Employer to pay employee 6 years’ wages…

The Employment Relations Authority has ordered an employer to pay an employee 6341 hours of unpaid wages at the minimum wage rate as well as 8% for holiday pay after the ERA found there was an employment relationship between two friends.

The employee’s claim for unjustified dismissal was not upheld, the ERA decided that the direction from the company that the employee should stop working until the dispute over unpaid wages was resolved, did not amount to a dismissal.

The ERA also awarded penalties against the employer of $20,000 for failing to maintain proper wage and time records, no provision of an employment agreement, and failure to comply with the Holidays Act and the Minimum Wage Act. This sum was paid straight to the employee.

This relationship was unique because there was no agreed employment contract, hours of work or remuneration. Rather, it began from a kind act of providing lodging for a friend following a breakdown in the friend’s marriage. The employer believed that free lodging was sufficient compensation for the work performed.

Employers must be aware that even if there is no intention to create an employment relationship, it can be formed inadvertently. Once formed, the employer must comply with all the legal requirements.

Under New Zealand law, all employers must keep written employment agreements, and accurate time and wage records for all employees. They must also comply with annual leave and holiday payments, and pay at the rate of at least $16.50 an hour (which is the minimum wage as at 1 April 2018).

Alan Knowsley

Employment Lawyer Wellington

Employer penalised nearly $1.4 million following employee’s death…

An employer must protect the health and safety of its workers, so far as reasonably practicable.

An employee of a mining company died after the loader he was driving tipped over in an underground mine. The employer, that had only purchased the mine weeks prior, had identified the risk and a solution, however it failed to effectively mitigate the risks in implementing the solution.

The employer has since developed innovative safety measures to prevent a further accident.

The employer took appropriate steps to reduce the financial stress upon those affected by the employee’s death. The employer paid voluntary reparations, co-operated with the Worksafe inspection, and pleaded guilty promptly.

While the employer had already paid voluntary reparations of $660,000, the Court imposed a fine of $378,000, further reparations of $350,000 and legal costs of $3,672.

In this case the employer’s culpability was assessed as moderate. The maximum potential fine was $1.5 million.


Alan Knowsley
Employment Lawyer Wellington

Employer to pay $50,000 following unfair process after keeping complainants anonymous…

The Employment Relations Authority has ordered an Auckland College to pay a teacher $50,000 following two personal grievances, one for unjustified disadvantage and one for her unjustified dismissal.

The teacher was dismissed after an investigation into allegations that lasted over a year. The investigation was the result of complaints about the teacher’s performance made by students in one of her classes. The complaints focused on the teacher being grumpy and unapproachable, being late for class, and generally not assisting the students to learn properly.

The Employment Relations Authority said that the College failed to treat the teacher fairly because it refused to provide the names of the complainants and refused to provide a sufficient degree of detail regarding the complaints, which meant the teacher could not properly respond. The College only provided the teacher with generalised complaints about her performance.

In order to give an employee the ability to respond appropriately, an employer should provide dates, times, and sufficient detail about the allegations. In this case, the College failed to do so.

There are circumstances where an employer can withhold the identity of a complainant, however it must only be in exceptional circumstances.

The Employment Relations Authority said that it is a basic right that one may confront one’s accuser, know that person’s name, hear them openly make their allegation, and have a proper opportunity to respond.

Alan Knowsley

Employment Lawyer Wellington

$70,000 penalties for incorrect pay…

The Employment Relations Authority has fined an employer $70,000 in respect of breaches of correct payments for 25 of its employees.  The company had not correctly paid annual leave, alternative holiday pay and public holidays pay and also did not pay employees the hourly rate in their contracts.

The defence put forward by the company was that the Director did not agree with New Zealand employment law and ran his business “how it is in Japan”.

Unsurprisingly, the Employment Relations Authority was not impressed with that defence.  The employer has paid $23,927 to its employees being the incorrect pay shortfalls.  The ERA said that the penalty to be imposed would have been almost $229,000 but after taking into account the employer’s cooperation with the Labour Inspectors and the payment back to employees plus the financial circumstances of the employer it reduced the fines to a total of $70,000.

The company has also been banned from sponsoring visas for migrant workers for two years.

Alan Knowsley

Employment Lawyer Wellington