Employer ordered to pay former employee for unpaid minimum entitlements…

An employer has been ordered to pay a former employee over $21,000 for unpaid minimum entitlements. 

The employee, who began work in 2003, ceased work in October 2014. A dispute later arose whether or not the employer had paid the correct amount of wages, public holiday and annual leave entitlements. 

The ERA awarded the employee $21,150 plus interest as a result of finding that the employer, who was described as an experienced business man, had not made the correct payments. The investigation meeting was held in December 2018, over 4 years after the employee has ceased working for the employer.

While the employer had some wage and time records, it was not able to show that the employee was paid correctly.

This again demonstrates clearly that it is important to keep accurate records, including after employees cease to be employed.

Ben Ruback

Employment Lawyer Wellington

Employer ordered to pay almost $34,000 after it illegally charged an employee to keep employment...

An employer has been ordered to pay an employee almost $34,000 because the employer was illegally making the employee “pay back” part of his wages.

The employee worked for the employer between December 2011 and February 2017, and during most of this time the employee was making weekly payments to the employer of approximately $200.

The employer initially explained these payments as rent, however, at no time did the employee reside at the premises owned by the employer. The employer later changed its story which further questioned the employer’s credibility.

The ERA found that the payments were more than likely to have been required by the employer to support the employee’s immigration application.

The employer was paying the employee at a rate which met the required threshold for immigration, but the payments back to the employer by the employee meant that the employer did not actually pay at the correct rate as contained in the employment agreement.

The ERA described the employee’s weekly payment as premiums which were illegally sought and received by the employer.

The employee was awarded the total amount of premiums paid plus interest.

Under New Zealand law, it is illegal for an employer to charge an employee a fee for their employment. In recent cases it has been seen that some employers have exploited migrant workers by charging them money in exchange for giving them a job, so the employee can obtain work visas.

If an employer engages in this type of behaviour, not only will it be required to pay the money back to the employee, but in addition, the ERA is likely to impose penalties.

Ben Ruback

Employment Lawyer Wellington

$40,000 compensation for bullying and overwork…

The Employment Relations Authority has upheld claims for personal grievances against two employers of the same employee in relation to claims that she was bullied and harassed at work and was overworked beyond her required hours without compensation.

In relation to the first employer the ERA found than the employer failed to provide a healthy and safe working environment.  The employer had knowledge of bullying and harassment by a manager as well as requirements to work extra hours without pay.  The ERA held that the employer failed to take any real steps to deal with these issues.  The employer was ordered to pay $15,000 compensation for the emotional distress suffered by the employee for the failure to provide a healthy and safe working environment.

In addition, the employer was ordered to pay $6,471 unpaid wages for the extra hours worked over and above the contracted hours.  The employer failed to provide any wage and time records and therefore the ERA accepted the employee’s calculations of the overtime worked.

The employee resigned from that employer and took up employment with a second employer which was part of the same group of companies.  She did this because she thought that the new employer would provide her with fixed hours and a better working environment.  However, that did not prove to be the case and she continued to be subject to an unsafe work environment and requirements to do excessive overtime, which was unpaid.  She was also once again subjected to bullying and harassment.

The employee suffered a breakdown as a result of the conduct of the employer and resigned from her employment claiming constructive dismissal.  This claim was upheld.  She was awarded three months lost wages and $25,000 compensation for the hurt and humiliation, for the failure to provide a safe working environment and for requiring excessive overtime.

Employers need to be aware that they must provide a healthy and safe working environment and that includes safety from bullying and harassment and also overwork.  A failure to take steps to deal with these issues will result in significant compensation awards to employees who suffer as a result of the unsafe workplace.

Alan Knowsley

Employment Lawyer Wellington

Law clerk unjustifiably disadvantaged by employer…

The Employment Relations Authority has upheld a claim by a law clerk that they were unjustifiably disadvantaged by their employer.  The employer had issued a verbal warning in relation to her work practices.  However, the warning was issued before the employer gave the employee an opportunity to comment on the reasons for the warning and was therefore invalid.  The ERA found that the warning should not have been given until the employee had been told of the allegations relating to performance and given an opportunity to respond to the allegations first. Giving the warning first showed that the decision had been predetermined.

The ERA awarded $2,000 compensation for disadvantage over the verbal warning.

The employee also brought complaints of bullying and constructive dismissal but both of those were rejected by the Employment Relations Authority.  The employer’s requirements for the employee to follow proper processes with her work were not unreasonable and the employee’s decision to resign from her work was not as a result of any improper actions by the employer.

