Earthquake's aftermath will pose many problems for employers and workers

The Dominion Post - Thursday, 24 February 2011

When the shock of Christchurch’s recent earthquake passes, both employers and employees will be looking at their futures. Staff will want to know whether they are going to be paid wages and employers will want to know how long they will have to pay workers who are not working.

If the business is likely to commence trading again in the not too distant future, employers and their workers are likely to reach a pragmatic solution. Workers that are suffering psychologically should be able to use their sick leave entitlements. Those who are unable to work because they are not allowed into the workplace, for safety reasons, may have to carried by the employer, unless the parties reach agreement that the worker takes annual leave.

An employer cannot force a worker to take annual leave without agreement unless 14 days notice is given.

Where a business is completely destroyed, employers may be able to rely on the doctrine of frustration of contract to say that the employment agreement cannot be carried out due to an “Act of God.”

Where the business is not destroyed, but trading is unlikely to begin soon or as before, the employer may look at making employees redundant. In all cases the starting point must be looking at the employment agreement to see if it covers this type of situation. Most employment agreements won’t.

Where the business is able to trade and the worker is prepared to work, but the employer has not opened its business, then the employer is obliged to pay wages.

Where the business is operating but the worker is not willing to work for some reason, for example anxiety, distress or stress, the employer will usually not have to pay wages once the worker’s sick leave entitlement has been exhausted. That is, of course, subject to the workplace being safe. If the workplace is unsafe then the worker doesn’t have to work.

The Government may offer assistance to employers, as it did last time, in the form of wage subsidies for a limited period of time. Employers covered by insurance will fare better.

The earthquake is a huge tragedy for all in the Christchurch area. There are going to be a great number of challenges to overcome in the months and even years ahead. In the employment context, common sense, good communication and respect will generally enable those affected to sort out a practical solution to overcome the employment difficulties caused by the earthquake. A generous spirit will help most.