Employer withholds wages payment following a justified dismissal … not permitted under Employment Agreement …

In a recent Employment Relations Authority decision, the Authority found that the employee was justified in dismissing the employee on the spot following allegations of theft but concluded that it was not permitted to withhold the employee’s wages on this basis.

The Wages Protection Act requires wages to be paid in their entirety when they become due – but where there is written agreement from the employee, the employer can make deductions in accordance with that agreement.

The Authority found nothing in the employee’s employment agreement permitting the employer to make deductions from the employee’s wages.  The employer was therefore required to pay the employee all wages that had been withheld.

Employment law in New Zealand sets out certain minimum standards which are enforceable between employers and employees.  Within these standards, however, employers and employees are free to agree to the terms and conditions of employment as they see fit.

It is important to ensure that you have a written employment agreement and that you are fully aware of its terms.  We are able to assist in the drafting of employment agreements as well as helping you review any agreement that you have been offered to sign.  If you need assistance with any aspect of an employment agreement, call me on (04) 473 6850.