Viewbank Dairy breaches holiday pay requirements

legal-dreamstime-201_430New Zealand’s Employment Relations Authority (ERA) has ordered Viewbank Dairy to pay a $7,500 penalty and to rectify employment law breaches discovered by the Ministry of Business Innovation and Employment’s Labour Inspectorate.

The Labour Inspectorate visited Viewbank Dairy as part of an audit to check for compliance with minimum employment standards on dairy farms.

A number of breaches were identified and an improvement notice was issued. The Inspector brought the case before the ERA when the employer failed to comply with parts of the notice it was given.

The breaches included treating some workers as casual employees when in fact they were permanent, which in turn led to holiday pay and minimum wage non-compliance.

A number of employees had also either not been issued with individual employment agreements, or the organisation had failed to retain copies of those agreements.

Viewbank Dairy was also found to have failed to keep accurate employment records and made deductions for accommodation from workers’ pay without written evidence that the deductions were specified and agreed to by the employees.

The ERA determined that three breaches of legislation justified the imposition of penalties, two of which relate to the failure to keep proper records and one to the failure to issue and retain copies of employment agreements.

In addition to the $7,500 penalty, Viewbank Dairy must repay money owed to workers.

Stuart Lumsden, southern regional manager at the Ministry of Business, Innovation and Employment’s Labour Inspectorate, said: “As a result [of treating permanent employees as casual staff], employees were provided with incorrect holiday entitlements. They were getting paid 8% on top of their usual pay, when in fact they were entitled to four weeks’ holiday pay, pro-rated, under the Holidays Act 2003.

“This is not an uncommon mistake and employers need to remember that the 8% arrangement is only lawful for employees who are on a fixed-term contract or who work irregularly or intermittently, for instance on-call workers. In all other cases the four weeks’ pro-rated rule applies.

“Without accurate documentation the employer has no way of demonstrating that correct entitlements are provided to employees.”