$2,000 penalty awarded to employee after employer breaches settlement agreement...

The Employment Relations Authority held that an employer had breached their settlement agreement by failing to make payments to its employee for moneys owing, including wages and statutory entitlements. The employer was also found to have breached the contract by not returning the employee’s laptop after it had been cleaned.

The ERA held that delays in completing its obligations under the settlement agreement were not deliberate but were still unacceptable. The ERA stated that being unable to meet your obligations under a contract because of financial reasons was not a valid excuse to not comply.

The ERA noted that the breaches were not ongoing and found that the employer had since satisfied its duties. However, the ERA noted that a penalty was necessary to reflect their disapproval of the employer’s conduct and to act as a deterrent to other employer’s in order to emphasize that settlement agreements must be adhered to.

The ERA awarded the employee $2,000 as a penalty for the employer’s breach plus $1,000 costs and over $70 for a filing fee.

Alan Knowsley
Employment Lawyer Wellington