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Swine Flu - Who Pays?

By Peter Cullen, Principal of Cullen – The Employment Law Firm

We have had a number of inquiries on whether an employer is liable to pay the wages of its workers who might be off work because of swine flu.

If an employee is ill whether because of swine flu or for any other sickness the normal rules apply. That means that if an employee has sick leave owing they will be paid sick leave while they are away. If they do not have sick leave when they are too sick to report to work they will be on leave without pay. The statutory minimum sick leave entitlement is five days sick leave after six months service and a further five days for each subsequent year’s service. Sick leave can accumulate up to a total of 20 days entitlement if it is not used. Sick leave can be used if the worker in question is sick or injured or their spouse or partner is sick or injured or if a person who depends on the worker in question for care is sick or injured.

One potential problem for employers is if the employer tells its staff not to come into work because of the risk of them catching swine flu. In that case it would seem that the employer is liable to pay their wages regardless of their sick leave entitlement.

Another problem that might arise would be an employee coming to work with swine flu. If that happened and the employer knew and did not send them home then the business owner is likely to have breached their obligation to provide a safe workplace and to treat its employees fairly and reasonably. If other workers contract swine flu then they are likely to look to the employer to pay their lost wages for the time they are off. The employer should have ensured the workplace was safe by sending the ill worker home.

If a third party such as the Government or Ministry of Health says that people are not allowed to go to work at a particular establishment then the employer would probably not be liable to pay wages. Many employers may still want to pay the wages to soften the blow to their workers and the choice would be theirs.

If there is someone with swine flu in the workplace and other workers decide to stay away from the workplace because of the danger of infection the situation is much more complicated. If there was a common purpose to the withdrawal of labour the situation is akin to a strike on health and safety grounds. If the individual worker just stays away to protect themselves without their employer’s permission there is likely to be an ongoing dispute between worker and employer. At the heart of the matter will be how real the danger to the employee really is. Workers would be ill advised to simply absent themselves from work without taking proper legal advice.

Clearly if swine flu becomes a major problem in New Zealand the impact on employers will be significant. Some employees may have a better sick leave entitlement than the statutory minimum that I have mentioned, such as open ended “wellness leave”. Because sick leave can be used to care for a partner or the worker’s dependents a significant amount of sick leave is likely to be paid out by the employers. Productivity is almost certain to decline dramatically at the same time. That would have a big impact on small and medium businesses. Larger employers are better placed to deal with a short term crisis such as swine flu having greater resources. Almost certainly in the event of a pandemic most employers would be more generous than the minimum obligations they may have either through their employment contracts or because of the minimum entitlements that apply through legislation.

This will be a difficult period for workers and employers alike.

If you need to contact Peter for further information, please email:

HRINZ would like to thank Peter Cullen who gave us direct permission to re-publish this article for our members to read.


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Disclaimer: This information has been written for and submitted to HRINZ for publication and has been published in good faith for the general information of HRINZ Members of the Institute. HRINZ accepts no legal responsibility for the contents of the Knowledge Base and appropriate professional advice and assistance should be sought in particular cases.

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