Embattled SkyCity Entertainment Group is cutting wages by 20 per cent, offering redundancies and giving two weeks' notice that all annual leave must be taken.
Chief executive Graeme Stephens wrote to employees saying the company is "reducing waged staff to 80 per cent of their average wage, asking waged employees to voluntarily take annual leave to top up their wage to 100 per cent, accepting voluntary redundancies from waged employees".
Joe Carolan, the UNITE union delegate representing around 1000 SkyCity Auckland and Hamilton workers, said although those people were all at home during the month-long Level 4 alert, they still deserved full pay.
Carolan said the changes were illegal and he had complained to Justice Minister Andrew Little.
Stephens said salaried employees would remain on full pay but were given a fortnight's notice to take all annual leave. Involuntary redundancies for some salaried employees was planned.
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Staff are also being offered five days' annual leave from 2021, he said.
SkyCity says it has about 4000 staff in New Zealand and around 1000 in Adelaide.
Carolan said it was unfair waged staff were treated differently to salaried staff and called for Stephens to share some of his approximately $3m pay with waged employees.
Stephens said SkyCity wanted to keep as many staff as possible, "but our business will not be the same for the foreseeable future. We expect that we will be a predominantly domestic business once we reopen and start rebuilding and we believe it will be a long time before the world and our world recovers to anything like it was."
Carolan said SkyCity was using the crisis to reduce pay and disadvantage workers and that was unfair.
Stephens said the business had to change fast.
"This is a big shift for SkyCity. We are quickly adapting our business model and employee base to this fundamental change in our operating environment to ensure we are a viable business for many years to come," Stephens wrote to staff.
The company was claiming the Government wage subsidy for all employees, including casual, waged and salaried staff, he said.
"While this subsidy is helpful, it doesn't cover all SkyCity's significant wage and salary costs and we are therefore taking the following steps to help reduce our wage and salary costs for the period where the business does not have an income," Stephens said.
"The information regarding the options available to employers, including the wage subsidy, has been challenging to keep up with, but you can be assured that SkyCity has taken external legal advice at every step to ensure that we are, at all times, complying with the relevant employment law," Stephens wrote.
"By taking these measures, we are able to take a considered approach to reducing headcount for our waged and salaried employees which will help in ensuring we can reopen and operate our business post this period of uncertainty."
Earlier this month, SkyCity said it been hit by the tourism downturn to the tune of $55m but it expected an extra $85m insurance in the next month from October's NZ International Convention Centre fire.
Before New Zealand went to alert Level 4, the company expected normalised ebitda for FY20 to be $230m-$250m and normalised NPAT for the financial year to be $85m-$100m.
But that was based on the best information available then and reflected the continued uncertainty about Covid-19 to the financial year-end. The updated guidance also assumed that all SkyCity properties would remain open for business.
But then Adelaide was shut, followed by SkyCity's Auckland, Hamilton and Queenstown properties.
Shares are trading around $1.70 on the NZX, down from $4.10 in January.