Slack employment practices highlighted

Two recent case examples have been in the news relating to employment practices by building firms. The first relates to a Christchurch firm that failed to pay its employees the minimum wage or keep adequate records of work hours. The second concerns an unjustified dismissal, despite the employee never actually being ‘fired’.

Employees not contractors

Verney Construction Limited was investigated by MBIE last year after a complaint from an employee. The investigation revealed that two personnel were being treated as contractors, when they were actually employees. They had not been provided with an employment agreement and the evidence suggested that they were not paying the employees’ minimum wage or their holiday entitlements.

The Employment Relations Authority (ERA) held that the workers should be paid the minimum wage and holiday pay arrears with interest. The company was also fined $2,000 for breaching notices of compliance that had previously been issued.

Click here to read the Herald summary.

Effectively fired

The employee was a handyman and building, maintenance, and construction manager in Taupo, for a company that operates a car dealership and undertakes building and maintenance repairs. He was due to start a significant building job in Auckland but was waiting on the consent to come through. Through email, the company informed the employee that the job was cancelled and that contractors were going to be used instead. In subsequent emails the company became more disparaging towards the employee and eventually ceased communication and did not provide him with any more jobs.

Although the employee never received a formal job termination and had handed in his keys and company car, the ERA held that the employee was effectively fired. There appeared to be no substantive reason for the termination and the employee was not given an opportunity to respond to any allegations.

As a result the employee was awarded $23,076 in lost wages and $5,000 compensation for hurt and humiliation. The later award was reduced by 25% because the employee could have been more proactive in discussing concerns around the build at an earlier stage.

Click here to read the 3news article.

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