News Article

latest news in employment law

Not Paying Staff breaks could cost firm $1m

Published 08 Nov 2016

An Oamaru meat processing business is facing a serious financial burden following exhausting their legal options to appeal against a court decision forcing them to compensate past and present employees for underpaying wages.

Lean Meats did not change policies in 2009 following the Employment Relations Amendment Act entitled full time staff to two paid 10 minute breaks per day.

The Meat Workers Union after unsuccessful negotiations with the firm raised the issue with the Employment Relations Authority (ERA).

The ERA found in favour of the Union and ordered the company to make reparations as far back as 2009 to past and present staff.

Lean Meats fought the decision by appealing to the Employment Court who upheld the decision and now have subsequently failed again at the Court of Appeal who also agree with the two previous findings.

The Court of Appeal went on to state rest breaks should be paid at the same rate for which an employee would be paid to work and ordered Lean Meats to pay the union for court costs as well.

The Meat Union's President went on to say this affects up to 350 past and present workers and could cost the firm up to $1,000,000

This case was decided under a previous law which specifically entitled employees to two 10 min paid rest breaks and an 30 minute unpaid meal break where they worked between 6 to 8 hours.  This law was reformed in March 2015 and there are now no specific rules for how long, or when, rest/meal breaks should be taken. The legal entitlement is that Employees must be given a reasonable opportunity to negotiate times when breaks should be taken and on duration.   It can also be agreed that the Employer will not provide the Employee with rest/meal breaks and instead the Employee will be provided with compensatory measures (wage equivalent).

Employers must still take care to ensure that employees are provided with the opportunity to take breaks and that these of a reasonable frequency and duration.  Where employers fail to do so, employees may claim historic unpaid wages.