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Grounding your jet-setters

The Covid dilemma of annual leave and holidaying offshore.

Since Covid appeared in New Zealand in early 2020, employers have navigated a variety of complex matters relating to vaccinations, vaccine passes, alert systems and workforce management.

In this third year of the pandemic, many employers now face difficult decisions around annual leave and international travel ambitions of their valuable staff.

Can employers legitimately deny leave if their staff disclose an intention to travel internationally? What happens when employees are stranded overseas?

As with many employment law areas, responses will depend on the individual circumstances, but we look at some of the general principles that will govern these scenarios.

Disclosure is optional

While most employees freely disclose their leave plans, they are not legally required to tell you what they will be doing in their personal time — including how they take annual leave. As an employer, you may only request additional information relevant to the good faith assessment of the leave request, ensuring that it is not ‘unnecessarily unfair to your employee in the circumstances or unreasonably intrusive on your employee’s personal affairs’[1]. Quizzing employees about their plans could be considered a breach of the Privacy Act 2020 and employer good faith.

Approving/denying leave

You must consider ‘in good faith’ every leave request submitted by your employees. This means you may only reject the leave request on objectively reasonable grounds.

Reasonable grounds to reject leave may apply if your employee:

  • Is required to be present in your workplace during their proposed leave due to prior commitments or key business dates
  • Is required to be present immediately after, or shortly after, their proposed leave and that quarantine or self-isolation may jeopardise that availability, or
  • On their return to New Zealand they may present a significant health and safety risk to themselves or your workplace.

It is anticipated that the majority of leave that is reasonably denied will be due to essential staff shortages and a requirement to be physically present either during the leave period requested or shortly after. It is important to remember, however, that your employees must be allowed to take annual leave within 12 months of their entitlement arising, so perpetual rejection of leave is not permitted.

An argument that a returned employee could present a health and safety risk is unlikely to be considered ‘reasonable’ given that the government is already enforcing stringent public protection measures such as quarantine, self- isolation and ‘trans-Tasman bubble’ pauses. This could change, however, if the government relaxes protection measures and increased responsibility falls on employers to provide a safe workplace.

Someone stranded!

What happens when you have granted annual leave and your employee is stranded overseas or in MIQ? When can you terminate their employment and move on?

Again, the principle of acting in good faith will be the prevailing principle and each situation will be unique.

Some of the most relevant factors to consider are:

  • How long is your employee stranded? If it’s only an additional two to four weeks for MIQ, it’s likely you will have to make do until their return. The appropriate time frame before termination will vary, but in almost all circumstances it would be months before termination was considered a reasonable response.
  • Can your employee work remotely in some capacity? If so, you should support them to work in this way. Dismissing an employee who can work remotely (even if it’s less desirable than in person) would likely be valid grounds for a personal grievance claim.
  • Can your business take alternative measures such as hiring casual or fixed-term contractors? If so, it is likely the role will need to remain open for a much longer time frame before terminating your employee.

During the time your employee is stranded overseas, you must continue to communicate proactively with them and consult with them on how to best rectify the situation. If you have a Covid policy (which is now recommended  for all businesses), this should be followed.

If, after considering all relevant information, it is unlikely that your staff member can return in an acceptable time frame, you may be able to terminate their employment in accordance with their employment agreement.

Employers must ensure their staff have appropriate opportunities to rest and enjoy their accrued entitlements and, generally, this leads to a healthier and more engaged workforce. However, business disruptions can and do happen. Ensuring your Covid policy is up-to-date and undertaking good consultation with employees can lay the foundation to manage whatever circumstances arise.

If you have any difficult annual leave conversations ahead and would like additional support, please contact us.

[1] Privacy Act 2020 Principle.