20 October 2021

Important considerations when contemplating mandatory employee vaccinations

In preparation for New Zealanders living with Covid-19 in the future, the Government has recently announced a ‘no jab, no job’ rule for education and health workers. While the Government has mandated vaccinations for workers in these sectors, it raises questions for other employers on whether they can make vaccinations compulsory for their employees.

The potential liability inherent in such an approach is complex and far from settled, as neither the Employment Relations Authority nor the Employment Court have ruled on its general legality to date. Complexities include both an employer’s requirement to maintain a safe workspace and the employees’ rights under both employment law and their own employment agreements.

Employer obligations to minimise harm

The obligation on Persons Conducting a Business or Undertaking (PCBU), which includes employers, to take all reasonably practical steps to eliminate harm or if that is not possible, to minimise harm to workers and others in the workplace, is clearly laid out in the Health and Safety at Work Act 2015. The duty to ensure harm is minimised in the workplace applies equally to Covid-19 and other risks.

Health and safety assessment

To understand whether a PCBU or an employer can mandate that roles are only performed by vaccinated workers, it must conduct a health and safety risk assessment to determine if specific roles require vaccination to comply with the organisation’s health and safety obligations (eliminate or minimise harm). This assessment should consider both the likelihood of an employee being exposed to Covid-19 while carrying out their duties, and what this exposure may mean for other people. The risk assessment should focus on the role rather than the employee performing the role, in consultation with the employee.

If the assessment identifies high risks associated with a role, employers can reasonably require employees in these roles to be vaccinated.  

Whilst this is an evolving area, if an employer fails in their obligations to maintain a safe workplace, they may be exposed to an investigation or prosecution under the Health and Safety at Work Act 2015. WorkSafe has provided guidance on assessing whether an employee might require a vaccination. 

Statutory liability insurance provides cover for inadvertent breaches of Acts such as health and safety legislation. It is therefore important that all employers ensure that every effort is made to comply with public health requirements when it comes to operating a safe work environment.

Ensuring that a business is compliant with health and safety regulations is a core duty of the company’s directors and so there is also a liability under the directors and officers insurance policy.

Implementing vaccination requirements

Once an employer has determined employees need to be vaccinated, appropriate legal advice should be sought on how to implement vaccination requirements to mitigate any potential liability from employment, privacy and discrimination-related risks, as these are currently untested in the courts. Implementation must be done in a fair and reasonable way.

Consultation and good faith obligations

It is important to comply with consultation and good faith obligations to employees, as set out in the Health and Safety at Work Act 2015. This Act requires employers to consult, cooperate and coordinate the management of Covid-19 health and safety risks with other organisations where health and safety duties overlap.

If an employee refuses vaccination, an employer must first consider a temporary (or permanent) move to a lower-risk role or work from home option, before contemplating a dismissal.

While current employees can generally decline to advise their vaccination status to their employer, there is more scope for employers to require new hires to be vaccinated or to disclose their vaccination status. The Ministry of Business, Innovation and Employment (MBIE) currently advises that an organisation can only ask job candidates if they are vaccinated when it is justified by the role’s requirements.

Employment disputes and employment practice liability insurance policies provide cover to employers for defending claims from both prospective and existing employees for personal grievances.

However, often these types of insurance policies require the insured to have taken advice from an appropriate employment expert prior to acting. In some cases there is even the need to first consult with the insurance company.

Contracting Covid-19 in the workplace

Another area of potential liability relates to an employee contracting Covid-19 in the workplace. Employers Liability insurance provides cover to an employer where an employee suffers a personal injury (which will usually include sickness and disease) that is not covered by ACC.

At this stage the advice from ACC is that “cover for the Covid-19 virus may be available” under section 30 of the Accident Compensation Act 2001. It is therefore possible that ACC may not provide cover.

As this is an evolving area of risk we strongly recommend that independent legal advice is sought prior to implementing any measures.

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One of our responsibilities as brokers is to ensure you have all the information you need to make informed decisions about the risks your business faces. Please note this information is generic in nature and not specific to any individual client situation.

If you have any questions or would like to find out how insurance can help cover your risks, please talk to your broker or contact us.

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