Coronavirus: Fletcher Building staff pay uncertain during month-long lockdown

Thursday, 26 March 2020

All but some staff selected by Fletcher Building chief executive Ross Taylor were subject to pay uncertainty during the lockdown.

Fletcher Building staff do not know whether they will be paid after next Friday.

On Monday, after the Government announced the month-long lockdown, Fletcher Building told staff that from Friday March 27 until Friday April 3, they would be put on special leave.

Internal correspondence to staff seen by Stuff showed that applied to all but a few exemptions approved by the chief executive Ross Taylor.

Staff were told on Monday they would be on special leave for a week from Friday, but they don't know if they will be paid after that.

Fletcher Building told staff the Government's wage subsidy programme would determine what happened after the special leave period ended.

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'We need to plan for a range of possible outcomes ranging from a timely resolution, to an extended period where many of our businesses are unable to operate.

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'In practice, this means we now need to manage our business in an environment with no production, no sales, and therefore no money coming in at least for weeks.'

Staff were told special leave was available regardless of whether they had previously taken special leave or medically instructed self-isolation.

A Fletcher Building spokeswoman said it was engaging with the Government to get further clarity around options that were available to support staff beyond April 3.

'Our approach is to give our people as much certainty and be as transparent as we can right now based on current circumstances.

'We appreciate this is an unsettling time and we are doing everything we can to support our people.'

On Wednesday the company told the NZX that it was cancelling the dividend and suspending a share buyback, as New Zealand's Covid-19 lockdown forces most construction projects to close.

Taylor said that since its half year results in February, Fletcher had continued to trade largely in line with expectations.

But the 'significant escalation of government protection in New Zealand and Australia will have a material impact on our operations and our full year 2020 financial results'.

To preserve its funds, the company was cancelling the dividend which was due in April and suspending the on-market share buyback.

Under the essential services list, construction companies carrying out work related to essential services and critical infrastructure could trade during the four-week lockdown.

Also included were all entities involved in building and construction required immediately to maintain human health and safety at home or work and those that were involved in building and resource consenting necessary for the above purposes.

The Government has put in place a wage subsidy scheme, in which the government would cover 20 per cent of a worker's wage to keep them employed.

The $150,000 cap on this scheme was lifted on Monday, meaning larger firms will be able to claim it for all their staff if they experience a 30 per cent monthly revenue drop.

On Thursday Finance Minister Grant Robertson said $1.5 billion had already paid out to more than 244,887 workers under wage subsidy scheme.

Unite Union national secretary Gerard Hehir said while he was not aware of the Fletcher situation, some big multinational firms were trying to disregard their legal requirements, citing uncertainty.

'There is no excuse. I just don't buy that these big companies that qualify for wage subsidies and could extend their credit under new provisions by banks would not pay staff,' Hehir said.

'It's problematic that employers think because of the restrictions of trading in this lockdown they can flout their minimum entitlements.'