Alan Knowsley

Employment Lawyer Wellington

ERA orders employer to pay $3k over social media comments

The Employment Relations Authority has ordered an employer to pay $3,000, after it breached a Record of Settlement, which included a clause that the employer and employee would not make disparaging comments about one another after the Record of Settlement was signed.

The employer posted harmful comments about the former employee on Facebook. This caused the employee to raise it with his new employer and subsequently led to the employee leaving his new employment.

The ERA ordered the employer to pay a fine of $3000. The ERA said it was to serve as a deterrent to others.

This is a timely reminder that a Record of Settlement is a legally binding agreement and once it is signed, the terms must be adhered to. If a party does not comply with the terms, penalties can be imposed by the ERA such as in the case above.

Ben Ruback

Employment Lawyer Wellington

$500,000 cost of failing to enforce existing health and safety policies…

The District Court has ordered a company to pay over $500,000 in fines and reparations, after it was found that it had failed to enforce the necessary health and safety policies which were in place.

In 2017, an employee died in an incident where a dump truck he was operating rolled down a bank. The employee was not licensed to drive the heavy vehicle and had never driven the vehicle on a public road before.

His supervisor knew that he was unlicensed, but took no action. The Court found that although the company did have the necessary health and safety policies in place, they were not communicated to the employees, or monitored/enforced by the employer.

All employers should ensure that the company’s health and safety policies are not only in place, but are understood and followed by all employees.

Ben Ruback

Employment Lawyer

Employee awarded $9,000 for one day’s work …

In a recent case the Employment Relations Authority ordered an employer to pay $9,000 to a woman who worked for one day as a trial period, without pay.

Following an interview, the woman was invited to undergo a trial period. However, after completing the work she was told that all of her work was part of an unpaid trial. The employer said that it did not consider her an employee as she had only completed one day of work, and that they did not pay for people to undertake trial days.

The ERA considered the woman to be an employee, even though the parties had not yet signed an employment agreement. The woman was awarded $9,000 which included payment of a four week notice period.

Employers may ask prospective employees to undertake a workplace trial. However, if an employee undertakes a full day’s work, or contributes to the commercial activities of the business, then he or she may be considered an employee, regardless of whether or not the parties have signed an employment agreement or have reached an agreement about performing an unpaid work trial.

Ben Ruback

Employment Lawyer Wellington

Failure to keep wage records costs employer…

The Employment Relations Authority has upheld a claim for short paid wages, Kiwisaver and holiday pay.  The employee claimed that she had not been paid her base salary, nor had she been paid for extra hours worked following the departure of another employee.  She claimed she worked 70 hours per week for a four week period instead of her contracted 30 hours.

The employer denied that the employee had been short paid and denied that the employee had worked the additional hours. However, the employer was not able to produce any wage and time records to back up their claim as to what the employee had worked or had been paid.

The employer was ordered to pay $7,000 short paid wages and Kiwisaver contributions plus holiday pay to be calculated.

The Employment Relations Authority is obliged to accept a claim by an employee if they have been hampered in the preparation of their claim by the lack of records from the employer.  It pays to keep full wage and time records to be able to show what the employee was paid and how many hours they worked.  A failure to do so can prove very expensive.

Alan Knowsley

Employment Lawyer Wellington

 

 

Workplace fatality leads to over $466,000 in penalties…

The Blenheim District Court has convicted and fined a construction company following the death of one of its employees in a motor vehicle accident.

The employee was not licensed to drive a heavy vehicle but was allowed to drive a dump truck on a public road by his supervisor.  This was contrary to all of the company’s health and safety policies, but they were not communicated properly and not enforced. 

The vehicle rolled down a steep bank killing the employee.  The Court held that the risks of allowing an unlicensed driver to drive a heavy vehicle on a public road was not only serious but also obvious.  The company was ordered to pay $115,000 in reparation to members of the employee’s family and was also fined over $350,000.

Just having policies in place is of no use if those policies are not communicated to staff and enforced.  All employers should have processes in place to not only develop policies on health and safety in their workplace, but to ensure that they are communicated to all staff and to check up that the policies are being implemented at all times.

Employment Lawyer Wellington

Unjustified dismissal following poor process…

The Employment Relations Authority has upheld a claim for unjustified dismissal after an employee was told he was being laid off due to lack of work.  The ERA held the dismissal to be unjustified because there was no proper process followed by the employer.  It did not give the employee any opportunity to give feedback on the proposed dismissal for lack of work and the employer did not advise the employee he was entitled to a support person during the process.  The ERA ordered that the employee be paid $4,450 for lost wages and $7,000 compensation for the hurt and humiliation suffered.

