The Employment Relations Authority has ordered an employer to repay employees and Inland Revenue over $46,000 including unpaid wages, holiday pay and KiwiSaver. The employer had made almost $10,000 in deductions for KiwiSaver and student loan repayments from employees but failed to forward the deductions to the IRD.

The employer was placed into liquidation and all employees were terminated without notice. The ERA ordered that the employer is to pay $34,000 to the dismissed employees in lieu of notice and for unpaid wages and unpaid holiday pay.

As the employer has been placed into liquidation, the Directors may be personally liable for the sums ordered by the ERA.

If an employer is insolvent, the correct redundancy process must still be followed, which includes providing the employees with sufficient notice.

Alan Knowsley
Employment Lawyer