Employers’ obligations to keep records...

Employers are obliged to keep accurate wage and time records of all employees.  This includes things like annual holidays owing and taken.  In recent cases employees have been fined large amounts for failing to keep those records or keeping inaccurate records.  The Employment Relations Authority penalised one employer $40,000 for under recording hours worked.  This had resulted in the employees being short paid $87,000.  As well as the fine the employer also had to suddenly find the extra $87,000 it had underpaid its employees.  It probably also had to find itself a whole new lot of employees too!

Another employer was penalised $16,000 for filing to keep proper wage and time records and failing to provide written employment agreements.  An employer must provide every employee with a written employment agreement which covers at least the names of the employer and employee, the job title, hours of work, place of work, rate of pay and provisions relating to public holidays and restructuring.  As well as providing a copy to the employee the employer must keep a signed copy in its records.  As well as a signed copy the employer must also keep a copy of every draft copy of the agreement given to the employee to consider.

This is so the ERA and Labour Inspectors can see how any changes to the agreement progressed through the various drafts.  In this case the $16,000 fine would have been $56,000 but for the poor financial circumstances of the employer and its inability to pay.

In another recent case the inability to pay only resulted in the fine being spread out for payments over two years.  This was designed to help keep the employer going (so the employees didn’t lose their jobs) but penalised the employer for its poor behaviour.

In another case an employee had resigned but thought they had been underpaid so asked the employer for a copy of the wage records.  The employer failed to immediately provide these.  The ERA penalised the employer $2,000 for the delay in providing the records.  The fact the employee had resigned was not a reason to withhold the records.

It pays to know your obligations as an employer for record keeping and to comply with those requirements.

Alan Knowsley

Employment Lawyer Wellington

Constructive dismissal by change of hours...

The Employment Relations Authority has upheld a personal grievance claim for unjustified disadvantage and unjustified dismissal following the resignation of a shop employee.  The employment agreements allowed the employer to change the employee’s hours of work following consultation and notice.  In this case however the ERA found that the clause did not provide for a reduction of hours below the 40 hours per week provided for in the agreement and in addition the employer presented the change as an announcement with no prior consultation.

The unilateral change of hours, reduction of hours and change of duties by the employer made a resignation foreseeable and this amounted to a constructive dismissal.

The employee was awarded $9,620 lost wages and compensation of $15,000 for hurt and humiliation.

The receipt by the employee of ACC payments following her resignation did not reduce the lost wages payable by the employer.  Any reimbursement to ACC was a matter between ACC and the employee and the employer remains liable for lost wages following a constructive dismissal.  The same would have applied if the employee had gone on a social security unemployment benefit or similar.

Alan Knowsley

Employment Lawyer Wellington

Under the table payments cause problems...

The Employment Relations Authority has rejected a personal grievance claim for unjustified dismissal of a retail assistant.  The employee claimed she was on regular hours of employment and when she advised the employer that she was pregnant the employer did not offer her any further shifts.

The ERA found however that the employee was employed on a casual basis and no obligation to accept work when offered and no obligation on the employer to offer any shifts.  The claim for a dismissal therefore failed as the employer was not obligated to offer any further work to the employee.

The sting in the tail though for the employer is that the ERA commented adversely on the employer’s failure to provide a written employment agreement for the employee, paid the employee under the table and did not deduct PAYE and did not file employer monthly statements with the IRD.  The employer also failed to discuss KiwiSaver and did not pay holiday pay or the minimum wage.

No doubt following the decision the employer can expect a visit from both the IRD and the Labour Department with prosecutions the possible outcome.  Failing to comply with your obligations as an employer and then getting into a public fight with an employee where the outcome is reported in the media and in official publications is perhaps not the smartest move when attempting to pay employees under the table.

Alan Knowsley

Employment Lawyer Wellington

Failure to provide a safe workplace…

The Employment Relations Authority has upheld a personal grievance for unjustified disadvantage and unjustified dismissal following the medical retirement of a cereal food worker.

The employee had suffered an injury to his arm while lifting at work and was on a return to work programme.  The employer, however, decided to dismiss for medical incapacity.

The ERA held that the employer’s mind was made up to dismiss for incapacity before it met with the employee and he was not given a proper opportunity to comment.  Interestingly the ERA found that the notes made by the employer of the meetings did not properly record what had taken place at the meetings and had been drafted up sometime later.  The employee was therefore unjustifiably dismissed and there was an order for lost wages of $11,000 plus $25,000 compensation for the hurt and humiliation suffered by this long term worker upon his dismissal.

In relation to the claim of an unjustified disadvantage because of an unsafe place of work the ERA found that there was a health and safety manual regarding training on heavy lifting but that there was no proof that that training had been provided to the employee.  The failure to provide training on heavy lifting meant that the employer had failed to provide a safe work place.  In addition to the finding of unjustified disadvantage the ERA also held that a copy of the decision should be sent to WorkSafe in relation to the employer’s failures.  This may in due course also result in a prosecution of the employer.

If your health and safety manual provides for certain things to be done to prevent injuries, then it is vital that those things are done and that training is provided to every employee on all aspects covered by the health and safety manual.  A failure to comply with your own manual is going to be fairly fatal to any defence to a claim of failing to provide a safe workplace.

Alan Knowsley

Employment Lawyer Wellington