A recent determination of the Employment Relations Authority highlights the need for employers to comply with statutory minimum record keeping requirements.
NZ Mountain Hunting Limited (NZMH) is a big game hunting safari business near Omarama. It has been in business since 1995 and employed hundreds of employees over its annual hunting seasons which start in February and finish in August each year.
A Labour Inspectorate investigated the business after a former employee alleged the company’s sole director Gary Herbert required staff to work an average of 12 hours a day, but only paid a flat rate of $150 per day. That’s $12.50 an hour gross, less than the minimum adult wage rate.
No records, no Agreements
It turns out NZMH employed 18 staff on fixed term agreements during the hunting season as hunting guides, as well one permanent full time employee based at Herbert’s Waimate farm. The Company accepted it had breached minimum employment standards by failing to keep full and accurate wage and time records and it did not keep full and accurate holiday and leave records .In fact no formal records or time sheets were maintained or kept. Only eight individual employment agreements were provided for the 2018 season which did not state usual hours of work but simply stated that “[t]he employee’s usual hours of work will be as and when required.”
The business had been in operation for 25 years. The Authority noted therefore that breaches could have also extended beyond the hunting season of 2018.
No ‘Swings & Roundabouts’
The employer argued its ‘flat rate’ of remuneration accounted for the ‘swings and roundabouts’ in the variation in employment duties and the duration and frequency of hours. It argued that the rate was designed to factor in other payments and or benefits including accommodation, WIFI access, power and meals. It also claimed that public holidays had been accounted for despite there being no holiday or leave records to substantiate.
The maximum penalty for failure to keep wage and time records, and holiday and leave records is $20,000 per breach (for the company) and for Herbert (the majority shareholder/sole director) $10,000 per breach, i.e. maximum provisional penalties of $720,000 and $350,000 respectively. The company was fined $55,000 and Herbert ordered personally to pay a further $27,500.
Ignorance of the Law is No Excuse
The message of this case is very clear: Ignorance of the law is no excuse. It is an employer’s responsibility to know and follow the relevant laws. This means keeping accurate and complete records and having compliant payroll systems that meet the statutory minimum employment requirements under the ERA and HA.
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