If the employer had followed a proper process of letting the employee know they were considering having to lay him off due to a lack of work, had provided him with an opportunity to give feedback and to be assisted by a support person, then the dismissal would have been upheld as being justified. The employer would have not been liable for any lost wages or compensation.  It is important to make sure you get the process right if you want to avoid expensive lessons in employment situations.

Alan Knowsley

Employment Lawyer Wellington

Employer ordered to pay $8,700 wage arrears…

The Employment Relations Authority has ordered an employer to pay wage arrears to an employee after a claim for short payment of wages.

The employee alleged that they worked a certain number of hours per day, but were only paid for the hours set out in their employment agreement.  The employer challenged the employee’s claim that they worked a longer number of hours, but could not produce any time sheets to show the hours the employee worked.

In addition the employee could only produce wage slips where the payments did not accord with the employment agreement, nor were the hours the same as the employer claimed the employee worked.  The Employment Relations Authority therefore preferred the evidence of the employee as to the amount of hours worked and ordered the employer to pay the $8,700, being the shortfall between the amounts paid and the hours the employee claimed to have worked. 

The onus is on an employer to keep records of hours worked and wages paid. If they cannot produce such records to the Employment Relations Authority or Labour Inspector then the ERA and Labour Inspector can assume that the employees claim for wages is correct. The employer becomes liable for whatever wages the employee claims.  It is vital therefore to keep full records and produce them to the ERA and Labour Inspector when required.

Alan Knowsley

Employment Lawyer Wellington

90 day trial period invalid due to no notice…

The Employment Relations Authority has upheld a claim for unjustified dismissal under a 90 day trial period.  The trial period provided that if termination was to be given under the trial period that the termination could be given immediately.  The ERA held that this termination without any period of notice was invalid because a termination without notice cannot be a notice period.  A notice period is required to notify the employee when in the future the dismissal will take effect.

This was not a situation where there was no notice period specified in the termination clause.  In that situation, notice would be reasonable notice and that would be interpreted by the Court, usually to equal any other notice periods in the contract or based on the pay period.  However, in this case the clause did provide a notice period, but one which had stated was of immediate effect.  As this was invalid there was no notice period and therefore the termination was itself invalid.

As the notice given was invalid the employee was unjustifiably dismissed and was awarded $7,600 in lost wages and $15,000 compensation for hurt and humiliation.

It appears that the employer was trying to be tough when it drafted its employment agreements to provide for no notice period under a 90 day trial and this has come back to bite them.  If they had just specified a shorter notice period, then that would most likely have been upheld by the ERA and the termination would have been justified.

Alan Knowsley

Employment Lawyer Wellington

Employee fixed terms genuine and reasonable…

The Employment Relations Authority has upheld the fixed term nature of an employee’s contracts despite the employee being employed on a series of fixed terms from 2010 until 2019.  To be on a fixed term contract the employer and employee must sign a written agreement which details the fixed term nature and the reasons for it.  Those reasons must both be genuine reasons and based on reasonable grounds.

The ERA decided that the employer here did have genuine reasons and they were based on reasonable grounds.  The employee was a teacher aid for special needs children in a school and the fixed term nature of the agreements offered to her was because of the funding arrangements for special needs children.  The school could not be sure of the number of special needs children attending nor of the funding provided for each teacher aid.

The ERA held that these were genuine and reasonable reasons to offer fixed terms because there was no other mechanism for employing the teacher under the collective agreement which would enable her employment to be terminated without having to pay redundancy pay which the school was not funded for.

The Employment Relations Authority distinguished an earlier case where a special needs teacher had been found to be a permanent employee.  In that case there was a waiting list of special needs children and therefore no danger that the funding would cease where as in the present case the funding could cease at any time that a student or students stopped being enrolled at the school and there was no waiting list of students.

When considering whether there are genuine reasons on reasonable grounds it is important to work through those justifications to ensure that they will stand scrutiny of the Employment Relations Authority should the nature of the employment be challenged by the employee.  It may not be possible to rely on the fixed term nature of the agreement if the reasons are not upheld.  That would expose the employer to an unjustified dismissal claim and substantial damages for lost wages and hurt and humiliation.

Alan Knowsley

Employment Lawyer Wellington