New Zealand Law Society - Food court's employment law breaches costly

Food court's employment law breaches costly

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The Employment Relations Authority has required Northcote Shopping Centre foodcourt operator Food City Ltd to pay $126,897.93 in arrears to five Chinese workers who were employed as cleaners, along with a further penalty of $37,500.

The decision, Labour Inspector v Food City Ltd [2016] NZERA 326, says the penalty payment is made up of $17,500 for breaches of the Minimum Wages Act 1983, $10,000 for breaches of the Holidays Act 2003, and $5,000 each for two breaches of the Employment Relations Act 2000.

The breaches included a failure to pay minimum wage and holiday pay, to keep written employment agreements, wage or time records.

MBIE says that after being approached by the employees in August 2014, a Labour Inspector investigated the matter and found evidence of long running non-compliance.

The five employees worked from 10am to 10pm at the food court, six days a week, but were only paid the minimum wage for 40 of these 60 hours. They were not allowed sick leave, and some had to stop working due to their failing health. All five employees had permanent residence.

The Inspectorate filed in the ERA for recovery of minimum wages and holiday pay, with the matter then referred to mediation where the employer agreed to pay the arrears owed.

However with the employer not paying the agreed to arrears and amidst concerns that the company would be put into liquidation, the Inspectorate put a claim into the ERA to have the director made personally liable for the payment of arrears.

MBIE says this jolted Food City Limited into action, who then paid out the $126,897 in arrears owed to the five workers.

"Pleading ignorance is no excuse - providing employees with at least the minimum wage, holiday pay, and written employment agreements are basic obligations which we expect every employer in New Zealand to meet," Labour Inspectorate Regional Manager David Milne says.

"Taking advantage of employees is never acceptable, particularly vulnerable workers such as the migrants in this case who were older, did not speak English, and were unaware of their rights and entitlements in New Zealand.

"The Inspectorate will not hesitate to take these cases to the ERA, and the penalties and arrears awarded against this employer should send a strong message that this kind of exploitation will not be tolerated."

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