Company director to pay over $20,000 for employment breaches…

The Employment Relations Authority has penalised the director of a company that failed to supply wage and time records and copies of Employment Agreements over $20,000.  This penalty is to be paid personally by the director. 

$4,400 unpaid wages was because the company had failed to pay minimum wage rates to its employees, $15,000 penalty for failure to pay minimum wages and $2,000 penalty for failure to supply wage and time records and employment agreements.

In setting the penalties the ERA took into account that the Labour Inspector had given the employer several opportunities to supply the requested wage and time and employment agreement records and he had offered to do so on two occasions but failed to provide any records.

Alan Knowsley

Employment Lawyer Wellington

Amendments to employment legislation…

Changes to employment laws will be coming into effect on 6 May 2019.

The changes include a restriction on 90 day trial periods to employers with less than 20 employees (currently any employer is able to have a 90 day trial period) and re-introduction of set rest and meal breaks.

If an employee works between 2 and 4 hours they are entitled to a 10 minute rest break which is paid. 

If they work between 4 and 6 hours they are entitled to one paid 10 minute rest break and one 30 minute meal break (unpaid).

If they work between 6 and 8 hours they get two 10 minute paid rest breaks and one 30 minute meal break.  For over 8 hours there is a corresponding increase in the number of breaks which matches the extra hours worked.

Meal breaks and rest breaks should be at times agreed between the employee and employer, but in the absence of agreement they are taken in the middle of the work period between 2 and 4 hours and at 1/3 and 2/3 from between 4 and 6 hours.  Between 6 and 8 hours they are taken at 1/4, 1/2 and 3/4 of the way through the work period.  For over 8 hours the breaks are worked out in a corresponding fashion.

For agreements entered into before 6 May 2019 they will be able to contain the 90 day trial period and that will still be effective after the change to the legislation. 

However, any meal break arrangements entered into before 6 May will be overtaken by the requirements in the Act unless the contract provides for more than the minimum breaks.

Alan Knowsley

Employment Lawyer Wellington

$100,000 damages for poor dismissal process…

The Employment Relations Authority has ordered an employer to pay $106,000 to husband and wife employees who were both dismissed with no proper process.  The ERA found that the employer presented each employee with new employment agreements for lesser roles than their current employment agreement and demanded that these be signed.  The employees both refused to sign the agreements and were then dismissed by the employer with no process being followed.  Even if a process had been followed there was no justification for dismissal, because changes to employment agreements cannot be unilaterally imposed by an employer.

The ERA awarded over $62,000 for lost wages since the dismissals plus $8,600 for unpaid wages from the period when they were employed and $30,000 compensation for hurt and humiliation suffered by the employees from the manner of their dismissal.

The ERA also warned the directors of the employing company that if the company did not pay the damages awarded that the directors could be held personally liable and be subject to imprisonment.

 

Alan Knowsley

Employment Lawyer Wellington

$200,000 fine for breach of health & safety standard...

The District Court has ordered a company to pay $200,000 after a man fell from his mobility scooter and was fatally injured. The accident happened when the man’s mobility scooter attempted to traverse a footpath which had been damaged by heavy vehicles during the development of a housing site.

Under New Zealand law, all persons conducting business are responsible for the health and safety of, not only their employees and those on the work site, but also those that may be affected by the worksite (including those that are not directly on site).

The company did not identify the damaged footpath as a risk. However, an investigation into the accident found that the company ought to have done so. In order to comply with the company’s health and safety obligations, the company should have blocked off the damaged footpath and established a safe alternative route to pass the worksite.

A fine of $100,000 was imposed and reparation of the same amount was ordered. The fine was reduced from a starting point of $550,000 as a result of mitigating factors and financial circumstances. The maximum penalty in a case of this type is $1.5 million.

A representative from WorkSafe said that workplaces must think broadly about the impacts of their activities upon the health and safety of everyone at a workplace. Other people potentially at risk from work activities include volunteers, customers, passers-by, visitors or workers from another entity.

The man may not have been fatally injured had the company in this case taken all steps reasonably practicable to prevent such an accident.


Ben Ruback
Employment Lawyer Wellington

Employer ordered to pay over $188k after major breaches of employment standards ...

Following a complaint by an employee to the Labour Inspectorate, an employer has been ordered to pay over $103,000.00 to an employee for unpaid minimum wages and other entitlements.

The evidence before the Employment Relations Authority was that, at times, the employee worked 92 hours per week but was not paid at the minimum wage rate prescribed by New Zealand law.

When the employee complained about the long hours, the employer told him that he could not afford to employ other staff. The employer said that the employee could leave and have his visa cancelled or the employee could pay staff to work in his place out of what he was paid.

The employer did not keep accurate wage and time records, nor was a holiday or leave record kept. The employer produced a reconstructed record shortly before the hearing, however, the ERA found that the record was not reliable. The ERA instead relied on other records which were made at the time, such as a food diary kept by the employee and WhatsApp messages between the parties.

The employer was ordered to pay the following:

• $81,565.50 for minimum wage arrears;
• $21,448.10 for arrears of other minimum entitlements such as annual leave; and
• Interest.

The employer was ordered to pay a penalty of $61,600.00 for breaches of employment standards. In addition, the Director of the company and her husband were ordered to pay $12,000.00 each for being party to the breaches of the employment standards. While the husband was not a director, he was a person who exercised significant influence over the management and administration of the company and was able to be penalised under the Employment Relations Act.

In total, the ERA ordered payment of $188,500.00. This shows that not only must employers ensure compliance with minimum employment entitlements such as the rate of minimum wage and annual leave entitlement, but employers must also keep accurate wage, time and leave records.

Note the current minimum wage is $16.50 per hour, however, that rate is set to increase to $17.70 on 1 April 2019.

Ben Ruback

Employment Lawyer Wellington

New minimum wage rates...

From 1 April 2019 the minimum wage will rise to $17.70 per hour.

The starting out and training wages will increase to $14.16 per hour from the same date.

The Government has also announced that the rate will increase to $18.90 from 1 April 2020 and to $20 per hour from 1 April 2021.

Alan Knowsley

Employment Lawyer Wellington