The Employment Relations Authority has ordered an employer to pay a penalty of $12,000 after the employer failed to pay an employee’s wages for 3 months. The employer also failed to keep an accurate record of the employee’s holiday pay and leave entitlements.

A new employer took over the company in early 2020 and soon after, the employee noticed that he had not been paid for work that he had completed. He raised a personal grievance claim with the employer and asked for wage and time records to be provided. This letter was ignored by the employer.

At no point had the employer provided the employee with any holiday pay, or wage records. As a result the ERA found that the employer had failed to keep accurate records of the employee’s holiday and leave entitlements, and that this failure prevented the employee from bringing an accurate claim to recover the unpaid wages and holiday pay.

The ERA decided that the statement provided by the employee regarding the amount of wages and holiday pay that was owed was accurate, and the sum that the employer had to pay was therefore based on this statement.

The ERA held that the employee had provided sufficient proof of the missed payments, and the holiday pay he was owed and ordered the employer to pay $12,500 for unpaid wages and holiday pay, as well as a penalty of $12,000. $10,000 of the penalty is to be paid to the employee, and $2,000 to be paid to the Crown.

If the new employer had accurately recorded the holiday and leave entitlements and paid the correct wages to its employees, it could have avoided the order for payment, and saved the time that they spent at the proceedings and the $12,000 additional penalty.

If there is confusion surrounding employee entitlements, and employer obligations, it is wise to seek advice from a professional with experience in the area.

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