'Ghosted': Employer stops replying to texts, calls after failing to pay wages

'His system got hacked, and he was unable to access accounts,' claims director

'Ghosted': Employer stops replying to texts, calls after failing to pay wages

The Employment Relations Authority (ERA) recently dealt with a case involving a worker who was employed as a night security guard by her employer, a security services company.

The worker performed her duties at a park in Auckland from March to May 2023. However, despite working for three months, the worker was not paid any wages by her employer.

In this case, the employer allegedly failed to pay the worker for any of the hours she had worked during her employment.

The worker said that the employer's sole director repeatedly made excuses for not paying the worker, claiming that “his system got hacked, and he was unable to access his accounts.” Even after the worker's employment ended, the director stopped responding to her calls and texts.

Worker seeks help from authorities

Desperate for a resolution, the worker sought assistance from the Labour Standards Early Resolution Helpline.

As a result of their intervention, the director asked for the worker's IRD number and bank details, promising to pay her the owed wages. However, despite the worker providing the requested information, the employer still failed to pay her.

The director also failed to take any steps to ensure the worker was paid for her work and stopped responding to calls or emails from the Labour Standards Officer.

The worker then sought mediation, but the director did not respond to any communication from Mediation Services, leading to the closure of the file.

Left with no other option, the worker lodged a Statement of Problem (SoP) with the ERA on October 11, 2023, seeking payment of her wage arrears.

ERA’s investigation into wages owed

The Authority directed the parties to attend mediation, but the employer breached that direction. The director failed to explain the employer's non-attendance at mediation.

The SoP was served on the employer at its registered address for service, which was the same address as the director's.

Despite the ERA’s attempts to contact the director via email and phone, no response was received. The employer did not lodge a Statement in Reply (SiR) or apply to lodge one out of time.

The Employment Relations Authority then held a Case Management Conference (CMC) on January 19, 2024, which the director did not attend.

The ERA officer attempted to contact the director twice during the CMC, leaving voicemails. The employer was directed to provide the worker's wage and time records, holiday and leave records, and other employment documentation by January 31, 2024, but failed to do so.

‘Ghosted’: Employer's continued absence

Despite the ERA issuing a direction for mediation to occur within 30 days of January 19, 2024, it did not take place. Two mediation dates were agreed upon, but the director did not join the mediation sessions or answer phone calls or texts from the mediator or the worker's representative.

The ERA’s Directions and Orders (DoA) dated January 19, 2024, stated that while it was preferable for the Authority to hear from both parties before issuing a substantive determination, the employer's failure to engage in the investigation process would not stop the investigation from proceeding in its absence.

The ERA held an in-person investigation meeting on April 5, 2024, which the worker attended and was questioned about her evidence. The employer failed to attend the meeting and had breached all of the directions issued by the Authority.

The issues to be determined included whether the employer provided the worker with a written employment agreement, if the worker was owed wage arrears, and whether interest should be awarded on any wage arrears owed.

The Authority also considered if there had been a breach of employment standards and if the director was a person involved in any such breaches.

Worker’s ‘uncontested evidence’

The ERA accepted the worker's uncontested evidence that the employer failed to provide her with a written employment agreement, breaching s 64 of the Employment Relations Act 2000.

The worker's evidence about her employment terms and the days and hours she worked from March to May 2023 was also uncontested.

The worker provided evidence establishing that she had worked a total of 347 hours over 44 days during her employment, including working on two public holidays.

The ERA found that the worker's wage arrears claim succeeded, and she was owed a total of $8,888.08 gross, consisting of:

"(a) $2,713.60 for the 128 hours she worked in March. This is paid at the minimum wage rate of $21.20 which applied in March 2023;

(b) $4,971.30 for the 219 ordinary time hours she worked at $22.70 per hour which was the applicable minimum wage rate that applied from 1 April 2023."

The ERA also determined that the worker was entitled to be paid time and a half for the hours she worked on public holidays and should have received alternative day holidays for each public holiday worked.

Worker’s compensation for unpaid wages

The employer's failure to pay the worker caused her considerable stress and financial embarrassment. As a result, the ERA ordered the employer to pay interest on the wage arrears from May 30, 2023, until the amount had been repaid in full, with the correct deductions remitted to the Inland Revenue Department.

"The respondent is ordered to pay [the worker] interest on the $8,888.08 wage arrears she is owed. Interest is to run from 30 May 2023 (being her last day of work) until that amount has been repaid to her in full and the correct PAYE and other required deductions have been deducted and remitted in her name to the Inland revenue Department (the IRD)."

The Employment Relations Authority found that the employer had engaged in multiple breaches of minimum employment standards, including failure to provide a written employment agreement, keep wage and time records, pay minimum wage, and comply with annual holiday pay and public holiday entitlements.

"[The director], as the person who was responsible for employing [the worker], for allocating her work and for addressing all of the employment-related issues that arose while she was employed by the respondent, is a person involved in the breaches of employment standards that occurred, as defined by s 142W(1) of the Act."

Consequently, the director was found to be directly involved in the multiple breaches of employment standards, as he had complete control over the employer's actions and was responsible for ensuring compliance with minimum code legislation requirements.

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