Wage subsidy: Go home, stay home

Friday July 24, 2020 Written by Published in Economy
 Liana Scott, of Muri Beach Club. 20031622 Liana Scott, of Muri Beach Club. 20031622

Government says companies can send workers home on minimum pay – but tourism industry calls for community work instead. 

Workers on minimum wage subsidy can stay home and collect their pay if there is no work available for them, says the Ministry of Internal Affairs.

A local resort owner says this new rule is “contradictory” to what the Ministry of Finance had advised them earlier.

Liana Scott, the general manager of Muri Beach Club Hotel, said it would also discourage those employers who are still making their employees work for the wage subsidy.

“I personally don’t agree with this because there are so many things people can be doing during this time,” said Scott, who is also the acting president of the Tourism Industry Council.

“If they don’t have any more work, they can get their staff to do community work like repainting the church or cleaning the beach.”

Government earlier warned against workers collecting wage subsidy but not coming to work, saying they were breaching the initiative.

But now Internal Affairs say workers on government’s minimum wage subsidy can stay home and collect their pay under a sort of furlough, defined as an extended leave with or without pay.

The ministry said this was not a recognised practice under the Employment Relations Act 2012.

However, it said Covid-19 leave with pay as a form of furlough is possible.

“The wage subsidy can also be used for the continued payment of the wages to the employee on minimum rate if there is no new work programme available for the employee.

“The employee can go on leave and continue to receive the wage subsidy in order to maintain the employment relationship.”

If the Covid-19 leave with pay option is applied, the employer will not be required to top up the pay, and can treat it as leave without pay for the purpose of assessing the accrual of other leave entitlements, the ministry said.

This Covid-19 leave with pay option is primarily available in circumstances where no work is presently available for the employee but the employer believes that it is likely work for the employee will be available in the future.

However, the ministry said should the situation not improve and work is still unavailable, redundancy or leave without pay may then become appropriate considerations for the employer to have in these cases. 

In cases where the business is closing down and unlikely to reopen, redundancy/termination are appropriate options to be considered and discussed between employers and their employees, the ministry added.

The ministry also said any redundancy must be as a result of a genuine restructuring of an employer’s business that means the employee’s position is no longer available. 

Sandrina Thondoo, Internal Affairs’ Director Labour and Consumer Services, said employers and employees have approached them for advice and recommendations on the various ways possible to end an employment agreement.

Thondoo said the ministry had developed a “Covid19: Ending employment” guideline which offers clarity around the resignation, termination for conduct or performance and redundancy, as per the Employment Relations Act 2012.

“Ending employment is often a stressful and difficult moment for both the employers and employees, especially during these challenging times of Covid-19.”

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