Lengthy Legal Battle Over ERA Determination Ends In Failure For South Island Business

A South Island hospitality business’s three-and-half year legal battle over their refusal to provide the Labour Inspectorate with employment records has ended after their bid to appeal an Employment Relations Authority determination failed.

In September 2022 Darren Angus, who with his wife Lyndal owns Caisteal An Ime Ltd (CAIL), trading as Akaroa Village Inn, was ordered by the ERA to pay $7,500 in penalties for refusing to provide a Labour Inspector with wages and time records; holiday and leave records; and employment agreements.

Authority member Philip Cheyne also ordered that the business comply with the Labour Inspector’s initial request that the employment records they required be provided.

Mr Cheyne found CAIL failed, “without reasonable cause to comply with the Labour Inspector’s requirement.”

He said the Labour Inspector’s request was reasonable, did not violate the company's rights, and was neither an abuse of power nor harassment.

Unhappy with that decision CAIL turned to the Employment Court asking:

• to have the ERA determination set aside
• for a stay of the ERA’s orders
• that a penalty be imposed on the Labour Inspector
• for compensation for “hurt and humiliation” allegedly caused by the inspector’s actions.

However, Employment Court Judge K G Smith found there was no basis for CAIL to refuse to comply with the Inspector’s records request and that the penalty ordered by the ERA was “appropriate” and dismissed the company’s application.

Still not satisfied, CAIL applied to the Court of Appeal for leave to appeal Judge Smith’s decision.

This application has now been declined.

The lengthy legal battle began in 2020 when the Labour Inspectorate received complaints related to public holidays payments at CAIL and started an investigation.

In October 2020, following the investigation, CAIL was found to have breached minimum employment standards, and the business agreed to rectify the breaches and provide evidence it had done so by 1 March 2021.

However, the Labour Inspector working on the case was not satisfied the evidence supplied was accurate or complete and suggested CAIL either conduct another audit or supply its employment records to her for analysis.

Darren Angus, on behalf of CAIL, was not prepared to do this saying the business was satisfied it had rectified the breaches as agreed with the Inspector.

This led to the inspector making a formal request for copies of wages and time records, holiday and leave records and employment agreements for all employees from its first day of business to 28 March 2021.

When Angus and CAIL refused to provide the records, the Inspector took the case to the ERA.

Labour Inspectorate Head, Simon Humphries said had the business and its owners simply supplied the Labour Inspector with the requested documents when initially asked this drawn-out legal process would never have been necessary.

“By law, businesses and their owners are required to supply employment records when requested to do so by a Labour Inspector.

“Labour Inspectors are tasked with making sure workplaces provide for minimum employment standards and laws. In this case the Labour Inspector tried her best to help the business rectify the breaches in compliance standards.”

He said where breaches are minimal and unintentional, the Inspectorate prefers to work with employers and employees to educate them on their rights and responsibilities or help resolve a complaint.

Second challenge to ERA determination

This is the second time CAIL and its owners have challenged an ERA determination in the Employment Court and failed.

In June 2023 Employment Court Judge K G Smith ruled that an ERA determination in October 2021 that CAIL had to pay a former manager in the businesses’ ice cream store $8,104 for unpaid wages and compensation was justified. This amount was later altered to $7,473 after a different calculation was used to assess the compensatory sum for lost wages.

The employee left Akaroa Village Inn in April 2020 following an exchange with Angus on an Akaroa community Facebook page over a pay issue following the COVID-19 Level 4 lockdown.

Angus said the former manager resigned after this exchange while she claimed she was fired.

She later filed a personal grievance in the ERA claiming unjustified disadvantage and unjustified dismissal claiming for lost wages and compensation for hurt and humiliation and costs.

NOTE: MBIE encourages anyone who thinks they or someone else has been treated unfairly in the workplace to contact our 0800 20 90 20 contact centre number where their concerns will be handled in a safe environment.

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