Peter Cullen, Partner at Cullen – The Employment Law Firm, discusses the uncertainty with employment contracts when it is revealed that employees have been working in a potentially unsafe building. He cites the recent closure of Courtenay Central, which houses Reading Cinemas, as an example. A prudent employer with the means to do so, will continue to pay their workers for a time, he writes.
Wellingtonians are becoming used to buildings being closed because they pose an earthquake risk. A number of other buildings around the city are yellow stickered, which means there is a risk and they must be strengthened.
Reading Cinemas is a very popular cinema complex for people in Wellington. Its closure will be regretted by many. The Courtenay Central complex was closed for several months following the 2016 Kaikoura earthquake while strengthening and repairs were carried out and the adjoining carparking building was demolished.
You may be puzzled that a building which was restored as recently as 2017 is now abruptly closed once again for earthquake-related reasons. Was it not properly repaired last time and were the thousands of people who have since been in the building at risk?
Wellington City Council has applauded the proactive response to the draft engineering report and protecting public safety.
Reading Cinemas appears to be making efforts to bear the brunt of the closure. People with tickets for the Courtenay Place cinema were reassured that they could redeem their tickets elsewhere or get a refund. While those who frequent the cinema and other retailers are affected, the greatest impact will be on those who work within the complex. To their credit, Reading Cinemas is reported to be honouring its rosters and continuing to pay workers during the closure. Of course, that will probably depend on how long the complex is closed and whether it is likely to re-open.
Affected workers and their families will want to know whether employers are required to continue to pay workers while premises are closed.
Where a building is severely damaged or destroyed by an earthquake and alternative premises are not available, the employment contracts are likely to be frustrated. A contract will be frustrated, and therefore terminated, when an unforeseen event or change of situation makes it impossible for the contract to be performed.
But where you deal with a lesser problem such as a building which can be repaired, or which is undergoing further tests as to its safety, the situation is less clear cut.
A prudent employer with the means to do so will continue to pay their workers for a time.
Workers may be prepared to take some of their annual leave should the closure go on. But there comes a point where, because of uncertainty around the length of the closure, an employer can commence a process of making affected workers redundant.
Some of the businesses in Courtenay Central may have other branches in the area where staff can be offered work. But others will not be able to do that. Regardless of the prognosis for the re-opening of a building, employers must remember their good faith obligations to communicate with staff.
The Christchurch earthquakes brought home to all of us the devastation of earthquakes. Disasters like earthquakes and the Pike River Mine have resulted in far-reaching health and safety obligations. While building owners have a responsibility under the Building Act to ensure the buildings are assessed and are structurally sound, the Health and Safety at Work Act renders employers and building owners equally responsible. They must proactively identify and manage risks as far as reasonably practicable.
If health and safety is compromised due to a problem with a building, the employer and building owner cannot point the finger at one another; they are both liable.
The common law has long recognised the right of workers to strike or walk out if the workplace was unsafe. Now the Health and Safety at Work Act confirms the right of workers to refuse to carry out work that they believe would expose them to a serious health and safety risk.
Those who have visited Courtenay Central and the Reading Cinemas since they reopened following the 2016 Kaikoura earthquake may be troubled. They will wonder whether the complex was safe from its reopening until it closed again. Workers will ponder even more so that question because of the amount of time they spent in the complex. These are issues which should be answered and made public in the future.
Courtenay Central should be commended for closing the complex with alacrity once it received the draft report. A recent media report revealed new information that the seismic strength issues are confined to the Reading Cinema levels. The slow improvement of building safety in Wellington can be frustrating and arduous, but we all want to live and work in a safe environment.
Peter Cullen works for both employers and employees and has built upon his earlier experience gained as an industrial advocate. In 1994 Peter established his own firm, Cullen-The Employment Law Firm. Peter convened the Wellington District Law Society Employment Law Committee from its inception until 2004. He is a regular speaker and commentator to the news media on industrial law issues. Peter has represented clients before the various employment institutions including the Court of Appeal. He uses his legal skills to impart clients with helpful advice upon which to base their decisions. His strengths lie in his in-depth knowledge of New Zealand employment law and his abilities as an advocate.