NEWS

Law at Work- June 2016

Every Worker Has Rights...

Or do they?

- by  Emma Monsellier

The Employment Relations Authority's (ERA) message about needing to comply with minimum code legislation is still not getting through to many local businesses, despite their very public telling-off of Indian restaurant Zaika last month (click here for information on the Zaika case). It appears that there are still too many bad practices out there which are keeping Labour Inspectorates hot on the war-path of enforcing the country’s most basic minimum employment rights.

This week Auckland's ERA awarded almost a six-figure sum in penalties and damages against two South Auckland pub and bottle shop owners for failing to comply with an array of basic legal requirements. Directors of the two-related companies were held accountable by the Authority for flagrant breaches of the country’s fundamental provisions of New Zealand employment law, namely for failing to:

  1. Provide staff with individual employment agreements
  2. Keep wage and time records for each staff member
  3. Pay the minimum wage
  4. Provide statutory entitlements for staff who had worked in excess of twelve month’s continuous employment
  5. Pay staff for working a public holiday; dismissing staff in the absence of a valid and enforceable trial period 
  6. Pay wages at all for the first six weeks of staff employment

It is hard to imagine that this level of disregard for an employee’s most basic entitlements really exists in our society. However, as this latest decision just proves – this is reality and certainly goes some way to understanding why the government felt it necessary to increase the Inspectorates enforcement powers under the recent Employment Amendments Act 2015 which came into force in April of this year.

Unsurprisingly, the Authority was highly critical of the companies’ lack of regard for such basic entitlements and called into question the directors’ credibility and integrity by allowing such serious breaches to occur.

Their argument that staff had been paid over and above the minimum wage, “it was just paid in cash under the table” held little sway and indeed only “raised issues about the veracity of [the directors’] version of events that could not satisfactorily be explained.”


Coupled with their candid acknowledgment that neither company provided written employment agreements to staff, or kept any records of hours worked / wages paid, did little to discharge an employer’s legal burden of proving ‘on the balance of probabilities’  that they had any regard to basic staff minimum entitlements

The Authority felt there had been a real imbalance of power between the employers’ and their staff (those being young migrants with little or no knowledge of New Zealand employment laws). This ‘imbalance’ was considered a serious aggravating factor which needed to be punished. For this reason, penalties and damages were set at a high level with the aim to deter other like-minded employers from being tempted to employ staff in similar circumstances; those of which appear to be mainly prevalent in the catering and hospitality industries.

This latest case is intended to send a strong message to businesses about the need to comply with minimum code legislation – non-compliance is not acceptable. So, please do not give the Labour Inspectorate any cause to pay your business a visit!

If you need any information on what are considered to be New Zealand’s most basic minimum entitlements (or any other employment relation information), please do give our team a call - we’re only too happy to make sure you’re on the right path.

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