The Court of Appeal has found that 'essential' workers who did not work during New Zealand's Level 4 lockdown, as directed by their employer, should have been paid the minimum wage under the Minimum Wage Act 1983.
Gate Gourmet provides in-flight catering services for passenger aircraft. The employees were employed for a minimum 40-hour week for which they were paid the minimum wage.
During the initial Level 4 lockdown that began in March 2020, Gate Gourmet remained working as an 'essential service' but due to the lockdown restrictions and the greatly reduced commercial aircraft movements there was very little work available. Gate Gourmet advised its employees that the company would partially shut down operations and conditional on receiving a government wage subsidy, employees would receive 80% of their normal pay. Employees were given the choice to use their annual leave entitlement to take leave or to use their entitlement to 'top up' their pay to 100%.
Gate Gourmet directed its employees to stay home unless they were rostered on and due to the greatly reduced amount of work available, most employees remained at home.
The employees issued legal proceedings arguing that Gate Gourmet had breached the Minimum Wage Act. The company argued that employees were not entitled to the minimum wage because they were not actually working.
The Employment Court found that when the employees stayed home, they were not working under s6 of the Minimum Wage Act and therefore Gate Gourmet was not required to pay the employees the minimum wage.
The Court of Appeal has now overturned that judgment ruling that the minimum wage is payable for the hours of work that employees had agreed to perform but did not perform, because of the direction from their employer not to come to work.
The Court of Appeal emphasised that its ruling does not take away the ability for an employee to agree with the employer to take leave without pay or reduce the agreed hours to be worked (the minimum wage would then apply only to the reduced hours of work).
To read the Court of Appeal's judgment, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.