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Safety comes first but who pays?

By Sarah Townsend, Associate

First published The Press, 1 August 2011

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Canterbury employers are being dealt a raft of issues with which to grapple in 2011. Yes, there are the usual challenges that cut across all areas but the province has had its own unique blend of problems wrought by the earthquakes - and now the snow.

In both scenarios, the focus is firstly around safety, and secondly pay. The issue was recently highlighted with the story of a woman who had been told by her boss to use two days’ annual leave after the snowfall trapped her at home with her children. 

In a poll conducted on the Stuff website, almost two thirds of people felt that it was unfair that the woman should have to take annual leave in this situation.   

It’s an interesting issue  and raises the tricky question - Should employees be forced to use their annual leave if they do not come into work after a heavy snowfall or natural disaster?  In some cases, it can seem unfair that they should have to.  On the other hand, why should employers, who have no control over the weather and who are already in many cases struggling to stay afloat, have to foot the bill and pay their staff when they are not at work?

The answer is not straightforward and there is no “one size fits all” solution. 

In some instances, this type of scenario is expressly provided for in an employee’s written employment agreement. Typically, clauses of this nature are found in businesses which rely on the weather to be able to operate, for example in the building trade.    If a clause dealing with this situation exists, it will usually provide for any absence from work to be unpaid in these circumstances, or for employees to take annual leave in order to be paid for the day’s work that has been missed.

Most employment agreements will be silent on the issue of what happens if a workplace has to close because of the weather or some other situation outside the control or either the employer or employee. 

But generally speaking, there is an obligation on employers to pay employees who are “ready, willing and able” to work, but are unable to work because the workplace is closed or otherwise off limits.  This can happen, for example, as a result of heavy snow as was the case last week, but would also apply to situations where the workplace is unsafe or within the red zone as was the case for many businesses following the February earthquake.  

In these situations, employees who would otherwise have attended work but for the closure - in other words those not on annual leave, sick leave or some other form of leave - will normally be entitled to be paid for the day, without having to take annual leave. This is the case  even though they did not actually work on the day because the office was closed or they were sent home. 

In the case of the February earthquake, where the disruption was extended, many workplaces had business interruption insurance which would have kicked in to assist them to pay their staff while they were closed or in transition.  The Government also provided assistance in the form of wage subsidies. For bad weather situations such as last week, where a business might only be closed for a day or two, , there is no assistance available from insurance or from the Government. This places a significant burden on employers to continue to pay staff when they are not able to operate and generate an income. 

The situation is different where businesses are open and operating but employees either choose not to come into work, or cannot come in due to childcare requirements or concern over road conditions.  This was the situation many faced on Tuesday last week [26 July 2011].  Some employees attended work for all or part of that day, but others did not, either because some preschools were still closed, because of potentially dangerous road conditions or simply because they were heeding advice on television to stay off the roads. 

In these circumstances it can be fair for employers to ask their staff to take annual leave if they cannot come into work but still wish to be paid for that day.   If the employee does not wish to use their annual leave entitlement, then the day away from work would be unpaid. 

The situation is by no means black and white. There may be instances where the strict application of the general principles set out above will not be fair and reasonable.  In considering whether an employee is ready, willing and able to work, an employer may need to take into account whether the employee could actually have made it into work but chose not to, or whether the employee could truly have not made it into work safely.  Each case will need to be considered on it own merits.

It is also important to remember that the employment relationship is founded on principles of good faith.   This places a legal requirement on both employees and employers to deal with each other openly and honestly and to be communicative at all times.   This means that both employers and employees should be taking steps to keep in touch about their personal circumstances and the work situation.  This does not mean that a Spanish Inquisition into the employee’s ability to get their car out of their driveway is fair and reasonable.  Neither does it mean that an employee can simply not show up to work  and assume they will be paid for the days they have been away.  

As with every good relationship, the employment partnership requires a bit of give and take and trust on both sides.  If the experience of the earthquakes has taught us anything, it is that Cantabrians are on the whole willing to step up and do what it takes to keep things going.

The key to resolving any issues that might arise is in many cases clear, prompt and honest communication on both sides.  If employers or employees have any concerns about these issues, it is best to take some advice.

• Sarah Townsend is an employment law specialist with national and trans-Tasman firm Duncan Cotterill. S.townsend@DuncanCotterill.com

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.