A recent Employment Relations Authority (ERA) case has again highlighted the lawful requirement for all employers to have employment agreements in place for their employees.
A Northland petrol station has been hit with a five figure fine after it was found to have committed multiple serious breaches of employment law following a Labour Inspectorate Investigation.
The Investigation found that IXL Petroleum and Gas Limited, trading as a G.A.S station franchise and located in Ruakaka, breached its obligation to pay at least the minimum wage and correct holiday pay. It was also found to have made unlawful deductions from employees’ pay.
Labour Inspectorate Regional Manager Loua Ward stated “One staff member regularly had their wages deducted – with the employer paying them for 20 hours per week, despite their own records showing the employee worked significantly longer hours. Another employee reported being charged for customer drive offs and the employer seeking a premium in exchange for supporting their visa – both of which are illegal in New Zealand.”
The Employment Relations Authority issued a $14,000 penalty to the company, on top of the $14,500 in arrears which was to be paid to four employees for lost pay.
“I consider a final total penalty of $14,000 sufficient to both punish and deter this company and its owners, and to deter other small businesses from similar activities,” member of the Authority Nicola Craig wrote in her decision.
Loua Ward also warned businesses that failing to meet employment law not only results in fines, it could also damage a company’s reputation. “Every person employed in New Zealand must be provided with their minimum employment entitlements – anything less is unacceptable. Not only do these cases mean penalties, if consumers don’t believe you pay your employees appropriately it can damage the brand as a whole.”
It is a lawful requirement for employers to have Employment Agreements in place for employees – and all employees, full-time, part-time, permanent, fixed-term or casual, are entitled to a copy of their employment agreement in writing.
The Employment Agreement must have terms and conditions which are at least as good as the minimum rights in the law. Employers who breach employment law are subject to enforcement action which could include fines of up to $50,000 for individuals, and $100,000 for companies.
In addition to the fines, other consequences can involve public naming of the company who breached, employees responsible can be banned from management positions and involved parties other than the employer (such as directors and senior managers) can now also be held accountable for breaches of employment standards.
Act Now!
If your company doesn’t have Employment Agreements in place for your employees, or has outdated ones which need updating to meet current legislation, we can help! Give us a call on 0508 424 723 or email info@safebusiness.co.nz.