Do employers have to pay staff even if workers' shifts are cancelled?
Monday, 15 February 2021
Auckland businesses are being warned against ignoring employment law, as tighter Covid-19 restrictions are introduced after the discovery of three new cases in the community.
The city went into Alert Level 3 on Sunday night, which meant all businesses, other than essential services, had to close, ask staff to work from home or offer online deliveries while operating under strict social distancing rules.
As a result hundreds of workers in industries such as hospitality who were willing and able to work have had their shifts cancelled without reasonable notice.
Dundas Street Employment Lawyers senior associate Chloe Luscombe said unless there was a clause in employee contracts dealing with shift cancellations, the workers should be paid.
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Luscombe said the Employment Relations Act required shift workers to have shift cancellation provisions in their employment agreement as well as terms that stated how much notice had to be given and the compensation if that notice was not given.
According to the law the notice of shift cancellation in the employment agreement has to be “reasonable”, she said.
But what was considered reasonable depended on a range of factors, but would generally be more than 24 hours, Luscombe said.
“Covid-19 could potentially be relied on as a reason for shift cancellation but only if the employment agreement has specific terms which deal with Covid-19 or related circumstances,” Luscombe said.
“Where someone undertakes shift work and does not have a shift cancellation clause, the employer has to pay them for their cancelled shift.”
Restaurant Association chief executive Marisa Bidois said the association had advised its members to pay staff for the three days with minimum guaranteed hours for employees and workers on irregular hours.
“It’s really important employers and employees are communicating with each other in good faith and the terms of their employment agreement are complied with,” Bidois said.
“Unless any changes have been agreed to and are viable, we’re saying this is a time to be flexible and for employees to be understanding and consider the business’ viability.”
Bidois said the Government needed to provide another wage subsidy for this three-day period as many hospitality businesses had decided to close completely because the cost of operating under restrictions outweighed the income.
“Going between alert levels is already challenging, particularly for Auckland business already trying to recover,” Bidois said.
“Prior to this level change we weren’t back to pre-Covid levels, with just under 4 million visitors to the country so hospitality is still not back to normal.
“With no wage subsidy being offered for 72 hours, if we get to the five day or six day mark it leaves our restaurants in a very difficult predicament with no income and increased costs.”
Prime Minister Jacinda Ardern said in a Facebook Live chat on Monday morning financial support for businesses would be back paid if the lockdown was extended beyond seven days.
Hospitality workers union Raise the Bar founder Chloe Ann-King said there were concerns that businesses would fail to pay their employees and casual workers minimum guaranteed hours for the time Auckland was in level 3 lockdown.
Ann-King said there were also concerns about workers with serious health conditions being forced to come into work under level 3 or level 2 restrictions.
Workers needed to know their rights and check their employment contracts, Ann-King said.
“Your employer has to sit down and talk to you in good faith before doing anything that might adversely impact you, like forcing you to come to work.
“My warning to employers is that what you say now you may lose 10 times over in Employment Court if your workers take action.”