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Wages underwater, Labour Inspectorate steps in

Updated: Nov 3



A former employee of Hutt Food Ltd and Well Sushi Ltd has been awarded nearly $54,000 in back wages and holiday pay.  The claim had been brought by the Labour Inspectorate, part of the Ministry of Business, Innovation and Employment (MBIE) in the Employment Relations Authority (ERA) which is also part of MBIE.


Rather than fight it, Hutt Food agreed to request that the ERA issue a consent determination.


MBIE’s website describes the role of the Labour Inspectorate:


The Labour Inspectorate seeks to ensure employment standards are complied with, so that:

  • all employees have their minimum employment rights respected, and

  • all employers operate in fair marketplaces, free from non-compliant businesses that may have an unfair advantage.


It does this by identifying and investigating breaches, taking enforcement action where necessary, and providing ‘early resolution’ assistance for some complaints. Inspectors also run proactive targeted operations in priority areas.


The Labour Inspectorate also works with industry and sector leadership and other key parties to strengthen the systems that underpin employment standards compliance.


In the Hutt Food matter the breaches of the Minimum Wage Act and Holidays Act arose because the employee, Gaoqing Tian, had an employment agreement that required him to work 45.5 hours per week, for which he was paid.  But he generally worked 51-52 hours per week, and because his contracted hourly rate was only marginally above the minimum wage at the time, his real rate was pulled below minimum wage.


The approximately $18,000 award arising from the employer’s breaches was to put Mr Tian in the position he would have been if he’d been paid minimum wage for each hour worked, over the several years that he was an employee.


The award for annual holiday pay was nearly double that amount and the determination records ten separate breaches of the Holidays Act; too many to list here.


The lesson to employers in low skilled and low margin industries is that it wouldn’t take a lot of hours of regular unpaid overtime to get them into trouble with the Labour Inspectorate and care should be taken to avoid this.


Not only that, but a minimum wage (or thereabouts) worker is likely to be unable to afford a lawyer or advocate to represent them in these circumstances, and may partake of the free service offered by MBIE, despite the backlog.  And that’s going to hang over the employer’s head too.



Tristam Price, Editor





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