The Covid-19 pandemic and the Government’s Alert Level 4 lockdown has created a uniquely challenging landscape for employers to navigate. Not only does it present an extremely trying set of commercial circumstances, it has also given rise to novel employment law issues which even experts have struggled to come to grips with. Unsurprisingly, this has led to a wide range of legal myths circulating about employer obligations during the lockdown which we have taken the time to bust.
1. Myth one: All employees are entitled to be paid in full during the lockdown
Truth: This depends on an employee’s ability to work during this time
If an employee is not part of an essential service and cannot perform their role from home, they are not necessarily “ready, willing and able to work”. While there is some argument around what exactly this means, our view is that these employees are not entitled to be paid their normal pay during the lockdown. However, employers do still need to act in good faith and should still give careful consideration to options to fill the remuneration void, including applying for and paying employees the Government’s wage subsidy, discretionary special leave or agreeing that an employee will use leave entitlements to help bridge any shortfall in wages.
It is also important to stress that this is different from a situation where an employee can perform their role from home, but the business is unable or unwilling to provide sufficient work during the lockdown. In these circumstances, the starting point is that the employee is entitled to full pay unless they agree to a reduction in remuneration or some other alternative arrangement.
2. Myth two: Employers are obligated to apply for the wage subsidy
