Failure to pay on time breaches Employment Agreement

The Employment Relations Authority has upheld a claim for unpaid wages from an employee who was not paid on time.

The employee was supposed to be paid fortnightly but due to cash flow problems the employer proposed paying monthly.  The employee did not agree to this change to their Employment Agreement. 

The cash flow problems continued and the employer failed to make the fortnightly wage payments.  The employee decided to stop work until the employer was able to make the fortnightly payments but they never got into a position where they could afford to pay the wages and so the employee never returned to work.

In addition to failing to pay the employee on time the employer also failed to keep proper records of the employee’s time and wage entitlements and failed to produce any records to the Employment Relations Authority.  This meant that the Employment Relations Authority was able to rely on the evidence of the employee to establish the underpayments of wages and holiday pay.  The ERA found that the employee had been short paid his normal wages, short paid his holiday pay and had not been paid correctly for working on public holidays.  The employee had only been paid their usual rate and not time and a half.

The employer was also ordered to pay the various fees and interest the employee had to pay as a result of not being paid his wages on time.

In this case the employee was self-represented and no claim was made to the Authority for compensation for the unjustified dismissal or for lost wages following the unjustified dismissal.  If those claims had been brought by the employee then the damages awarded against the employer may have been considerably higher.

Alan Knowsley
Employment Lawyer
Wellington