The Employment Court issued its first Covid-19 related decision, Gate Gourmet v Sandhu  NZEmpC 237 on 21 December 2020.
The employer, Gate Gourmet (Gate), was an essential service during level four lockdown. Gate partially shut down operations during this time, and paid employees at a rate of 80% of their normal pay. For employees on minimum wage, this meant they were receiving pay that was below the minimum amount set by the Minimum Wage Act 1983 (MWA). The issue was whether these employees were entitled to be paid the statutory minimum wage over this time period, considering they did not work their full time contracted hours due to Gate’s partial shutdown during level four lockdown.
The majority of the Court found that employees affected by the level four lockdown were not entitled to receive minimum wage for their contracted full time hours, even if they were ready, willing and able to work. The Court considered that during periods the employees were not rostered on, the employees did not have constraints placed on their freedom, or responsibilities placed on them by Gate, and Gate received no benefit from the employees. Therefore they were not performing “work” for the purposes of the MWA, and no statutory minimum wage entitlements arose, meaning Gate was not in breach of the MWA.
This decision reverses the earlier determination of the Employment Relations Authority, where the employees were found to be entitled to minimum wage by being ready, willing and able to work, but not actually performing work as Gate was not able to provide it.
Importantly, it gives clear support for any employer who took a similar approach to Gate Gourmet during the Covid-19 lockdown period (though employers will still need to be mindful that it does not mean that they can contract out of the MWA or unilaterally reduce employee wages).
Chief Judge Inglis disagreed with the majority of the Court, taking the view that the employer was in breach of the MWA and the employees should have been paid minimum wage for the lockdown period.
You can read the full judgment of the Employment Court here.
For further information or assistance with navigating your employment law needs, please contact our Employment Team (Troy Wano, Rebecca Eaton and Jaye Atkin) on 06 768 3710