We've put together a comprehensive guide on COVID-19 for the workplace.
ACE New Zealand member research
In April we surveyed ACE New Zealand members to understand:
- The immediate impacts of COVID-19,
- What is driving these impacts, as well as
- Member attitudes regarding the future of our sector
We heard from 138 member firms who employ more than 11,000 staff. This represents a response rate of approximately 64% of member firms and market coverage (as measured by fulltime equivalent employees) of more than 80%
It’s safe to say that COVID19 has had a significant impact. Both in terms of cash flow and service demand.
Health and safety standards
New industry health and safety standards and protocols for operating under COVID-19 alert levels have been developed and released following approval by the Construction Sector Accord Steering Group.
Consistent health and safety standards are essential to both protect workers and stop the spread of COVID-19, and to give people confidence that it is safe to return to work.
Construction Health and Safety NZ (CHASNZ) has developed the industry standards in collaboration with government agencies, WorkSafe, Construction Sector Accord member groups and client organisations.
In Alert Level 3 everyone must support and comply with the new standards and protocols so that we avoid returning to Alert Level 4 and give ourselves the best chance of moving back to Alert Levels 2 and 1 as soon as possible.
Response plan for the construction sector
Our sector will have an important role to play in kick-starting the New Zealand economy now that COVID-19 Level 4 restrictions are lifted.
To support this, the Construction Sector Accord has temporarily shifted focus from industry transformation to industry resilience and recovery. We are working actively with the Accord Steering Group on your behalf.
They have now developed a plan that is divided into three response phases:
- Phase 1: maintain – retain a viable sector during the shutdown
- Phase 2: restart – ensure readiness to restart works and accelerate projects
- Phase 3: transform – refocus on high performance
The government has also responded swiftly, issuing guidance and expectations to agencies on managing contracts during the shutdown.
What COVID-19 means for contracts
- Contractual relief may be available through a force majeure provision if present in a contract
- If not present, there is the possibility of the general law principle of frustration applying in a particular case. But it will depend greatly on the situation, as the bar is high
- Our recommendation is to communicate proactively with clients and seek a mutually acceptable negotiated solution via a contract variation
- If in doubt, get competent legal advice
NZS 3910 issues as engineer to the contract
The purpose of this advisory is to provide some general guidance to those administering contracts as Engineer to the Contract under standard NZS 3910:2013 “Conditions of Contract for building and civil engineering construction” on projects affected by Covid-19 epidemic and particularly the Alert Level 4 lockdown.
The advisory principally discusses extension of time (“EOT”) and Variation issues associated with entire site shutdowns as these are the main areas where decisions by Engineers to the Contract will likely be needed. In the course of this, it touches on similar issues relating to compliance with quarantine, isolation and other Health and Safety requirements before the Lockdown or continuing after it has been lifted. The Advisory also considers care of works and site issues arising during the Lockdown.
Workforce - how the industry is responding
Under the current lockdown, many firms are seeing an immediate decline in work, mainly site works, meaning that there is excess staffing capacity within some parts of their businesses.
Firms are responding in a range of ways, but the overwhelming message I've heard is that we will need a strong and capable workforce to respond to the government's signalled pipeline, so maintaining staffing is a priority wherever possible.
While we absolutely need to be aware of short-term cashflows, we must also be well-positioned for the response phase.
Measures firms have been implementing include:
- Temporary reductions in executive salaries, which may cascade down to other staff as time goes on
- Deferred annual remuneration and bonus rounds
- Voluntary leave and in some cases enforced leave where leave balances are significant
- Shortened working weeks (some staff reducing to either three or four days per week), particularly for non-income earning staff
- Holds on recruitment activities
Leaders I have spoken to are trying to respond sensibly and spread the pain wherever possible, to ensure they can play their part when the economy starts moving once again. The major question is how long will the lockdown last?
Be aware that while these are extraordinary times, employment law still applies. If an employer genuinely believes that they cannot afford to pay their employees in full, they should consult with them in good faith and seek to reach agreement on a reduced salary for a temporary period.
Employers who unilaterally impose pay cuts, or stop paying employees altogether, run the risk that once all this is over, they will face significant arrears of wages claims. This article summarises a number of things to consider
Updated wage subsidy
Work and Income have updated their advice to employers who are eligible for a wage subsidy due to the COVID-19 lockdown.
The government has removed the cap on wage subsidies that can be paid to employers affected by COVID-19. The cap of $150,000 per business is gone.
Another critical point is that you can use a predicted revenue decline as the basis for the application, meaning you can use lead indicators such as staff utilisation in calculating this.
We have also written a blog based on advice from Doyle & Associates Accountants. This steps you through:
- What you need to know
- How to make an application
- How to deal with subsidies in practice
- How to deal with subsidies in your accounts, and
- Steps you through a couple of basic examples
Cashflow is tight for many at present, and every expense counts. So, in our view, you should carefully review your lease agreement for any sources of rental relief as a result of COVID-19.
The most widely used form of commercial lease includes a "no access in emergency clause" (clause 27 of the Auckland District Law Society Deed of Lease), which is likely to be triggered in these circumstances.
This clause typically provides for a fair proportion of rent and outgoings to abate or cease for the period where a tenant cannot access the premises as a result of an emergency. If the restriction on access continues for a specified time period (usually nine months), both the tenant and landlord have a right to terminate the lease.
Most lawyers I have spoken to suggest that COVID-19 fits within the definition of "emergency". Furthermore, the government has issued an Epidemic Preparedness (COVID-19) Notice 2020, which gives further weight to this view.
So, start this discussion with your landlord now, in most cases, we see rent reductions in the order of 50 per cent.
PPE for essential workers
For essential workers (non-health sector), washing hands and physical distancing are the vital measures to enforce. Workers can wear gloves if appropriate. However, if they do, they should still follow basic hygiene – washing their hands with soap and water as soon as they remove their gloves.
The Ministry of Health says face masks aren't necessary outside of a health setting. If staff have a face mask and choose to wear one, they shouldn't be prevented from doing so. When a face mask is removed:
- avoid touching the front of it
- if the mask has ties, untie the bottom first, then the top tie
- discard the mask, don't use it again
- wash hands with soap and water and dry hands thoroughly or use hand sanitiser immediately after removing the mask
Working from home – health and safety
During the lockdown are your staff currently working from home? If so, their home is considered a workplace. That means employers have responsibilities under the Health and Safety at Work Act 2015. Here are some of the things you should consider when managing health and safety risks and supporting staff wellbeing.
Now’s a good time to brush up on your sick leave knowledge.
Did you know that sick leave entitlements are not pro-rated in any way?
This means that even if a part-time employee only works three days a week, they still get five days’ sick leave a year and can accumulate up to 20 sick days a year.