Employer ordered to pay over $74,000 for failing to pay employee around $25,000…

The Employment Relations Authority has ordered an employer to pay over $74,000 after failing to pay an employee’s wages for several months.

Initially, the employee was paid on time. Then came a period that the employer did not pay the employee at all. The employer caught up the arrears, but soon fell behind again, before payment stopped altogether.

The employee requested to be paid on several occasions and was given excuses. At one stage the employer said a payment would come through the same day, but it did not. Since the employer had caught up in the past, and there were promises money was to come soon, the employee kept on working.

After several months without pay, the employee asked for clarification on the situation, but received no response.

Unsurprisingly the Authority held that being paid is an essential term in an employment agreement.

The employee was promised pay repeatedly and relied on the promises. When the employer failed to pay, and the employee was forced to look for alternative work, there was a constructive dismissal.

The employer was ordered to pay $9,000 for lost wages, $22,000 in compensation, $17,307 as arrears of wages, $6,461 in holiday pay, and $1,500 as a contribution toward the employee’s legal costs. The Authority penalised the employer a further $8,000 for failing to pay wages and provide time records.

It is important that employees are paid what they are owed on the days agreed, otherwise employers risk substantial penalties.

If your employer has failed to pay you or is behind in what they owe, it is advisable to speak with a professional experienced in the area.





Alan Knowsley
Employment Lawyer
Wellington