COVID-19: Revisiting Alert Level 3 and Alert Level 2 – the implications for employers

17 August 2020

​​​​In this update, we recap the key legal issues for employers under Alert Level 3 and 2, and provide an update on the new Wage Subsidy Scheme arrangements in place to address the latest COVID-19 “resurgence".

Working arrangeme​​nts

The impact of Alert Levels 3 and 2 on working arrangements depends on the nature of the employer's business and the way that employees normally conduct their work.

At ​​​​​​Alert Level 3

Employers whose business requires close physical contact cannot open at Alert Level 3.

For employers whose employees can work from home, those work-from-home arrangements are strongly encouraged.

Employers that can safely open and operate their workplaces (see our recent artic​le he​re) are allowed to do so at Alert Level 3 – but it is not “business as usual". In particular, employers need to implement specific hygiene and safety measures before allowing their employees (or anyone else) into the workplace. These measures include not allowing customers to come onto the premises, maintaining basic hygiene measures, physical distancing between staff, and using face coverings if appropriate.

At Alert Level 2

At Alert Level 2, all businesses can operate if they can do so safely. This requires physical distancing, and maintaining hygiene standards and contact registers at all places of work.

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.

Good communication at all Alert Levels

At both Alert Levels, employers should communicate clearly with employees to provide reassurance that, if they are required to access the workplace for their work, appropriate measures have been taken to ensure safety.

Employers must have 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. 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.

COVID-19 safety plan

According to WorkSafe guidance, employers should also develop and adhere to their own comprehensive COVID-19 safety plan for operations. A COVID-19 safety plan should answer the​ questions:​

  • How will the employer gather information on the wellness of workers to ensure they are safe and well to work at each Alert Level?
  • How will the employer manage an exposure or suspected exposure to COVID-19?
  • How will the employer continue to review and monitor work processes or risk controls?

A key consideration for a COVID-19 safety plan is how employers can ensure that their employees maintain physical distancing. Employers may need to review employees' shift patterns, working hours, types of work performed, and work locations in order to comply with these measures. For example, physical distancing requirements may require employers to create new shift patterns, allow rolling rest and meal breaks, and set earlier start and later finish times, so that employees can safely perform their work across each day.

Changes to terms of employment a​​​nd pay

Where employers wish to make changes to employees' hours of work, remuneration, or duties to reflect the practical reality of operating (or not) at Alert Level 3 or 2, this will likely need to be agreed with employees in good faith (depending on the relevant employment agreement in place).

In some cases, the relevant collective or individual employment agreements may provide sufficient flexibility to implement such changes in response to the change in Alert Levels. However, if the employer seeks to impose significant changes or the relevant agreements are not sufficiently flexible, then temporary variations will likely need to be agreed with employees in good faith.

Even if variations are not required, employers and employees (and unions, where applicable) should work together, in good faith, to determine the most appropriate approach to these issues.

Potentially, some form of “stand down" may be required (for example, where an employer either cannot operate or chooses not to operate at Alert Level 3), but this will likely need to be agreed.

Employers may also seek to agree that employees take paid leave (such as annual leave or alternative holidays). Employees can only be directed to take such leave after prior attempts to agree and with 14 days' notice.

Recent case law from the Employment Relations Authority following the first lockdown period has been adverse to employers that sought to implement wage reduction measures over that period. While each case is fact-specific (and there is not yet any decision from the Employment Court on the application of the “ready, willing and able to work" concept to the first lockdown), these early cases reinforce that employers should be cautious in withholding employees' pay unless they have clear agreement from their employees which allows them to do so.

COVID-19 resurgence wage su​​​bsidy scheme

From 1pm on 21 August 2020 until 3 September 2020, eligible employers will be able to apply for the recently-announced COVID-19 Resurgence Wage Subsidy (Resurgence Wage Subsidy). The Resurgence Wage Subsidy is available for employers who are financially impacted by the resurgence of COVID-19 and changes in Alert Levels.

To be eligible for the Resurgence Wage Subsidy, the business must have experienced or forecasted at least a 40% decline in revenue for any 14-day period between 12 August and 10 September 2020 (compared to a similar period last year). The decline in revenue must be due to COVID-19.

An employer is not eligible for the resurgence wage subsidy if it is already receiving the existing wage subsidies or the COVID-19 Leave Support scheme (see further information below).

An employer seeking the Resurgence Wage Subsidy must also take active steps to mitigate the financial impact of COVID-19, must retain its staff in respect of whom it applies and “try [its] hardest" to pay staff at least 80% of their usual income during the period that it receives the subsidy. The rates of payment are unchanged from previous versions of the wage subsidy scheme, at $585.80 per week for employees working 20 hours or more per week, and $350 per week for employees working less than 20 hours per week.

Other guidance relevant to both ​Alert Levels

Employee o​​​​​​bligations

Under the Health and Safety at Work Act 2015 workers must take reasonable care for their own health and safety, and ensure their actions do not adversely affect the health and safety of others.

Workers should not come to work if they are sick with cold or flu symptoms, and this requirement should be strictly enforced.

“At-risk" employees

The Ministry of Health guidance continues to indicate that there are some people who are at higher risk of severe illness from COVID-19. At both Alert Levels 3 and 2, people who are at higher risk may talk to their employer about a risk assessment in the workplace to assess whether it will be safe for them to return to work. They are allowed to attend work if they can do so safely.

COVID-19 Leave Support scheme

If it would not be safe for an employee to attend the workplace (or if they are required to self-isolate), and they cannot work from home, their 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 related to COVID-19.

From 1pm on 21 August 2020, those revenue tests will no longer be required in order for a business to apply for COVID-19 Leave Support. The COVID-19 Leave Support scheme will therefore be more accessible to a wider range of employers.​

Before applying for this scheme, an employer must have discussed the application with affected employees, obtained their consent, and explored various other ways to support them (e.g. paid leave options).

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.

To view our other COVID-19 related publications, click here.

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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.