Working with Covid

After living relatively COVID-19 free in the first half of 2021, the arrival of Delta prompted a swift return to stringent lockdowns for many parts of the country, as well as the reactivation of the Government’s wage subsidy and business support payments. Although lockdowns have lifted, the recent arrival of the more infectious Omicron variant has prompted a return to the restrictive “Red” traffic light setting, at least for the near future.

Although Public Health Orders were introduced mandating vaccination among high-risk sectors such as border workers, healthcare, and education, the majority of employers were left to grapple with the health and safety, operational, business continuity, and litigation risks associated with COVID-19 and navigate a raft of new regulations addressing vaccination.

As the “elimination strategy” has eased, we have seen the introduction of vaccination certificates and a new COVID-19 Protection Framework. Organisations are now working through a matrix of further regulations and legislation, intended to simplify the health and safety risk assessment and assist employers in determining whether certain work needs to be performed by a vaccinated person.

Workforce planning and worker retention

Until our national border reopens without restriction, employers will continue to face fundamental challenges sourcing, recruiting and retaining talented workers. Faced with limited supply, strategies for the retention of skilled workers will be at the forefront of workforce planning for many organisations. Based on what we have seen in other countries, the arrival of Omicron variant is expected to cause significant disruption to business continuity, most notably a reduction in manning levels as workers recovering from Covid-19 or isolating as a close contact remain away from the workplace. Where viable, employers would do well to prepare by having additional staff on hand, or up-skilling existing workers in areas outside their usual tasks, in preparation for covering absent workers.

It is yet to be seen whether New Zealand will experience the “great resignation” seen in other geographies. Many young workers will have delayed OEs (Overseas Experiences), and with the eventual reopening of borders it is possible that some of these skilled workers will head offshore (although borders are, at this stage, unlikely to be open by March or April, which is the time that workers traditionally head to the northern hemisphere on their OE).

The challenges faced by employees working remotely during lockdown has reinforced the need for organisations to ensure their ways of working are sustainable and support wellbeing. In a climate of uncertainty, employers will remain competitive by enabling flexibility, protecting workers’ health and safety, demonstrating adaptive leadership, rewarding good performance, and fostering a supportive workplace culture.

The challenges faced by employees working remotely during lockdowns has reinforced the need for organisations to ensure their ways of working are sustainable and support wellbeing.

When our borders re-open we expect the existing ‘critical worker’ visa framework to be pared back significantly (if not wound up altogether) giving employers renewed access to migrant labour. A new ‘Accredited Employer Work Visa’ will also be introduced in July 2022, giving accredited employers greater access to skilled migrant labour.

COVID-19 related employment litigation

We predict a continued flow of COVID-19 and vaccination-related litigation. Some employees have successfully challenged unilateral reductions of wages during periods of partial or full closure due to COVID-19. However, to date proceedings brought by dismissed border workers challenging decisions made under Public Health Orders mandating vaccination have been unsuccessful. Employers who are proactively introducing vaccination policies on health and safety grounds (as opposed to the Health Orders) may well see these policies, and other decisions made by them, tested in the courts.

Once Omicron cases eventually subside and more employees return to shared workspaces, we may see more vaccinated employees expressing hesitancy to work proximate to unvaccinated colleagues or in locations where vaccination rates are not high. While not all workplace disputes will escalate to litigation, conflict and tension in the workplace can still cause significant disruption. We’ve already seen societal division regarding the vaccination roll-out and so we expect to see these differing views being expressed in the workplace.

The Ministry of Social Development has initiated legal action against employers who received (and have not repaid) wage subsidies but did not meet the requirements for accessing such payments. This scheme was “high trust” and relied on self-declared compliance with the subsidy’s criteria. Criminal charges have been laid against two individuals and we expect to see more employers come under scrutiny.

As it becomes increasingly common for employers to collect information about employees’ vaccination and health status, we expect to see an increase in privacy-related legal challenges. Employers are required to ensure personal information is protected from misuse and the Privacy Commissioner has a range of tools available to enforce the legislative framework. We expect to see these powers being used in 2022 where employers have failed to meet their obligations.

Other areas of potential litigation

As the COVID-19 related restrictions reduce, we expect to see discussions about the Government’s proposed new system of Fair Pay Agreements recommence. The Government initially advised that draft legislation would be introduced in late 2021 and passed in 2022. It is likely those timelines will have been pushed out due to the interruptions caused by COVID-19.

Internationally we are seeing employment regulations (and indeed the definition of “employment” itself) being tested by platform workers engaged to provide transport and food delivery services. Typically, these workers are engaged as independent contractors, but many are challenging that classification on a class action basis to claim the protections of employment law. In New Zealand, challenges regarding worker status are currently assessed on a case by case basis, limiting the ability for groups of workers to bring a class action. We may see a push for legislative change to allow this issue to be litigated at a group or class action level.

Read MinterEllisonRuddWatts' Litigation Forecast

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