The recent earthquake in Christchurch had many employers wonder what to do with their employees when the workplace was destroyed or damaged to such degree that a safe working environment could not be provided. It appears that the main advice these employers received was that they should discuss the situation with the employees and encourage them to take leave. Which is not what employers and employees need to know – the main question is whether an employer can dismiss employees under such circumstances because they can no longer employ them.
Newsletters and articles from major law firms say that the law is not clear. But its difficult to see whats unclear about such a situation. If an employee is availabe for work, ie. offers his time and skills to come to work as agreed in the employment agreement, the employer must either allow the employee to do so (and pay), or, reject the offer and pay.
There is an old English saying:
As long as I pay my cook his wages, it doesn’t matter that I am eating out.
However, this can not apply when the employer can not offer any work. In such case, the contract becomes frustrated, meaning that neither party can enforce the contract. That the doctrine of frustration is applicable in an employment law context was also just recently acknowledged by the Employment Court in A Worker v A Farmer (2009).
So it seems to me that the law is actually quite clear.