More than $9 million has already been paid out to support workers isolating or awaiting Covid-19 test results during the current outbreak – and if employers fail to meet their health and safety requirements, staff could claim a breach of contract

As restrictions in Auckland ease and positive Covid case numbers rise, careful planning of health and safety rules could protect a workplace from exposing itself to a potential lawsuit.

Over the course of the outbreak, a number of essential workers, including supermarket staff and hospital workers, have tested positive for Covid after being in contact with positive cases.

Applications for the leave support and short-term absence payment schemes, for workers or contractors needing to self isolate without the ability to work from home or awaiting a Covid test result, have also risen by the thousands since the August lockdown.

As at October 1, the Ministry of Social Development (MSD) data shows $138.6 million has been claimed through the leave support scheme since March last year for 27,555 workers and nearly $10m through the short-term absence payment since February this year for 16,800 workers.

Since the August outbreak, MSD has approved 2100 applications and paid out $6.9m in the leave support scheme. Meanwhile, 3600 short-term absence scheme applications, to the tune of about $3.2m, have been approved over the same time.

Cullen Law employment lawyer Calum Cartwright says if employers fail to meet their health and safety requirements, staff could claim a breach of contract. 

“Health and safety obligations get implied into employment agreements,” Cartwright says.

Cartwright says the threshold is high as employees must prove “strong failings” by the employer to follow the Government’s alert level rules and prove they were infected in the workplace.

However, since the staged opening of Auckland was announced last week, employers have raised concerns over the lack of clarity around what is and isn’t allowed.

On Monday, Prime Minister Jacinda Ardern confirmed Auckland would remain at stage one Level 3 restrictions for another week.

“If there are steps that can be taken to protect employees, employers should err on the side of caution.”
– Calum Cartwright, Cullen Law

Cartwright says the first obvious steps would be to follow the Government’s Level 2, 3 and 4 restrictions.

But in the case of these new steps, which have left some Auckland employers confused, Cartwright says employers should take regard to the rules and apply them as best as they understand them. 

“That would go towards what’s reasonably practicable. If an employer can point to ambiguity in the rules, and say that they had to make a decision that they deemed best in circumstances, that will satisfy their obligations,” he says.

“What should be given paramount concern is health and safety. And if there are steps that can be taken to protect employees, employers should err on the side of caution.”

Cartwright says one “reasonably practicable” step to ensure an employer is doing all it can to protect workers is implementing vaccination mandates. However the extent of an employer’s ability to issue such mandates remains to be seen as the employers enter new terrain regarding vaccinations in the workplace.

This week the Prime Minister also announced teachers along with more health workers will have vaccine mandates, saying the Government would look at other state sectors where it could impose these rules.

But business leaders, including Business NZ chief executive Kirk Hope, have called on the Government to provide guidance on vaccine mandates in the workplace to give remove ambiguity for employers. 

Companies like Steel & Tube are tightening their health and safety policies by vaccinating staff through an incentive programme.

Cartwright says he isn’t aware of insurance companies providing pandemic-related employer liability cover, but the Health and Safety Act prohibits persons conducting a business or undertaking from taking out insurance to protect them against penalties or infringement. 

“Certain employees took a breach of contract claim which would be for damages, then potentially that could be covered by an insurance policy.

“I’m not aware of insurance offering any specific Covid-19 protection. Insurance policies generally have an exclusion clause around pandemics, which could limit employers’ protections.”

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