The issue shows an ‘inherent imbalance of power in an employment relationship'
A South Auckland petrol station, Mittal and Son Limited (MSL), trading as Mobil Porchester Road, has been ordered to pay $20,000 for breaches, likened to the workers having to pay a premium to keep their jobs.
MSL’s individual employment agreements contained a policy that staff on duty would have to cover the cost of fuel taken by customers who drive off without paying. The policy was applied in the case of at least two workers, one of them was under 20-years-old.
The issue of pay-docking for fuel pump drive-offs has been raised in the past across the industry, according to Labour Inspectorate Regional Manager Callum McMillan.
“It’s extremely disappointing to see that Mobil has failed to stop these sorts of issues from occurring in businesses that trade under its brand,” said McMillan.
“The fact that an employee has signed an employment agreement that forced them to pay for theft by customers, does not make the clause or its enforcement legal.”
The ERA found this is “basically the same as charging an employment premium”, which demonstrates the “inherent imbalance of power in an employment relationship”.
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MSL director, Sohan Mittal, said he was not aware the company was breaching the employment law, even after he sought legal advice on MSL’s employment agreements.
According to the Ministry of Business Innovation and Employment, the ERA heard MSL had taken steps to rectify their practises, including changing their payroll provider to ensure compliance with records keeping and holiday pay obligations.
The drive-off policy had since been removed from the individual employment agreements.
All fuel pumps had been changed to pre-pay to prevent drive-offs, and affected employees had been repaid.
Nonetheless, the ERA determined Mittal personally liable for an additional $3,000 in penalties.
“Mobil should take leadership to ensure that businesses licensed to carry their brand are complying with minimum employment standards and treating their frontline staff fairly,” said McMillan.
“Failure to do so brings into question Mobil’s claim of being a ‘responsible corporate citizen’ and tarnishes the reputation of all Mobil outlets.”
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According to Mobil Oil New Zealand Limited, all operators of Mobil service stations are expected to uphold all New Zealand laws.
This requirement was outlined in Mobil's agreements with service station operators licensed to use the Mobil brand.
''Should Mobil become aware of any circumstances where our agreement with an operator may be breached, we will take action to address as appropriate, which could include coaching and education, to withdrawing the right to use the Mobil brand,'' Mobil was quoted as saying by The NZ Herald.
''Following this event, we are reaching out to all dealers using the Mobil brand to reinforce our expectation, and requirement, that they uphold all New Zealand laws in their operation of Mobil-branded service stations.''
