Modifying employment agreements because of COVID-19

Find out about options to deal with the impacts of COVID-19 in the workplace.

From 15 August 2023, there is no longer a legal requirement to isolate when someone tests positive with COVID-19. This page is currently under review. Read COVID-19 and the workplace for more information.

Employers and employees need to work together to keep each other safe during the global COVID-19 pandemic. Regular employment law still applies to all employment relationships – regardless of the circumstances that we find ourselves in. This includes:

  • having a written employment agreement for every employee, and doing what that agreement requires
  • keeping each written employment agreement up to date, including documenting any changes that affect rates of pay or hours worked
  • meeting legislative and any relevant contractual requirements for changing employment arrangements
  • complying with all minimum standards legislation and the Employment Relations Act. 

Deal with each other in good faith

Employers and employees, and their representatives must discuss in good faith the implications of COVID-19 on their working arrangements.

Good faith includes the following three elements:

  • Parties must not act in a misleading or deceptive way.
  • Parties must be responsive and communicative.
  • Before making a decision, which may result in employees losing their job, the employer must give the affected employees sufficient information to be able to understand the proposal and then give them a proper opportunity to comment.

Good faith is also wider than this. It is more than just following the letter of the law. It involves treating others fairly using common sense.

Where changes to current working arrangements are proposed by an employer, there are specific good faith requirements that must be followed. Any changes made need to be consulted on and agreed to by both parties.

Any agreed change to the employment agreement should be recorded in writing. Having the agreed terms and conditions in writing is a legal requirement, whether the change is temporary or permanent.

In response to the impacts of COVID-19, employers and employees may be considering changes that involve workplaces closing temporarily or reductions in hours. These changes require additional good faith or other process arrangements, including consulting with employees and their representatives, providing time to respond to proposals and considering their comments.

During the COVID-19 response, there may have been circumstances where consultation on changes could reasonably have been shortened if the employer genuinely needed to make rapid adjustments to cope with their circumstances. Shortened processes must still occur in good faith and provide opportunity for workers to seek advice. 

Normal consultation processes should be followed for any proposed workplace changes. This includes normal consultation timeframes and provision of information.

Good faith requirements

Guidance on workplace change 

Flexible working

Example 1: Agreeing to undertake different ways of working

Working as usual may be difficult for employers and employees due to the impacts of COVID-19. Employers and employees may want flexible ways of working during times of high COVID-19 transmission (for example, staggering start times to avoid peak times for public transport). Parties should discuss these matters and agree to arrangements in good faith. These changes can be temporary or permanent. The length of time for this change must be stated in the employment agreement variation.

Any changes must be recorded in writing and signed by both parties, and the parties must be given reasonable time to consider the proposal.

Employees can ask also to change their work arrangements, place, hours, or days. Employers must legally consider this in good faith.

Changes to hours

Example 2: Agreeing to a temporary reduction in hours

Generally, if an employment agreement sets the employee's hours of work, then an employer can’t change them without the employee's agreement. This must be negotiated in good faith. If the employment agreement says that an employer can change the hours of work, the employer still has to act fairly and reasonably before they do.

In some situations (such as genuine financial, commercial or economic problems, or genuine restructuring of the business), reducing an employee’s hours may be put forward as an alternative to redundancy.

Alternatively, employers may propose changes to work times or moving to shift work arrangements to manage physical distancing requirements.

In these situations, the employer must follow the usual process for workplace change, which includes giving the employee a fair opportunity to consider and respond to the proposed change.

Any agreed changes must be recorded in writing and signed by both parties, and the employee must be given reasonable time to consider the proposal.

Workplace change process

Example 3: Returning to normal hours

Some employers and employees may agree to a reduction in hours during certain periods of the COVID-19 response. This could be a temporary or permanent reduction. The length of time for this change must be stated in writing in the employment agreement variation.

However, employees should be paid at their contracted rate, for each and every hour they work regardless of the COVID-19 situation, unless otherwise negotiated in good faith, which can never be below the minimum wage.

Any agreed changes must be recorded in writing and signed by both parties, and the employee must be given reasonable time to consider the proposal.

Hours of work

Changes to job description

Example 4: Agreeing that the employee will undertake alternative work where the employee is unable to do their existing job or to cover for other employees who are unable to work

An employer can’t change the job description of an employee without the employee’s agreement. In some situations, an employer may propose that the employee does a different job. This could be a temporary change until the employee can resume their existing job, or until other employees who usually do that work resume their work.

In these situations the employer must follow the usual process for workplace change which includes giving the employee a fair opportunity to consider and respond to the proposed change.

Any agreed changes must be recorded in writing and signed by both parties, and the employee must be given reasonable time to consider the proposal.

Workplace change process

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Page last revised: 14 September 2022

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