COVID-19 information for Downer New Zealand employees

DOWNER NZ CEO UPDATE | COVID-19

As we've all been adjusting to this new way of working, whether you're working at home or out on the field providing essential services, we've also been working hard to find ways to continue to support our people through the Government's COVID-19 Alert Level 4 shutdown.

Under the current restrictions, our operating revenue is reduced to 25% of normal. This means that there is much less money coming into the business, and this is a lot less than the costs it takes to keep the business running, with the largest cost being salary and wage payments. This means we're challenged in sustaining our business and so we need to take some actions in order to get through this together. 

We've assessed the health of our company and we believe with a combination of the contribution from the Government through the wage subsidy (covers 40%), a significant contribution from Downer, and a contribution from our people, we can get through.

We want to keep as many people employed through this period as possible and make sure that everyone has sufficient income to provide for themselves and their families. We believe we are in a position, with the government wage subsidy, to pay 80% of base pay and are therefore seeking a 20% contribution of base pay from our people to support on-going employment of all Downer people.  In order to be eligible for the government wage subsidy we need to endeavour to pay every employee 80% of their base pay. If we are unable to utilise the wage subsidy, the consequences in terms of money and jobs for our employees will be much worse, and will include redundancies and leave without pay.

As required, as we seeking your consent to reduce your base pay by 20% as your contribution to retaining as many jobs as we can. This will mean receiving 80% of your base pay. This will not apply to those for whom this cut would reduce their annual salary equivalent below $50,000 p.a. ($24.07 per hour for a 40 hour per week-waged workers) as we think this will cause undue hardship. It will also not apply to those that are providing essential services in the front-line, in crews or on sites, as we acknowledge that for many of them they would prefer not to be doing this and are doing this for the good of Downer and New Zealand.

Please click on the button below to watch my video update and find out more.

Based on what we know now, we think this is our best shot to remain a relatively intact business that can pay as many people as possible and will be able to provide on-going employment as we move through this unprecedented crisis. 

In order to get through the COVID-19 crisis the following measures will need to apply:

  • Five days special paid leave based on ordinary pay that has been paid for the period from 26th March to 1st April 2020
  • 80% of base pay from the 2nd April. 

Note the 80% of base pay will not apply in the following situations:

  • For any period in which you are required to work as an essential service provider working on the frontline or a working site;  you will be paid at 100%
  • If your fulltime annual equivalent salary is less than $50,000 ($24.07 per hour for a 40 hour waged workers);  you will be paid at 100%.  
  • If your fulltime equivalent salary is $50,000 ($24.07 per hour for a 40 hour waged worker) or more and 80% would reduce you below this amount then you will be paid at a $50,000 or $24.07 per hour
    •  If you elect to take annual leave or long service leave during this period you will be paid at the full value of this leave .  Annual or long service leave cannot be used to top-up the 80% payment.

This will apply for an initial four week period, the original expected period for the lockdown, and may be extended to a maximum of a 12 week period based on level of restrictions and on-going impact to Downer. 

It is important to note that this will only work if we get commitment from everyone.  If we do not we will have to implement other ways to reduce salary and wage costs, and we would not then be able to access the full Government wage subsidy. 

I know that this may raise concerns for you, but we need to do what we can so that we keep as many people employed through this period, and we need you to play your part. I encourage you to continue communicating with your manager as we go through this process 

Please click on the button below to complete the declaration form and confirm your agreement on the proposed COVID-19 Pay Scheme.

I want to thank you all for your continued support and commitment during this challenging time. 

Ngā mihi nui.

Stay safe and healthy. 

Steve Killeen

CEO, Downer New Zealand