On 25 March 2020, Aotearoa New Zealand moved into Level 4 lockdown in response to the COVID-19 pandemic. Imagine you are an employer with a thriving aviation business in the tourist industry, operating scenic flights in key tourist centres around the country, employing 20-30 pilots and other staff. You are legally not able to operate, and in any case, there are no tourists to spend their money on the services you provide. What do you do?

Within a week of Level 4 lockdown you initiate a restructure, proposing for all pilots to become casual employees and receive the 12-week government wage subsidy. Once the subsidy runs out, everyone gets paid per flight. If pilots do not agree, they face redundancy.

Can an employee really be said to have consented to changes to their employment contract in a situation where they were under threat of redundancy?

Or let’s look at an employer who unilaterally puts all pilots onto 80% of their normal pay, receives the government wage subsidy but still expects pilots to work 4-5 days a week even if there is little/no work to be done. 

Or there’s the employer who places all pilots on leave without pay and who strongly suggests the pilots use their existing leave entitlements in order to get paid.

How about the employer who, after lockdown, institutes new policies designed to maximise efficiency which involves encouraging pilots to come in to work early (for flight planning, pre-flight checks etc), but discourages pilots to write it on their timesheets, potentially impacting minimum wage entitlements and/or duty time!

Or what about the employer whose core business is not affected directly by COVID but uses the availability of recently redundant/furloughed pilots to remind pilots to be aware of the rules, including the extension of flight and duty times.

What do all of these situations have in common? They highlight the inherent inequity in the employment relationship, where one party is dependent on income (for work done) in order to pay the bills and look after their families, and which has led us to question the legality, reasonableness and even morality of actions taken by some employers.

From an employer perspective, there is genuinely no work to be done – they are prevented from providing work through no fault of their own.

However, the nature of an employment relationship is different from any other contractual arrangement precisely because it is a relationship, one reliant on mutual trust and confidence. It is in these unprecedented times where employers have asked for incredible flexibility, and which employees (potentially reluctantly) provided, such that the unbalanced nature of the relationship becomes apparent.

Can an employee really be said to have consented to changes to their employment contract in a situation where they were under threat of redundancy? Furthermore, when an employee is under imminent threat of redundancy, what implications does this have for a consultation that legally should be conducted in good faith?

Is this really the best way to conduct ourselves considering the employment contract is not merely just a contract, it is in the context of a relationship and one an employee is dependent on for income in order to live?

In the coming months, as we see more decisions being made in the industry in the wake of COVID-19, let us consider and implement those which are most reasonable and dignity-affirming to all parties in the employment relationship.