In our October 2020 newsletter we highlighted two Employment Relations Authority decisions dealing with pay issues arising out of the March 2020 COVID 19 level 4 lockdown. The full Employment Court has recently released its decision in an appeal of one of those, Gate Gourmet New Zealand Limited v Sandhu  NZEmpC 237.
Gate provides in-flight catering services. It was an essential service, and could therefore operate during the level 4 lockdown, but there was little work for employees as few aircraft were flying. Some employees remained working and others were told to remain at home.
Gate obtained the COVID 19 wage subsidy and paid employees who did not work 80% of their normal pay. There was a separate dispute as to whether this was agreed with the employees and/or their union. As their normal pay was the minimum wage, paying employees only 80% meant they received less than the minimum wage.
The Authority found that these employees were not working due to Gate’s decision, rather than the lockdown decision. They were therefore “ready, willing and able to work” and had to be paid the minimum wage.
Gate appealed to the Employment Court, and argued that employees were only entitled to the minimum wage for “work” they had actually performed. They argued being “ready, willing and able” to work was not the same thing as actually working. Business NZ supported this position and argued that it was consistent with advice provided by the Government at the time of the level 4 lockdown and the introduction of the wage subsidy.
By contrast, the employees and the Council of Trade Unions argued that the minimum wage must also apply to situations where an employee is ready, willing and able to work but the employer decides that the employee will not work their contracted hours.
The majority of the Court held that an employee is only entitled to receive the minimum wage if s/he actually works. Because Gate’s employees were not working at the applicable time, they did not have to receive the minimum wage. Gate was therefore not in breach of the minimum wage legislation.
However, the Chief Judge of the Court disagreed with the majority and referred to the legislative provisions stating that no deductions may be made from an employee’s entitlement to receive the minimum wage other than in very limited circumstances. Those circumstances include, for example, time lost by reason of the worker’s illness. The Chief Judge’s reasoning, therefore, was that if a deduction is permitted to be made in respect of absence due to illness (when an employee has not worked), it must be the case that the law does not always require the employee to have actually “worked” in order for the initial entitlement to receive minimum wage to have arisen.
This appeal was limited to the narrow point about the statutory right to receive the minimum wage. It did not touch on whether there was a contractual entitlement to be paid during the lockdown.
We anticipate that it is likely that the decision will be appealed to the Court of Appeal.
In a separate note, we understand the other relevant case (Raggett v Eastern Bays Hospice Trust t/a Dove Hospice  NZERA 266) which had been challenged to the Employment Court, will now not proceed. Unfortunately, this means that there will now not be a decision providing the clarity many employers are seeking about important pay issues which arose from the lockdown.