Middle East Conflict: Navigating Employment Obligations
As the Middle East conflict continues to unfold, New Zealand businesses are feeling the effects of disrupted fuel supplies, shipping routes and other supply chains.
Here our employment team provides some guidance on what employers can and cannot do if the flow-on effect of these issues is having an impact on the workplace
Here is what you need to know:
Employment agreement: The starting point is always the employment agreement. Many employment agreements contain a business interruption clause which may give an employer the right to require an employee to take unpaid leave where an employee is unable to attend work or perform duties due to unforeseen circumstances beyond the control of the employer or the employee. These were often relied upon by employers, or added into employment agreements, during the COVID-19 pandemic.
- Although generally the default position is employers are required to honour contracted hours where employees are ready, willing and able to work, a business interruption clause can provide an exception to the default position.
- However, whether an exception is available ultimately depends on the specific wording of the clause and whether the facts fit within it. Any such clause will be interpreted strictly because of their potentially significant impact on the employee’s rights under their employment agreement.
Consultation: Irrespective of any business interruption clause, all employers have an overriding obligation to act fairly and reasonably and in good faith which requires them to raise any direct or indirect business impacts that are likely to affect the employment relationship and consult fairly about any changes to the operations that affect the employee.
- Employers should firstly explore other options (other than unpaid leave) to mitigate the impact on employees and their ability to work their contracted hours. For example, directing employees to work from home (if appropriate), redeploying employees temporarily to other roles (where the IEA provides for it or with agreement) or reducing employees’ agreed hours (with agreement).
- The consultation should also flag the possibility of reliance on the terms of a business interruption clause if relevant.
Redundancies: If the business impacts become prolonged, the next step may be to look at restructuring and/or redundancies. Employees need to ensure any restructure and/or termination on the grounds of redundancy is substantively justified and procedurally fair, in all the circumstances. A fair process should include:
- Complying with the terms of employment agreements and policies;
- Being open, communicative and constructive;
- Documenting the employer’s business case, reasons and proposals;
- Providing employees with access to all relevant information;
- Giving employees a reasonable opportunity to consider and respond to any proposals;
- Considering alternatives (which could include the options listed above).
Vehicle use and working from home arrangements:
Where employees’ duties involve a driving component, and vehicle and fuel costs are met by the employer, those employers may be looking at measures to reduce their costs by mandating working from home arrangements. Whether this approach is lawful will depend on the terms of the employment agreement, but some employees may be willing to agree to this as a temporary measure.
Where employees are entitled to reasonable personal use of a vehicle, employers will need to communicate transparently and carefully about what is expected. Many employees are likely to be respectful and understanding if this is approached in the right way.
For their own part, employees who are experiencing increased commuting costs due to rising fuel prices are entitled to ask their employers about the possibility of working from home, including by way of a flexible working request, but employers are not necessarily required to agree to such requests (and such arrangements will not be suitable for all roles). However, for roles where such requests can be accommodated, responding positively to such requests is likely to be helpful to employment relations.
If you have any questions about how to navigate the conflicts impact on you or your business, please contact a member of our employment law team.
Special thanks to Partner Jessie Lapthorne, Special Counsel Matt Harrop and Solicitor Connie Wynn-Williams for preparing this article.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
