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COVID-19 and Sick Leave

5 March 2020

With the New Zealand government asking Kiwi’s to self-isolate, and the threat of infection from COVID-19 plus the usual range of winter illnesses, most businesses will see a rise in the amount of sick leave being taken.

How will the government’s recently announced economic policies impact you? Do you have to pay for your employees to go into self-isolation? Here’s what you need to know.

Wearing a mask to protect against COVID 19

Government assistance and COVID-19

The Government has just released an assistance package to help employers and employees “get through” the financial consequences of COVID-19.

The financial assistance package relating to wage and leave support is being administered by Work and Income. In most instances a weekly payment is available for a limited period, typically paid to employers to “pass-on” to their affected employees.

To help with the issue of “self-isolation”, the Government has confirmed that they are making a weekly payment available to those who are required to self-isolate, in circumstances where they are unable to work from home – in essence providing cover where the employee would otherwise be self-isolating on unpaid leave.

The application forms are relatively straightforward and can be found on the Work and Income website here.

We recommend working closely with your accountant so you can access all your entitlements.

When will sick leave apply?

At the risk of sounding like a broken record, as with most employment issues we recommend referring back to your employment agreement.

As with any other form of sickness, the sick-leave provisions of your employment agreement apply when employees are sick and unable to work, their children or partner is sick and require care, or another dependent requires care when they are sick.

So, if either an employee or one of their dependents are unwell with COVID-19 or sick from symptoms, then they will most likely be able to rely on the sick-leave entitlements within the employment agreement.

How much sick leave will employees get?

Every employment agreement is unique. Packages and entitlements may vary from employee to employee. However, there are statutory minimum entitlements which are: Following six-months of continuous employment, a minimum of 5-days paid sick-leave per 12-month period, with a maximum accumulation of 20-days.

Does the business have to pay for my employee’s sick leave?

With regard to sick leave for the reasons explained above, then, ordinarily the employer would have to pay within the limits of the terms in the employment agreement. However, if you are suspicious that the sickness is not genuine and the provisions are being abused, you may require the employee to produce evidence of sickness.

What can be asked for as evidence? Given that the instructions from the Ministry of Health with regard to COVID-19 are to specifically avoid going to see a health professional, then, you can ask for a record of any Healthline calls placed, such as time and date, and an outline of discussion. If people are being asked to limit contact with others, this may be all the evidence you can expect to support their sick leave claim.

What about self-isolation and getting sick leave?

Self-isolation as a precaution when you are otherwise well means you’re unlikely to get sick leave, for the simple reason that you are not sick. Sick leave is for instances of sickness, and not for precautionary measures before sickness.

While this situation is rapidly changing, you may want to explore alternative options and iron out the practicalities around working from home before it’s necessary. Making solid preparations to work remotely now could be very useful.

It may also be useful to have discussions with your employees around advance sick-leave, agreed use of annual leave, holiday pay, or special leave, or any other options that will enable the employee to avoid financial pressure from self-isolating on unpaid leave.

While taking precautionary measures when nobody is actually sick, it’s ultimately at your discretion as to whether you provide continued income to the employee under another category of leave.
Having conversations with your employees is key. If either of you are struggling, it’s essential to communicate with the other party to avoid misunderstandings and to assist in the early resolution of problems.


Redundancy and Restructuring

When announcing the government’s economic measures to help business stability, Finance Minister Grant Robertson said that there will sadly be casualties as a result of the COVID-19 outbreak. “We don’t yet know what the full impact on New Zealand’s economy will be, however we do know it will cost us jobs and have a significant impact on business,” he says.

Unfortunately not all jobs or businesses can be saved. Looking at redundancy or restructuring is not an easy decision for any employer. If you feel these are options you may need to consider, come in and speak with us early. We may be able to find alternative scenarios, or put plans in place that protect your business from a personal grievance.

We’re here to help

In times of difficulty it can be an unfortunate result that employment relationships breakdown for one reason or another. At Godfreys Law we have a team of employment law specialists, experienced with assisting employers to work through and resolve employment disputes.

We can work with you at the appropriate level to achieve the best resolutions, either by communication and planning assistance, formal correspondence, mediation attendance or appearance in the Employment Relations Authority.

If you are in need of assistance, then please get in touch with our employment law team on 03 366 7469: Brad, Andy or James.

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