As people return to work, New Zealand waits for the inevitable outbreak of Omicron in the community.  When this happens, we know from overseas experience that it will rip through the population and there will be a far greater number of cases than we have seen before.  Health officials are currently predicting that Omicron will overtake Delta as the predominant Covid-19 variant in New Zealand two to four weeks after an outbreak occurs. 

The current Government mandate requires that any person who tests positive for Covid-19 or falls within the definition of a “close contact”, must go into self-isolation or managed isolation/quarantine.  The isolation period for positive cases who are fully vaccinated is at least 10 days, including 72 hours symptom free, and for partially vaccinated or unvaccinated people, it is at least 14 days, including 72 hours symptom free. 

Household members are also required to remain in isolation for at least 10 days after the positive person has been released as a case.  For close contacts the period is at least 7 days for fully vaccinated people and at least 10 days for partially or non-vaccinated people.

If these requirements remain in place, there will be havoc in workplaces.  Tens of thousands of workers will potentially be required to remain away from work for lengthy periods of time.  Businesses will suffer sever staff shortages and in some cases will be unable to operate at all.

We are already seeing mass employee absences due to Omicron in Australia and other countries, to the point that the Australian Government has now relaxed its isolation requirements for workers in key industries to allow close contacts of positive cases to return to work if they can produce a negative rapid test. 

Difficult issues are going to arise within workplaces as to who wears the cost of employee absence where people are required to self-isolate and cannot work from home.  There are a number of potential scenarios. 

Firstly, if an employee has Covid-19 and is unwell, they will be able to use any sick leave entitlement that they have.  Given that the Holidays Act provides for only 10 days of sick leave per year, this may not be enough to cover the whole period. Any further absence due to sickness would then be unpaid unless the employee’s employment agreement provides otherwise or the employer agrees to continue payment.

It becomes more tricky where the employee is not actually unwell, but they are required to remain away from the workplace as a result of Government mandates.  There is a general legal principle that an employer is required to pay an employee if they are “ready, willing and able” to work.  In recent cases brought by employees who could not work from home during the lockdowns, the Employment Relations Authority found that the employers were obliged to continue paying employees in this context because they were available for work despite the fact that the employers could not provide it. 

The same principle will likely apply where an employer requests that an employee stays away from work based on their own risk assessment, as opposed to a Government mandated requirement.  In this instance the employer would need to continue payment unless otherwise agreed. Further, the employer could not direct the employee to take annual leave unless they had complied with the requirement to give 14 days’ notice.

The situation is different where the workplace remains open and the employer can provide work, but the employee is not able to attend due to self-isolation or quarantine requirements.  Whilst this scenario has not yet been considered by the Courts, it is strongly arguable that the employer would not have to pay the employee as they are not “ready, willing and able” to work. 

This is going to place massive strain on employees who may be prevented from attending work for periods of up to two weeks, or potentially more.  Further, given that household members and close contacts are also covered by the requirement to self-isolate, it is likely that some families will be doubly affected because more than one breadwinner is required to stay at home.

The Government currently provides some relief for employees who can not attend work due to testing positive for Covid-19 or being required to self-isolate.  The Leave Support Scheme allows employers to apply for payments of up to $600 per week for employees working 20 hours or more or $359 for employees working less than 20 hours, to help cover their wages.

This will go some way to alleviating the financial burden placed on employees, but will still leave many out of pocket.  As has occurred in Australia, this will inevitably lead to pressure being placed on our Government to review and loosen the rules around self-isolation. 

If Covid-19 is going to become endemic in our community, we will need to take a pragmatic approach to managing it.  Paralysing workplaces due to staffing shortages and preventing thousands of employees from attending work is unlikely to be sustainable in the long term.

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