The Australian bubble – what happens if the bubble bursts?

Client update – June 2021

The Australian bubble – what happens if the bubble bursts?

All Australian states and territories are participating in quarantine free travel with New Zealand; however, an outbreak or border closure at either end could occur at short or no notice, which we have seen already.  That may leave travellers stranded in Australia, or quarantining in New Zealand, and if they are employees on holiday, fast running out of planned (and/or paid) leave.

Assessing holiday requests

The starting point, for both the initial request to travel overseas, and for an unplanned extension to time off work because the bubble has burst, is that the timing for taking annual holidays needs to be agreed between the employer and employee.  Next, and as part of that, it would be possible to agree that the employee was to bear part or all of the risk of a bubble bursting while on leave.  Once agreed, and if the relevant circumstance then arises, the parties would each have clarity about what to do.

Employers are also able to withhold agreement for an employee to take leave where reasonable.  This could conceivably be done when, for example, there was an inability for a business to cover the risk of an extended absence by an employee. However, an assessment of that would (again) need to be reasonable, and case by case.

We suggest it is sensible to have considered the possible scenarios and how those will be managed ahead of those arising.  This is useful in setting the scene in terms of expectations for both sides.  We are happy to assist you with preparing a policy, or to provide advice on managing this overall issue.

A border closure – does an employer need to pay?

The starting point is that if an employee is “ready, willing and able” to work, then yes.  So, in the event of stranding, if an employee can work remotely, and is willing to do so, they need to be paid.  The details of all of that will however be important to assess – again a good reason for an employer to look at this in advance.  Where an employee cannot work remotely while stranded in Australia or in isolation in New Zealand, a period of unpaid leave can be considered. 

However, if an employee is travelling for work, an employer is most likely going to have to treat the matter differently, because (generally speaking) but for work there would have been no travel – again a good reason to address this in advance. 

Holidays Act change

Recent changes to the Holidays Act have increased minimum sick leave entitlements.  After 24 July 2021, whenever an employee next becomes entitled to their sick leave entitlement, that entitlement will be to 10 days for each qualifying 12-month period (rather than 5 days).  Employees will also only be able to carry over 10 days per year, to a maximum entitlement of 20 days per year (which is the same as the maximum now).  The statutory change will override any wording to the contrary in existing employment agreements but updating these would reflect best practice.  This change is also separate to further changes expected to be made following the Holidays Act working group’s report, so watch this space.

A further potential change to the Holidays Act is also on the (distant) horizon.  The proposed change would introduce a new form of leave named “parent-teacher interview leave”.  This would provide employees with up to four hours’ of parent-teacher interview leave every 12 months.  It remains to be seen whether a note from the teacher will be required to obtain this leave!

For any advice from our employment law specialists, either call us on 04 801 5427, or contact us via email:

Paul McBride (Partner) – paul@mdjlaw.co.nz

Guido Ballara (Partner) – guido@mdjlaw.co.nz

Frances Lear (Senior Associate) – frances@mdjlaw.co.nz

Saadi Radcliffe (Solicitor) – saadi@mdjlaw.co.nz

Emma Rose Luxton (Solicitor) – emmarose@mdjlaw.co.nz

Disclaimer – this newsletter is necessarily brief and general in nature.  You should therefore seek professional legal advice before taking any action in relation to any matter addressed above.  © McBride Davenport James