New Zealand Law Society - Car dealer to pay upwards of $320,000 for employment breaches

Car dealer to pay upwards of $320,000 for employment breaches

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Second-hand car dealer 2 Cheap Cars Ltd has been ordered to pay a $70,000 penalty, and is to be liable for upwards of $250,000 in arrears, following a Labour Inspectorate investigation.

The Employment Relations Authority (ERA) made the order after the Inspectorate uncovered serious breaches of minimum wage, holiday pay, and record keeping.

“There is simply no excuse for employers to not meet their obligations and as this case demonstrates, it can be costly,” says Labour Inspectorate regional manager Loua Ward.

The Inspectorate found some workers were owed a total of $20,835 of entitlements. Those arrears have since been paid.

However, the systemic nature of the breaches meant almost all employees were affected.

2 Cheap Cars were issued with an Improvement Notice in November 2016 to undertake an audit of their records, which, so far, has uncovered an estimated amount upwards of $250,000 in arrears.

A second external audit is being undertaken, and sets out to ensure all current and former workers have received their correct entitlements.

“The Labour Inspectorate takes these kinds of breaches very seriously,” says Ms Ward.

“Not only did the employer breach the rights of the people working for them, they also attempted to gain an unfair advantage over their law abiding competitors.

“A number of the employees were migrant workers who may not have been aware of all their rights and entitlements.

“Every worker in New Zealand must be paid at least the minimum wage for every hour worked, along with their holiday and leave entitlements.”

2 Cheap Cars will also be placed on 24 month stand down from recruiting migrant workers as a consequence of not having complied with employment standards.