The Employment Relations Authority has held a company and sole director of the company liable for its breaches in minimum employment standards.

The Labour Inspector discovered a number of minimum employment standard breaches after an employee claimed he had not been paid his annual holiday pay. These breaches included the failure to keep and provide wage and time records, as well as holiday and leave records, failure to pay annual holidays and keeping illegal employment agreements.

The Labour Inspector sought to penalise both the company and its sole director as a person involved in the breaches. The Authority had to determine the penalty to impose on the company and sole director.

The Inspector’s investigation confirmed the number of breaches by the company. The breaches included an illegal employment agreement, which had not included how or why the employment relationship would come to an end. This is required by law to be in writing and contained in the employment agreement.

Additional breaches included incomplete wage and time records which failed to provide sufficient detail relating to minimum employment standards. Payslips also failed to include what type of work employees were doing, the type of employment agreement the employees had and the number of hours worked by each employee.

The Labour Inspector also found that many payslips were missing. It was further found that in some areas of the company, not enough information was provided for the Labour Inspectorate to ensure that minimum employment standards were being complied with.

The Authority concluded that these breaches were serious, and as such both company and sole director should be penalised. Persons involved in breaches of minimum employment standards can be personally penalised under the law.

The Authority ordered the company to pay $64,000, and the sole director to pay $32,000 for their breaches.

It is important to be aware of your obligations as an employer, as well as a person involved in managing and controlling a company. If you are confused about these obligations, it pays to seek advice from a professional with experience in the area.


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Alan Knowsley and Hunter Flanagan-Connors