(Getty Images)
(Getty Images)

BusinessFebruary 16, 2021

No, your boss can’t ‘make’ you take annual leave over the lockdown

(Getty Images)
(Getty Images)

If you live in Auckland and your work is closed due to level three restrictions, and you can’t work from home, here’s what you need to know.

Three days is a long time to go without trade for most businesses. For a few of them with low margins, it could spell a knockout blow. Because the government at this stage has not introduced a wage subsidy for this lockdown, some business owners will instinctively look to cover costs; after all, their survival may depend on it.

Unfortunately, this can sometimes mean the costs fall on the employees. But whether it’s a Covid-19 pandemic or a contagious plague of hiccups, it’s no justification for an employer to undermine the robust agreement they sign with each of their employees.

So, if you’re an Auckland-based worker whose work is closed due to the lockdown, and you can’t work from home for whatever reason, it’s important that you’re aware of your rights as laid out in your employment agreement and various pieces of legislation such as the Holiday Act.

Can an employer make you take annual leave over the lockdown period?

“No one can be forced at short notice to take annual leave,” says employment lawyer Garry Pollak. “The Holidays Act does allow for an employer to give 14 days’ written notice that an employee is required to take annual leave following consultation not reaching an agreed conclusion and after taking into account the recreational needs of the employee and the interests of the business.”

This means that if your boss has this week “told” you that you’ll be taking annual leave over the next few days, you absolutely have the right to decline. If they consult with you and no agreement is reached, then they have to give 14 days before requiring you to take annual leave – by which point, we’ll all hopefully be out of lockdown and everything will be humming again.

However, if they reach out and open respectful dialogue with you and you consent to taking annual leave, then there’s nothing wrong with that. Employment New Zealand says that an employer could consider issuing short term “paid special leave” before looking at other options. Paid special leave, is non-legislated leave, subject to an agreement between employer and employee.

MBIE Screenshot

If an employee is usually rostered on a Monday, for example, can an employer suddenly change their day of work because of the lockdown?

It depends on the employment agreement. If your contract has set days of the week, and specifies that you’ll be working Monday, Tuesday and Wednesday, then an employer can’t just change that without consulting with you and seeking your agreement.

If your contract specifies a Monday to Sunday roster, then that allows your employer flexibility to change the dates of work. Some contracts may have a clause that allows an employer to change your hours of work, but this still requires consultation, feedback and a notice period.

What if my shift was cancelled because of the lockdown? Do I still get paid?

Yes, unless there is a clause in your contract which allows for shift cancellations. Even then it will stipulate a reasonable notice time. Again, your employer should act in good faith and consult with you to work out an arrangement.

Can an employer ask someone to resign because of the costs of the lockdown?

No. Even in a desperate situation, a business cannot dismiss an employee and needs to go through a redundancy process, consulting with staff and making a measured and fair decision.

Can an employer force you to take unpaid leave over the lockdown period?

This is a tricky one. If a business cannot operate over the lockdown, and therefore has no revenue, and an employee does not have any accrued annual leave or sick leave, and special leave options are not available, then an employer might be left with no choice than to require employees to take unpaid leave.

According to the Ministry of Business, Innovation and Employment, if a business has to close due to external circumstances, then it is not covered by legislation and it comes down to negotiation between employer and employee to figure out a temporary or emergency pay arrangement. If no agreement is reached, then leave without pay could be imminent. However, it always comes down to an expectation of good faith, whereby the employer is open, honest and communicative with their staff and prepared to work through any other options.

Garry Pollak says some businesses would have included a “force majeure” clause in contracts that allow for this.

“It means that when a business cannot operate due to act of God or pandemic or the like the obligation to pay is suspended. Many employers put clause like this into employment agreements after the Christchurch earthquake and last year’s big lockdown. New Zealand does not have a “furlough” law like other countries.”

Finally, why is there no wage subsidy for affected businesses?

Of course, all this highlights the importance of the wage subsidy to protect employees. It was government support that bolstered businesses throughout previous lockdowns, allowing them to continue paying their workers and keep them on the books. In the past, the government took responsibility for imposing the lockdown, and therefore elected to cover some of the costs.

This time round, the government has so far indicated that business support will be given if the rise in alert levels extends beyond 72 hours. According to a finance minister Grant Robertson, the newly introduced Resurgence Support Payment designed to support small businesses will apply only if the higher alert levels lasts more than three days, while the wage subsidy will apply if the level three or four period lasts seven days or more.

“A decision on whether this support will come into effect will be made if there is an extension to the 72-hour increase in alert levels announced on Sunday night. If it does come into effect it will cover the initial 72-hour alert level rise as well,” Grant Robertson said.

Retail NZ chief executive Greg Harford says three days is too long to leave small businesses without trade or support.

“Retail NZ is calling for the government to act urgently to introduce a business support package to help retail and hospitality businesses survive the next three days. Three days sounds like a relatively short time, it is very difficult for businesses to pay their teams without support. Margins are wafer-thin at the best of times, many businesses have not yet recovered from last year’s lockdowns, and cashflow becomes a real issue when there is little or no revenue coming in.

“We would like the government to move with urgency to instigate support as of today. I have written to ministers on this, and am waiting for a response.”

Cabinet will be convening on Wednesday afternoon to determine whether the lockdown will be extended and whether financial support will be announced.

The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwi who innovate to make good things happen.

Check out how Kiwibank can help your business take the next step.

A new documentary follows Scribe’s grim past, and looks towards a hopefully brighter future. Image compilation: TVNZ/Tina Tiller

Behind the scenes of Scribe’s new documentary

'We knew that potentially it could be an incomplete or unfinished story arc and that the end of the story might well be Scribe's vanished again.'
Mad Chapman, Editor
The Spinoff has covered the news that matters in 2021, most recently the delta outbreak. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

Get The Spinoff
in your inbox

Business