In a recent case a Labour Inspector investigated an employer who was breaching its employee’s minimum standards of employment. The employer had failed to provide the employees with written employment agreements, failed to keep holiday and leave records and failed to keep time and wage records. The employer was ordered by the Employment Relations Authority to pay a $25,000.00 penalty.

If you believe that your minimum employment entitlements are being breached, you should discuss your concerns with your employer in the first instance so that they can have the opportunity to rectify any breach. If your employer fails to respond to, or address, your concerns you can engage a legal representative to assist you or you can contact a Labour Inspector by calling the Ministry of Business, Innovation and Employment on 0800 20 90 20.

A lawyer can seek copies of your employment records from the employer, including wage and leave records, so you and they can check if you have been correctly paid or not or given your correct leave etc. A failure to provide the records can be penalised by the Employment Relations Authority and a lawyer can assist you with making a claim to the ERA.

Labour Inspectors also have powers to get the records. A Labour Inspector can enter a workplace at any reasonable hour and:

  • interview any employee or employer;
  • ask to see and take copies of:
  • wages and time records;
  • holiday and leave records;
  • employment agreements;
  • strike and lockouts information; and
  • any other relevant document which the Labour Inspector believes may assist their investigations; and
  • question an employer about their compliance with employment related laws.

If an employer fails to comply with any requirement of a Labour Inspector, or if they obstruct, delay, hinder, or deceive any Labour Inspector, the Labour Inspector may bring an action in the Employment Relations Authority against them for a penalty.

If an employer is found to have breached an employee’s minimum standards of employment, the Labour Inspector may:

1.         Agree to an enforceable undertaking

A Labour Inspector can enter into a written agreement with an employer, whereby an employer undertakes to rectify a breach, or pay money owed to an employee, or take any other action that the Labour Inspector considers appropriate, by a specified date.

If an employer breaches an undertaking, the Labour Inspector can bring an action against the employer in the Employment Relations Authority. The Employment Relations Authority may make a compliance order to enforce the undertaking and/ or may impose a penalty on the employer.

2.         Issue an improvement notice

A Labour Inspector may also issue and serve on the employer an improvement notice. An improvement notice requires the employer to remedy any breaches as set out in the notice by a specified date.

An employer may lodge an objection to an improvement notice in the Employment Relations Authority within 28 days.

If an employer fails to comply with an improvement notice the Labour Inspector make take action against them in the Employment Relations Authority, and a penalty may be imposed. The Employment Relations Authority can also enforce an improvement notice by making a compliance order.

An enforceable undertaking or improvement notice may be appropriate where the breaches of minimum employment standards are less serious, or are one-off mistakes.

3.         Issue a demand notice

A Labour Inspector may also issue and serve on an employer a demand notice, when a Labour Inspector reasonably believes that an employee has not received wages or holiday pay or other money payable to them, within the last 6 years, under employment legislation.

The demand notice can be enforced through a compliance order issued by the Employment Relations Authority.

An employer may lodge an objection with the Employment Relations Authority to a demand notice within 28 days. If the Employment Relations Authority finds that an employee is due money, their decision can be enforced in the District Court as a judgment debt.

If no objection is lodged, the demand notice can also be enforced as a judgment debt.

4.         Issue an infringement notice

A Labour Inspector may issue and serve on an employer an infringement notice where an employer has breached their record-keeping obligations (including their obligation to keep a signed copy of their employee’s employment agreement).  The notice must set out the amount of the infringement fee which can be up to $1,000 for each offence to a maximum of $20,000 in any 3 month period.

5.         Take action against the employer in the Employment Relations Authority

A Labour Inspector can also take action against an employer in the Employment Relations Authority for breaching the minimum standards of employment.

A Labour Inspector can request that the Employment Relations Authority penalises an employer or can seek the recovery of wages or other money owed to an employee as a result of any breach of an employee’s minimum standards of employment.

 Mikayla Turner
Employment Lawyer
Wellington