Employment Law Update

It has been a busy start to 2022, and in-keeping with the prevailing theme over the last two years, there have been several important updates in the employment jurisdiction already this year.
 
In this article, we outline some of the key updates in the employment space so far for 2022.
 
We note that the Government is currently considering a bill regarding Fair Pay Agreements.  We will be publishing a separate article detailing this bill shortly.
 
Self-isolation requirements
 
In January 2022, the Government announced a three-phase ‘Omicron response’ plan, to modify the testing and isolation requirements as case numbers increase. 
 
Currently, only positive cases and household contacts are required to self-isolate, as follows:

  • Positive cases – if you have tested positive for COVID-19, either through a PCR test or a Rapid Antigen Test (“RAT”), you must self-isolate for at least 7 days, starting from the day symptoms began or the day you returned a positive test result if asymptomatic.
  • Household contacts – if you live with a positive case, you must self-isolate until the positive case completes their 7-day isolation period.  You must also get a test on day 3 and day 7 of the isolation period, or sooner if you develop symptoms.  If you test positive, you must begin the 7-day isolation period for positive cases.  However, if someone else in your household tests positive, you do not need to re-start your isolation period – you can complete your isolation at the same time as the first person in your household that tested positive, so long as your day 7 test was negative and you have no new or worsening symptoms.  

Critical workers (being workers in critical services such as food production and distribution, health and emergency services, lifeline utilities, etc.) who are household contacts may continue to work during their self-isolation period.  To be eligible, the critical worker must be fully vaccinated against COVID-19, asymptomatic, and they must return a negative RAT before each day/shift they work during their isolation period.  More details on this exemption scheme for critical workers can be found here.
 
Changes to the Traffic Light Framework
 
At 11.59pm on 4 April 2022, several significant changes to the Traffic Light Framework came into effect. These changes include:

  • the removal of COVID-19 Vaccine Certificate (“CVC”) requirements for affected businesses, such as events, food and drink businesses and services, close-proximity businesses, etc.
  • the removal of the CVC vaccine mandates, which covered employees of affected businesses
  • the removal of the vaccine mandates for workers at affected education services, providers of home-based education and care services, and workers at tertiary education providers in regions under the Red setting
  • the removal of all outdoor capacity limits
  • retaining the requirement that workers subject to previous vaccine mandates must wear medical-grade face coverings, and
  • extending the face covering requirements to workers at indoor events under the Orange setting, and requiring workers at food and drink businesses, close-proximity business, and events to wear medical-grade face coverings under the Orange setting.  

We note that the vaccine mandates (including the requirement to have received a booster dose) remain in place for workers in:

  • MIQ facilities and those who handle affected items from MIQ facilities
  • affected airports and aircraft
  • the health and disability sector, and
  • corrections prisons.  

On 4 April 2022, the Government announced that all of New Zealand would remain at the Red setting, as there was still pressure on the hospital network, and other regions were still yet to reach their peak daily infection numbers for this Omicron outbreak.  The next review of the Alert Level setting is scheduled for 14 April 2022, just before Easter.
 
NZ Police and Defence Force vaccine mandate
 
Prior to the above changes to the Traffic Light Framework being implemented, in February 2022 the High Court in Yardley v Minister for Workplace Relations and Safety [2022] NZHC 291 considered the enforceability of the vaccine mandate for NZ Police and Defence Force workers.
 
In Yardley, the High Court accepted that the vaccine mandate for NZ Police and Defence Force workers limited the right to be free to refuse medical treatment recognised by section 11 of the New Zealand Bill of Rights Act 1990 (“Bill of Rights Act”). 
 
The High Court also observed that the vaccine mandate limited the right to manifest religion, pursuant to section 15 of the Bill of Rights Act.  This was on the basis that the Pfizer vaccine had been tested on cells derived from a human foetus, and that it was undetermined whether this was in fact an aborted foetus.  Accordingly, this right under section 15 of the Bill of Rights Act was limited for those who object to vaccination with a vaccine that has been tested using cells derived from a human foetus on religious grounds.
 
