Ministry of Social Development (MSD) has confirmed that where any employee is made redundant during the subsidy period, the Wage Subsidy can be used to pay for any notice period although it cannot be used to make any contractual redundancy payments to an employee. If there is any remaining amount from the Wage Subsidy it should be repaid to MSD.​

The Budget to be delivered on Thursday is likely to contain further information relevant to employers and employees. In addition, as has been the case each time the alert level has been changed, guidance on Alert Level 2 is still being developed. As we enter a new alert level it will therefore continue to be important for employers to keep abreast of any developments and to maintain open lines of communication with staff and unions to address the challenges that the new normal will represent.

If you have any questions about the matters raised in this article, please get in touch with the contacts listed, or your usual Bell Gully adviser.

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This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.