28 August 2015

Employment law breaches cost Canterbury rebuild business

The Employment Relations Authority (ERA) has ordered Pro-Build Canterbury Limited to pay more than $58,000 in penalties and arrears to workers for breaching employment laws.

The Ministry of Business, Innovation and Employment’s Labour Inspectorate brought the case before the ERA on behalf of three employees following an audit to check for compliance with employment laws.

“The investigation found that the employer did not keep written employment agreements or time and wage records which are required by the law,” says Labour Inspectorate Southern Regional Manager Stuart Lumsden.

“Pro-Build was also treating workers as contractors when, in fact, they were employees. They failed to provide the workers with holiday pay and public holiday entitlements such as time and a half pay and days in lieu. Two of the workers were migrants and one is a New Zealand citizen. They were not aware they were treated as contractors and not employees.

“The employer failed to address the issues after several requests by the Labour Inspector and being served a written Improvement Notice. The employer disputed the Inspector’s assessment that there workers were employees. That’s when the issue was taken to the ERA.”

The ERA ordered Pro-Build to repay more than $43,000 in holiday pay arrears. They also issued a $15,000 fine for the seriousness of breaches that deprived workers of money that was rightfully theirs. The ERA determination states that one worker could not afford to take leave over Christmas to visit his home country because he did not receive holiday pay.

“This ruling should serve as a warning to other employers not to treat employees as contractors to avoid providing Holidays Act entitlements. This specifically concerns construction companies involved in the rebuild and those hiring migrant workers. Employers are not entitled to treat migrants on temporary work visas as independent contractors,” says Mr Lumsden.

“The Labour Inspectorate takes these breaches very seriously and will not hesitate to take enforcement action, which can include penalties of up to $10,000 for individuals and $20,000 for companies.”

The ERA determination is available here.

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