Question :
I’m in the travel business (outbound tour operator) and looking at domestic pivots etc etc to reorient the business but we’ve had no revenue for 4 months. I’ve told my staff then wage subsidy ends they will be stood down on no pay as the company temporarily hibernates until international travel resumes. With the announcement today that wage subsidy will not be further extended I’m thinking it would be better for my staff for me to end their employment so they can claim the Covid 19 support benefit for people who have lost their jobs. I can then look to rehire them at some point in the future when cash starts to flow again. Under NZ employment law can I do this? I’ve communicated widely with my staff about the dire situation and they are expecting to be stood down. I’m trying to find a better outcome for them. Any advice gratefully received. 

Question submitted 06/07/20 @ 01:07pm
Industry: HR & Talent
  • Hi there,

    Great that you are thinking about the best course for your staff at such a difficult time. You can terminate staff by reason of redundancy where you have genuine business reasons for doing so, which it certainly sounds like you have. Before making any decisions, you will need to work through a consultation process which will involve, in short, putting your proposal to staff, providing them with any relevant information, discussing it with them and keeping an open mind to all possible alternatives. There is no legal issue with rehiring redundant employees in the future, but be aware that they will be under no obligation to accept any future offer of employment. There are potential issues with the legality of an unpaid stand down which you may wish to seek further advice on if you intend to continue down that path.

    Happy to chat.


    Thanks Phil – with regard to standing staff down on no pay – what legal issues do we need to take into account – we have no funds at this stage to pay for legal advice – have you come across any articles that talk about standing staff down on no pay and making sure we comply with employment law.

    Hi Steven,

    Take a look at the article below:


    The legal and contractual obligations section of this article sum it up.

    In short, changes to terms of employment (including hours of work and pay) can only lawfully be made by agreement, generally speaking. There may be exceptions to that but those would be specific to the circumstances and the terms of the employment agreement so would require more specific advice than possible in this forum.

    I believe that there is redundancy support for employers available through Work and Income at the moment – 0800 778 008.

    Hope that helps,


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