Restaurant owner to pay former staff $40,000 for violating employment rules

Guilty of asking employee of under-recording his hours, among other violations

Restaurant owner to pay former staff $40,000 for violating employment rules

A Rangiora restaurant and its owner have been ordered to pay a former manager more than $40,000 in arrears and penalties after the Employment Relations Authority (ERA) ruled that they breached various minimum employment standards.

The ERA ruled that Vijay Singh, the sole shareholder and director of Laxmi Narayan Restaurant Ltd, unlawfully deducted money from his restaurant manager’s wages for more than a two-year period.

Singh also underpaid the manager, failed to pay him holidays and leave, and under-recorded the hours his employee worked.

Under-recorded hours

As heard by the ERA, Singh had asked the former restaurant manager to under-record his hours, promising the employee that he would help him apply for residency.

As a result, there were instances when employee was only paid for 34 hours at the contractual rate despite working up to 60 hours a week.

Singh denied that such scheme existed - but the ERA ruled in favour of the employee, citing evidence gathered by the Labour Inspectorate.

“I find [that the employee] under-recorded his hours at Mr Singh’s direction following his promise of assistance with gaining residency,” the ERA said in its decision.

The authority cited in its decision the “objective nature” of the POSbiz data, which provided evidence of the days and shifts the employee worked. It also noted other evidence, such as text messages and images that indicated the employee was at work despite his timesheet incorrectly recording a day off.

“I accept the Labour Inspector’s claims of when [the employee] worked which was significantly more than recorded in timesheets,” the ERA said.

Laxmi Narayan Restaurant is now ordered to pay the former restaurant manager the following:

  • minimum wage arrears of $19,320.53
  • unlawful deductions of $3,865.79
  • holiday and leave arrears of $3,674.07
  • interest of $2,019.27

The restaurant is also ordered to pay penalties of $17,000, while Singh is ordered to pay $5,500. Half of the penalty amounts will go to the employee, while the other half will go to the Crown.

A warning to employers

Simon Humphries, Head of Compliance and Enforcement, Labour Inspectorate, said the case should serve as a warning to other businesses who are exploiting their employees.

According to Humphries, there are still employers out there who are paying their employees below the wage initially agreed upon during the visa approval process.

There are also employers who illegally deduct money from employee’s wages to circumvent the agreed pay during the visa approval process, he added.

“There is no place for dishonest and unlawful behaviour in New Zealand workplaces. Employers can expect to be heavily penalised and this can include repaying underpayments,” Humphries said in a statement.

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