In the aftermath of the devastating earthquake last Tuesday, employers are reviewing emergency procedures and employment policies in an attempt to address the many significant challenges posed by such catastrophic events.
In addition, adverse weather has played a significant role in disrupting the workplace recently, hampering the recovery effort in Christchurch over the last week, and more widely around the globe with severe flooding, cyclones and volcanic ash clouds to name a few examples.
For those out of work as a result of the Christchurch disaster, relief is a main concern. On Monday, the Government announced as an immediate measure subsidies of up to $400 per week for workers who have lost their jobs. Further, a 6 week support package for employers comprising $500 per week per full time worker and $300 per week per part-timer is aimed at assisting employers to continue paying wages.
Although it is impossible to provide for every eventuality, clear and safe workplace processes and policies may at least contribute towards saving lives, minimising injury and supporting employees.
All practicable steps
An employer is required by law to take all practicable steps to ensure the safety of its employees while at work. Equivalent duties are owed to contractors and visitors to the premises, including customers and suppliers.
Emergency procedures, including processes for managing and assessing hazards, exiting the workplace on mass and accounting for workers and other individuals in the workplace should be in place and familiar to employees. These processes, including regular fire drills, may be critical in a time of crisis. Employers may want to consider a dedicated emergency management team. In addition, there should be health and safety training, up-to-date first aid supplies on site, and next of kin information for all employees on record.
Employee assistance programs (or EAPs) are recommended to provide emotional and psychological support for employees (and their families) in need. EAPs often include counselling and other services which help to contribute to a safe place of work.
Other strategies for dealing with a disaster affecting the workplace could include allowing employees to take paid leave entitlements or unpaid leave, arranging alternative premises, permitting work from home or alternative work (including perhaps clearing up), and flexible and/or reduced working hours. Such arrangements will be subject to applicable employment agreements and policies. Employers may want to consider introducing policies to cover these possibilities in the event of a crisis.
With effect from 1 April this year, employees can request for a portion (up to one week) of their annual leave entitlement to be cashed up. Employers may receive some such requests for the purpose of donating funds to victims of the earthquake. In addition, cashing up may be allowed now in respect of any enhanced (contractual) annual leave over and above statutory minimum entitlements and/or long service leave. Any such arrangements should be formally documented.
In the event of an emergency or other disruption, employers should be mindful of statutory good faith requirements to be communicative and responsive. These obligations are particularly significant in situations of emergency or trauma - employees will be looking to their employer for information and support.
Where a workplace is damaged following an incident, the employer must satisfy itself that the premises are safe before allowing employees to return to work and monitor the workplace on an ongoing basis. Further, it may be that entry to the premises is restricted by third party authorities responsible for assessing the situation. As a consequence, there may be no work for employees to perform in the short to medium term. Badly damaged businesses may never recover.
If an employer cannot provide work, must it continue to pay its employees?
The short answer is that the law is unclear. An employer cannot "stand down" an employee if there is no work, and thereby be relieved of the obligation to pay wages. Generally, ready, willing and able employees have a right to work and be paid. On this basis, an employer should continue pay unless there is an express or implied right to withhold pay. Further, a unilateral cessation of pay in the absence of such right would amount to repudiatory conduct, entitling affected employees to resign and claim constructive dismissal.
However, there is authority for the proposition that employees who cannot get to work are not "ready" for work and therefore not entitled to pay.
Prudent employers may want to clarify this issue in employment agreements.
In practice, it is recommended that where following a disaster there is no work for employees, they are encouraged or directed to take annual leave entitlement and/or other leave. Under the Holidays Act 2003, if an employer and employee cannot reach agreement as to when annual leave entitlement should be taken, the employer can direct the employee to take the entitlement on 14 days' notice. Further, an employer and employee can agree to a period of annual holiday in advance of entitlement arising.
Alternative holidays and long service leave entitlement could be taken by agreement where applicable. From 1 April this year, employers can require employees to take an alternative holiday on 14 days' notice. Alternatively, an employee may be willing to take unpaid leave for a specified period.
If some work is available, one or more employees may be willing to drop their hours and be paid for part-time work or perform alternative work.
At what point can an employer terminate employees' employment?
Where a business is badly damaged or likely to be out of action for the foreseeable future, the employer may have to consider redundancy as a last resort.
Care should be taken to comply with statutory obligations of good faith. A fair procedure should involve some process of consultation, even if truncated because there is no alternative to redundancy, for example, in the case of a business closure.
As a minimum requirement, before any decision is made, affected employees should be given relevant information and an opportunity to comment. Contractual (or, if none, reasonable) notice periods and compensation provisions will apply.
Employees unable or unwilling to work
Sick leave is available for injured employees or those caring for injured dependants. Bereavement leave of up to 3 days is available for any employee who has lost a close family member.
For other employees who do not want to or cannot work, perhaps because they need to care for dependants who are well or attend to domestic matters such as damaged property, annual holiday or other leave (paid or unpaid) could be taken by agreement for a specified period.
An employee may also refuse to work if they believe that the work is likely to cause them serious harm. An employee in such circumstances is required to perform any other work within the scope of their employment agreement that the employer reasonably requests.