Having determined that the vaccine mandate limits these freedoms under the Bill of Rights, the High Court had to consider whether this limitation of fundamental rights was ‘demonstrably justified in a free and democratic society’ in light of the stated purpose of the vaccine mandate.
 
Ultimately, the High Court determined that these limitations were not demonstrably justified, and that the vaccine mandate for NZ Police and Defence Force workers was unlawful.  In reaching this decision, the High Court observed that:

  • the vaccine mandate for NZ Police and Defence Force workers was imposed to ensure the continuity of these public services, and to promote public confidence in those services, rather than to stop the spread of COVID-19
  • public health advice received by the Minister was that further mandates were not required to restrict the spread of COVID-19
  • given the already high rate of vaccination within these two workforces, there was no hard evidence that the relatively small number of unvaccinated workers would materially affect the continuity of the NZ Police and Defence Forces.  

Accordingly, the High Court was not satisfied that the vaccine mandate for NZ Police and Defence Force workers materially advanced the continuity of these services, which was the stated purpose for this vaccine mandate.  Consequentially, the vaccine mandate for NZ Police and Defence Force workers was set aside.
 
Whilst this particular vaccine mandate was found to be unlawful, it must be noted that this determination turned on the facts of this particular case, and specifically on the stated purpose for this vaccine mandate, which was to ensure the continuity of services for the NZ Police and Defence Force.  As such, it remains to be seen how consequential this determination will be for the remaining vaccine mandates.
 
Minimum wage increase
 
As most employers will know, from 1 April 2022 the Adult minimum wage rate increased to $21.20 gross per hour. 
 
The Starting-out and Training minimum wage rates have also increased, to $16.96 gross per hour.
 
Matariki – a new Public Holiday
 
On 8 April 2022, the Government enacted the Te Kāhui o Matariki Public Holiday Act 2021, which creates a new statutory public holiday to recognise Matariki.
 
The public holiday for Matariki will occur in June/July each year, with the first observance being 24 June 2022.  The Act also prescribes the specific dates for the observance of Matariki for the next 30 years, up to 2052.
 
New Zealand Income Insurance Scheme
 
The Government, in consultation with Business New Zealand and the New Zealand Council of Trade Unions, has developed the New Zealand Income Insurance Scheme (“Scheme”), which is currently being consulted on with the public.
 
The full consultation document is a hefty 178 pages long.  However, broadly speaking, the proposal is that employers and employees each contribute 1.39% of the employee’s earnings to the Scheme, and that in return, employees will receive:

  • at least four weeks’ notice of redundancy
  • an additional four weeks’ pay, at 80% of their normal earnings (referred to as a ‘bridging payment’), and
  • up to six months’ pay, at up to 80% of their normal earnings (subject to a cap). There is the possibility that this could be extended beyond six months.  However, there will be an expectation that the individual will be actively seeking alternative employment over this period, and they must accept any suitable job offered on equal or better terms to their former role.  

Under the Scheme, employees will be insured against displacement (i.e. redundancy), as well as loss of employment due to health conditions or disability.  Of the total 2.77% levy (being 1.39% each from employers and employees), coverage for displacement accounts for 1.42%, with coverage for health conditions and disability accounting for the remaining 1.36% of the levy.
 
It is proposed that the levy will have a maximum earnings cap, initially at $130,911.
 
The Scheme would be administered by ACC, given the similarities with the Accident Compensation scheme.  Employee levies would be collected by IRD as an additional deduction in PAYE returns.
 
The Government has ambitiously indicated that the Scheme could be implemented from as early as 2023.   
 
Consultation on the Scheme is now open, and the deadline for providing feedback is 26 April 2022.  The full consultation document (as well as the 16-page summary), and details on how to make a submission can be viewed here.
 
If you have any questions regarding these updates, or about employment law generally, you can contact our team on 0800 339 002.

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