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Is it time to update Business Interruption / Force Majeure clauses in your employment agreements?
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Heading into Covid-19 lockdown businesses relied on business interruption and force majeure clauses in employment agreements to make decisions about how they would manage staff and for payment of wages and salaries.
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Many business interruption and force majeure clauses refer to ‘unforeseen’ events outside the control of the parties. It was after the Christchurch earthquakes that the use of business interruption clauses in employment agreements was increased.
There is now discussion being had about whether, because of the nature of Covid-19 or other pandemics, lockdowns could still be regarded as an ‘unforeseen’ event. This is something that could be tested in time in the Employment Relations Authority or Employment Court.
Here at Grow HR our approach has always been to consider and minimise risk for employers. Our current assessment is that there is merit in updating business interruption clauses for new agreements and new starters in response to the current situation and speed at which lockdowns could occur. We have for this reason updated our business interruption clause wording to extend beyond what could be determined as ‘unforseen’.
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If your agreement templates do not have coverage for business interruption / force majeure events, or if the provisions are limited to unforeseen events only, please contact: sonya@growhr.co.nz who can help with providing updated wording.
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Funding from the RBP Business Advisory Fund
Grow HR also offers services that are registered with the COVID-19 Business Advisory Fund. Small- and medium-sized businesses may qualify for funding to help pay for advisory services to support them through the Covid-19 outbreak. Find out more by visiting www.regionalbusinesspartners.co.nz
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