COVID–19 Family Law/Leases/Employment Updates
We understand this a stressful and confusing time for all. Here are some key points to help from our family, commercial and employment teams.
Existing Parenting Plans/Orders
If you have an existing parenting plan/order you can continue as normal to exchange children between 2 households in line with your agreement but only if the households are in the same town/city. If the households are outside of the same town/city then the children must remain with the parent that they were living with at 11:59 pm 25 March 2020 and that parent should offer as much video chat/Facetime between the other parent and the children as possible until the lockdown is lifted by the Government. The paramount consideration at all time should be the best interests of the children. The safety and well–being of the children is the paramount consideration so if changeover cannot be effected in line with the plan/order then the Family Court encourages parents to be flexible and think of their children’s needs first.
For those with supervised access, this may not be possible during the lockdown due to health reasons. Please contact your supervised access provider to discuss.
The Family Court is still accepting urgent without notice applications in relation to care of children, PPPR and family protection matters. So if you need urgent legal assistance with a court application please contact our family law team to discuss. We are working remotely and ready to assist you.
Rent for Commercial Properties – Does it Still Need to be Paid?
Prior to the Canterbury earthquakes, commercial leases generally did not contain any provisions which contemplated the inability to access premises due to circumstances beyond both the landlord’s and tenant’s control. At that time the landlord was said to have fulfilled its obligations by having the premises available and the tenant’s obligation to pay rent in full remained.
Following the earthquakes the ADLS Deed of Lease (a commonly adopted form of commercial lease) was updated to include provisions to deal with a situation where premises could not be accessed. Clause 27.5 was added to address payment of rental and outgoings in an emergency situation.
Clause 27.5 makes provision for rent and outgoings to abate by a “fair proportion” where premises are not able to be accessed and used for their intended purpose due to an emergency. The current Covid 19 Level 4 lockdown situation falls squarely within that category.
The key question is what constitutes a “fair proportion”. This will depend on the specific circumstances of both tenant and landlord and the extent that the premises cannot be accessed. Relevant considerations may include whether the tenant is able to operate all or any part of its business from the premises or remotely. The tenant will also likely be storing all or some of its equipment in the premises during the period of the lockdown and will have rights to return to the premises once the lockdown ends. The length of the lockdown may also be a relevant consideration along with the respective positions of both landlord and tenant. There may well be other factors arising out of the specific nature of the premises and the tenancy (e.g. an essential service being allowed to operate albeit on a reduced capacity). Because each situation is unique, we recommend that landlords and tenants contact us to obtain specific legal advice as to what a “fair proportion” would be in their particular circumstances.
What if you don’t have an ADLS Lease Sixth Edition 2012? Get in touch with us. You may have an older ADLS lease, a bespoke lease or perhaps one of the versions produced by the New Zealand Property Council. If this applies to you, we suggest that you get in touch with us and we can provide you detailed advice about your options.
Employment – Wage Subsidy Update and Redundancies
Changes to wage subsidy scheme
On Friday further changes to the government’s employment support package were announced. If you or your employer applied for the wage subsidy before then, the rules in place at the time of the application continue for the application.
Businesses can still receive $585.80 for their employees who work 20 or more hours per week, and $350 for those working less than 20 hours per week. However, they need to commit to not making any employee for whom they have claimed the subsidy redundant during the 12 week subsidy time period. We previously explained who can apply for the subsidy in our earlier eBites article – it’s wide ranging.
Applicant businesses still have to try their hardest to pay their staff at least 80% of their normal wages, but the government clarified that if that’s not possible then they have to at least pass on the money received under the subsidy. The exception is for any employees who earn less than the subsidy amount, and in that case the business can use the balance of money for the payment of other staff wages.
Remember, nothing in the wage subsidy scheme overrides normal employment requirements. Both employers and employees must act towards each other in good faith. This means that employers have to consult with their staff about the subsidy and the provision of information about them to the government for the application.
If you’re an employer, talk to us. We advise written records of this process be kept so you don’t get in trouble at a later date. The same applies if you want to reduce employee wages, to say the subsidy or 80% levels. A proper process and written documentation is necessary and it will help you for the subsidy process and in avoiding costly personal grievances.
Important considerations before making staff redundant
Many businesses will be considering making staff redundant. Under pressure, some businesses may be tempted to move quickly and without carrying out a proper consultation process. That would be a mistake. Even if a business has a good reason, skipping the consultation process or not doing it properly can result in employees raising personal grievances for unjustified disadvantage or dismissal.
Given the changes to the wage subsidy scheme the first question employers must ask themselves (for any employees listed in the application) is whether they applied for the wage subsidy scheme before or after 4pm on Friday 27 March:
- If you applied before, you must make best endeavours to retain employees and to pay them 80% of their normal pay, however you are still able to make staff redundant if absolutely necessary.
- If you applied after 4pm on Friday, you must keep your staff in employment for the entire subsidy period.
- If you haven’t applied for the subsidy or your application is declined these rules won’t apply.
Following that, businesses must consider the alternatives and consult with their employees. Reduced hours and pay, taking of annual leave or redeployment to another part of the business are all avenues to be worked through. Likewise, is other financial assistance or tax relief available?
Contact us today for specific employment advice about your circumstances. Our team are here to help.