A New Zealand Employer was penalised $20,000 for not having any Employment agreements for his staff. The Employment Relations Authority fined this Employer as he failed to provide written employment agreements for 15 Employees.

The Employer had to pay all of the 15 Employees outstanding wages and back pay. In addition, the Employer paid $12,000 for various other offences found during the process. Some included not paying minimum wage, not paying Employees public holidays, not paying the correct holiday pay, not having the correct records and further $8,000 for making unlawful deductions from wages.

Of the total $40,000 penalty to the Employer, $17,750 of that total was to be paid to the Employees as additional compensation.

This points out just how crucial it is to provide your Employee’s with written and signed Individual Employment Agreements prior to the commencement of their work.

An Employee succeeded in his personal grievance claim for wrongful dismissal against his Employer and was awarded lost wages and compensation after the Employer got a medical incapacity dismissal procedure wrong. During this process the Employer was given a medical report for the Employee that stated that the Employee’s eyesight was not sufficient enough to continue to allow him as a driver. However a second medical opinion was not obtained when it was necessary, instead, the Employee was dismissed on the spot after 38 years of service.

The Employment Relations Authority ordered the Employee to get a full doctors certificate, but this one found that his eyesight was not an issue, so concluded that it would not affect his ability to drive. Instead, it found him unfit for work on other grounds and conditions. The Employment Relations Authority refused to reinstate the Employee as he was still found to be medically unfit to drive and do his work duties.

However, the Employee was awarded $15,000 worth of compensation as well as one years’ worth of wages for the failure to follow a proper process in the dismissal of the Employee due to medical grounds even though the decision to dismiss was found to be agreeably justified.

The Employment Relations Authority has also fined two sperate Employers $7,500 each for failing to keep adequate Employment records and also to ensure that their Employees were paid the correct holiday pay. The Labour Inspectorate had sent Improvement Notices to the companies, but both companies failed to make the correct payments or improve their records by the set date.

These above could have been avoided.  Had the correct wording and processes been followed, it would have resulted in fair dismissals and no penalties. It pays to ask for advice before relying solely on any provisions to dismiss an Employee, especially if you are unsure.

If you feel like you are in a similar position as an Employer, please feel welcome to contact Lynda Mathieson at Mathieson Chartered Accountants. Lynda is more than equipped to help navigate you through the sometimes-challenging changes in our New Zealand Employment Law.

Ph (03) 307 6455  Cell 027 5544747
Email lynda.mathieson@myca.co.nz