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latest news in employment law

Withholding staff wages

Published 09 Mar 2020

The Employment Relations Authority shows sense in a recent decision when a sacked employee of a roofing firm who 'stole' petrol brought a claim against his boss.

The staff member who got caught with a meth pipe in his company car the previous month, then later went on to spend substantial amounts of money on the company fuel card, including spend ups at 2am in the morning.

When questioned by the boss, a web of lies quite quickly came apart, as did the employment relationship, and the employee was given his marching orders. Unfortunately the boss decided he wasn't going to pay any outstanding wages or holiday pay owed.

Soon enough, in comes the personal grievance for unjustified dismissal and non-payment of wages which takes them to the Employment Relations Authority (ERA).

Luckily enough, the ERA member decided on balance that the employee was stealing fuel and as such was not entitled to any compensation despite the bosses clear lack of process. However, there is no excuse for non-payment of wages or holiday pay and an award was made to pay the balance, which totaled $8,030.76.

Deducting or withholding payment from wages is a minefield for employers and very difficult to enforce, even with a clause in the Employment Agreement.

Our recommended approach is to list the specific examples in which you would seek to deduct in the Employment Agreement as a schedule and get it specifically signed off at the commencement of employment. You then still need to 'consult' with the employee at the point when you wish to invoke this. This can be as simple as a conversation of your intention to deduct for whatever reason, however if the employee refuses or withdraws consent you can not legally exercise it.