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Employer Ordered to Pay ex Employee $90,000 in Compensation

Published 01 Jul 2014

On 1 December Mr Hill commenced employment as a Camping Ground Manager. It was agreed that he receives $30,000 per annum. He was also entitled to free accommodation onsite. The accommodation arrangement was not expressed as part of his remuneration. The parties also agreed that when his Employer decides to end the lease in the future, Mr Hill would receive a share in the profit made during his tenure as grounds manager. Further, the parties did not have a written employment agreement.   

In January 2013 Mr Hill was given notice of dismissal for serious misconduct. Mr Hill challenged the dismissal and made claims for compensation for humiliation, loss of dignity and injury to his feelings and lost wages. Further he claimed lost wages from the date of his dismissal beyond the three months allowed under the Employment Relations Act 2000. Mr Hill also made claims for income earned while he was employed as a camping ground manager, but unpaid.

Mr Shand did not keep wages and time records. In determining that Mr Hill was owed wages the ERA held in favour of the Employee and noted that no evidence to the contrary was provided by the Employer. It was argued for Mr Hill that not only he was not paid the $30,000 agreed, but also he worked long hours so that even if he was paid the $30,000 per annum his wage would have been under minimum wage rates.

Mr Hill claimed unpaid wages on the basis that the agreed salary level meant that he was being paid less than the minimum wage. Mr Hill also claimed compensation in respect of the dismissal. Mr Shand disagreed with the unjustified dismissal claims.

The Employment Relations Authority (“ERA”) found that Mr Hill was not always paid for his work and at times Mr Shand paid him through another business. This is because, for periods of time, there was insufficient income to cover his wage from this camping ground business.   
The ERA concluded that's 132 of the Act provides an Employee may give evidence that the Employer’s failure to keep adequate wages and time records prejudiced the Employee’s ability to bring an accurate claim under s.131. The Employer may give evidence to the contrary to prove the Employee’s claims are incorrect. However, s.132 empowers the ERA to accept as proved all claims made by the Employee of wages actually paid and of the hours, days and time worked by the Employee”.

The ERA determined that Mr Hill worked long days in peak season and for fewer hours for the rest of the season. It was accepted that Mr Hill had constraints on his evenings and nights during the peak season almost every night and had to remain alert during the night.

In determining whether Mr Hill was working during rest and sleep time the ERA followed the Court of Appeal’s approach and considered three factors:

• What constraints are placed on an Employee’s freedom he would otherwise have to do what he pleases?
• The nature and extent of an Employee’s responsibilities.
• What benefit there is to an Employer by the Employee performing the role?

The ERA ultimately concluded that he was engaged in work during the peak season for about 15-16 hours a day 7 days a week, but cannot be said to have been engaged in work every night from 11pm until 7 am. Mr Hill was entitled to be paid at “not less than the prescribed minimum wage rate for 15 hours per day” over peak periods for 2011, 2012, and 2013. In addition, Mr Hill was awarded amounts owing to him in wage arrears and holiday pay. He was awarded a total of $69,561.25 under that claim.

Further, it was held that Mr Hill was unjustifiably dismissed. It was held that Mr Shand did not comply with the procedural requirements. The ERA concluded that “there was not one shred of evidence of any substantive justification for dismissing Mr Hill for dishonesty”. Mr Hill was awarded $15,120 in lost wages for the three months after his dismissal plus $7,000 in compensation for humiliation, loss of dignity, and injury to the feelings of the Employee.