A recent Employment Relations Authority case, Labour Inspector v Aulack Enterprises Limited, highlights the importance of ensuring that all employees have compliant employment agreements, that your wage and time records are accurate, and that employees are paid their legal entitlements.
Aulack operated a kiwifruit picking contract business. Following an investigation by a Labour Inspector, Aulack was found to have:
- failed to include mandatory clauses about wages and dispute resolution procedures in the employment agreements of five workers.
- failed to keep adequate wage and time records for six employees.
- failed to comply with the Inspector’s requirement to produce its wage, time, holiday and leave records.
- failed to pay the adult minimum wage at all times to two workers.
- unlawfully deducted money from the wages of one worker.
- failed to correctly calculate payment for an alternative holiday due to one worker.
- been liable to pay wage and holiday pay arrears of $487.65 to three former employees.
For the 16 breaches Aulack was liable for up to $320,000 in penalties.
The Authority found that the breaches were serious. They were aggravated by the fact that Aulack had been issued an improvement notice in 2014. Aulack’s subsequent failure to meet it legal obligations strongly suggested its deficient administration was deliberate rather than inadvertent or careless.
Another aggravating factor was the fact that most of the 250+ people who had worked for the business in the previous 12 months were either backpackers on working holiday visas or locals who were transient or casual. They were vulnerable to exploitation because they were less able to identify and pursue the correction of Aulack’s failure to comply with minimum employment standards.
Aulack was ordered to pay:
- $30,000 in penalties
- $487.65 in wage and holiday arrears
- Costs of $1,571.56
The government has signalled it will double the number of Labour Inspectors, which means that visits from Labour Inspectors asking employers to produce employment records will become more common. This case shows how important it is to be able to produce records that are complete and compliant.
If you would like further advice on keeping wage and time and holiday and leave records, or on ensuring your employment agreements are compliant, please email me: ShimaG@st.co.nz