The Labour Inspectorate was called to investigate Food City over concerns about the hours and conditions staff were working under.  Some staff had to stop working because their health was failing, and Food City did not provide sick leave entitlements.  The inspectorate said Food City took advantage of vulnerable workers, who were older and did not speak English.

Cleaners are considered ‘vulnerable workers,’ under the ERA.   It was found Food City’s cleaners at the Northcote Shopping Centre food court, were working 12-hour days up to six days a week but only being paid only the minimum wage for 40 hours.

The Employment Relations Authority ruled Food City had breached the Minimum Wages Act, and had to pay $126,000 in arrears owed to the workers, and $37,000 in penalties.

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The recent ruling against Smiths City,  a large New Zealand retailer, for short paying staff who were expected to come to work before their normal start time for an unpaid  ‘pre-work’ 15 minute meeting, is a warning to all employers.

For at least 15 years, every Smiths City store in the country has held a meeting of sales staff for 15 minutes every morning, covering topics ranging from sales targets to promotions, staff were not paid for these meetings.  As a retailer many staff were on minimum wages and failure to pay workers for these meetings meant Smith’s City were not paying at least the minimum wage for all the hours worked.

Employees need to be paid for all the time that they work. This includes the time an employee spends:

– opening or closing the business
– in training
– in meetings
– at mandatory events outside work hours.

The Employment Relations Authority (ERA) had to assess whether the time spent in the daily meetings was ‘work’ for Smiths City’s sales staff. These meetings, were held at 8.45 am each day, at every Smiths City store before the stores opened each day at 9.00 am.  This morning meeting provided staff information for the day ahead and help them in their work. Smiths City’s practice was not pay those staff who attended.

The three factors the court used in determining whether activity was ‘work’ are

• the constraints on the employee
• the responsibilities on the employee
• the benefit to the employer.

Employees need to be paid for all the time that they work. This includes the time an employee spends:

• opening or closing the business
• in training
• in meetings
• at mandatory events outside work hours.

It was determined that Smiths City staff who were asked to attend the morning meetings was considered work.  Smiths City could have been up for back payments to all staff who attended these meetings, however the ERA ruled that there was no set rule for these meetings across the branches, and inadequate attendance records, therefore Smith City did not have to back pay for the previous 6 years. Smith City argued against the decision stating employees were not performing work at the meetings and they paid staff commissions which made up for the unpaid meetings.  Smith City also implied that the time for these meetings was offset by the flexible approach the company offered to allow employees time off to attend appointments or if the shop was quiet.

The Labour Inspectorate appealed this ruling in the Employment Court and were successful.

Judge Ingles overturned the original ERA decision and ordered the retailer Smiths City to pay its employees for unpaid pre-work meetings.  Judge Ingles stated the meetings were run on a standardised template provided by the company, and while the meetings had an informal tone, workers were expected to attend, and were admonished – and in some cases issued formal warnings – if they skipped them.  In addition, commissions are not a substitute for the retails obligations to pay the minimum wage and keep adequate time and wage records.

Smith’s City has agreed to pay and pay they will!  Judge Ingles estimates each full-time worker would miss out on approximately $800 per year, because of the meetings and has ordered Smith City to work out how much is owed to their workers and pay it back by 8 August this year.

Since this case has been publicised there have been hundreds of calls from retail employees who say they have experienced similar treatment.  The most common complaint being

It is important to ensure you paying your workers correctly, especially those workers on a minimum wage.

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MBIE had produced this guide to assist employers and employees to clearly understand their rights and obligations regarding wages, annual holidays and entitlements on finishing employment. You can download a copy of the guide here.

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Jan Logie from the Green Party commented “Women have been consciously underpaid and have been fighting for more pay for fare too long. Today’s announcement is long overdue.”

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This ruling sends a clear message to all employers that they need to provide safe work environments free from intimidation. 

Allan Halse, teacher’s advocate and director of CultureSafe New Zealand, said it was an unprecedented payout, at four times the usual sum awarded by the Employment Relations Court.  As this particular case involves bullying by a manager, all workplaces need to have a clear bullying and harassment policy which outlines courses of action that employees can takeif they are feeling threatened, undermined, harassed or intimidated in the workplace by a colleague or a manager.

All staff and especially senior management should be promoting and contributing to providing a safe and healthy work environment – it’s good for morale and proven to be good for workplace productivity.

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Kevin Finnegan from the Labour Inspectorate said “Just because you find employees leaving your business frustrating does not entitle you to penalise them by withholding their last pay.” he went on to say “New Zealand has a reputation as a fair and equitable country, and it’s important that this is maintained.”

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• Advise a person on what NZ visa they are best to apply for or qualify for
• Advise a person on how best to answer a question in an NZ visa application form
• Represent a person to Immigration NZ

To find out what you can do to help migrant workers, give our experts a call on 0800HRtoolkit (0800 47 86 65)

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Justice Minister Amy Adams released a summary of nearly 500 detailed submissions on calls for employment law to be altered to introduce specific domestic violence leave.

In one submission, Poto Williams (Labour’s associate justice spokeswoman) said “A woman who is escaping violence is not sick, this is  completely another issue. And it allows for an employer to recognise the situation that someone finds themselves in, and gives the employer an opportunity to support the person.”

If you have any questions about this, and other proposed changes to employment law, give our experts a call on 0800HRtoolkit (0800 47 86 65)

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