Piece rate blunder: Extra work pulls rate below minimum wage - by Che Van Lawrence

Kimberley Price worked at Pinevale Farms Limited, a dairy farm, from January 2020 to October 2021. She was hired as a casual relief milker by Mark Hurst, the sole director and shareholder of Pinevale, and was paid $70 per milking (piece rate), including an 8% "pay as you go" holiday component.

There was no written employment agreement, but Ms Price claims she did wider milking duties and general farm work. She left her job in disputed circumstances and claims she was subject to unreasonable treatment, underpaid, and not given an employment agreement or records of her wages and holidays. Hurst disputes these claims, stating that Price was employed by Pinevale and was paid $700 per week, including rent-free accommodation. He also acknowledges that Pinevale did not keep records of wages and holidays. The matter remained unresolved after mediation.

The Investigation

The Authority was tasked with investigating a dispute between Ms Price and Pinevale Farms Limited. The main issues to be decided included:

- whether Pinevale or Mark Hurst breached any employment duties or obligations, and

- whether Pinevale or Hurst breached any statutory obligations and if penalties should be awarded,

The Authority heard evidence from Ms Price and several witnesses, as well as from Hurst and two Pinevale employees.

The Relationship Problem

The employment relationship between Ms. Price and Mr. Hurst was problematic due to various factors, some of which were conflicting accounts and misunderstandings between the two parties. Ms. Price was made redundant from another farm and needed work, and agreed to work at the farm as relief milker with an informally agreed wage of $70 net per milking, including an 8% holiday pay loading. However, Mr. Hurst did not keep proper wage, time and holiday records, and relied on his accountant for the administration of pay. This lack of record-keeping created difficulty in resolving disputes, such as the disagreement on the length of time it took to complete a milking.

Ms. Price and Mr. Hurst also had different accounts of Ms. Price's role, with Ms. Price disputing the term "relief milker" and claiming she was offered flexible work hours and elected to work as many hours as were available, while Mr. Hurst claimed that Ms. Price set her own hours based on her availability. In addition, the provision of accommodation on the farm was not recorded in a tenancy agreement, with Mr. Hurst providing it for free and expecting half of the notional rent to be paid in exchange for additional farm labouring tasks. However, no record of rent being deducted was found in the accounting records and Ms. Price did not pay the remaining rent. The relationship between the two parties was often fraught, with Ms. Price feeling frustrated by Mr. Hurst's communication style and lack of timely scheduled time off, while Mr. Hurst felt that Ms. Price was not carrying out her duties as agreed. These issues ultimately led to the termination of the employment relationship.

How it Ended

The end of the relationship between Ms Price and Mr Hurst was a result of various factors including poor treatment by Mr Hurst, heavy workload, and a lack of appreciation for Ms Price's contributions. A 14th September 2021 telephone conversation was the catalyst for Ms Price's decision to leave. By July 2021, Mr Hurst was aware that Ms Price was seeking other work. Ms Price found alternative work in September, which was fortuitous, and due to the problematic nature of finding work mid-season. The constant use of offensive language was not a significant issue. On 24 September 2021, Ms Price drafted a resignation letter and left it for Mr Hurst, which was later removed. Mr Hurst was aware of the resignation letter but chose not to do anything about it. The resignation letter cited Mr Hurst's failure to provide an employment agreement, lack of regular days off and unilateral roster changes, failure to address Ms Price's concerns around pay, failure to provide holiday pay and appropriate remuneration, and recent treatment of Ms Price. Ms Price stated that Mr Hurst's behaviour had a negative impact on her mental well-being. Mr Hurst did not pay Ms Price for the one-week notice worked and has not paid any holiday pay to date.

The Decision

2023-NZERA-45.pdf (employment.govt.nz)

In this case, Ms. Price gave evidence of the negative impact that Mr. Hurst's actions had on her confidence and well-being during the ending of the employment relationship. Ms. Price was seen as a proud and determined person in her care for animals and the allegations made against her caused her unnecessary distress. Mr. Hurst was dismissive of her concerns during a recorded conversation. The evidence presented led the Authority to award Ms. Price $20,000 for compensation for the humiliation and loss of dignity. No award for lost wages was appropriate as Ms. Price secured alternative employment quickly. However, the Authority determined that Pinevale should pay Ms. Price an estimated amount of $25,000 for unpaid wages for additional farm work tasks and $800 for her final week's work. The claims for unpaid meal and rest breaks were declined as they were not established conclusively. The calculation of holiday pay owing was not included in the finding.

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