Worker on accredited employer visa claims unjustified dismissal after redundancy during probation

An Indian national on an accredited employer work visa arrived in New Zealand to work as a construction trade worker for a gib fixing company, but his employment lasted only months before he received a warning letter for incompetence and performance.

The employer issued four weeks' notice of dismissal on redundancy grounds after holding a performance review meeting, claiming uncertain future work prospects and financial difficulties required the disestablishment of the worker's position.

The worker raised personal grievances over treatment during employment and how it ended, along with claims for payment of wage arrears and holiday pay for hours of unpaid work.

The dispute centered on whether the worker was paid for all hours worked, whether the employer acted justifiably in issuing warnings and dismissing him, and whether the director could be held personally liable for unpaid arrears.

Employment background and recruitment from India

The employer is a company trading under the name Alliance Construction that provides plasterboard installation services at commercial and residential building projects across Auckland.

The employer's director and sole shareholder took steps in 2023 to recruit new workers under the provisions of the accredited employer work visa programme. While visiting family in India, the director's father introduced him to an uncle of the worker, who arranged for the director to meet the worker and the worker's friend.

At the time, both workers in their early twenties were working on family farms. Neither had any experience in construction work nor had ever been in paid employment. Neither had been outside India before.

After interviewing them, the director offered them both a job and gave them a video about gib fixing. In his oral evidence, the director said he envisaged they could start from the bottom by clearing up rubbish and moving stuff once they got to the workplace and learn about gib fixing once they got to know the product.

After the employment documentation and visa process were completed, both workers traveled to New Zealand, arriving in late November 2023.

Disputes over start date and hours worked

The director picked them up from the airport, taking them home to his place, where they were to be provided with accommodation. They stayed at the director's home, traveling to work with him each morning, until they got a flat of their own which they moved into in mid-February 2024. The worker and his friend went to an employer workplace in early December 2023, saying this was the date they began work and should be paid for.

The director denied this was correct, saying both workers had only accompanied them to work that day and on subsequent days in December because they were bored by staying at home. He said they were not permitted to start work until arrangements for bank accounts and IRD numbers were completed, and that had not happened until late December. The director said they started work in early January 2024.

According to the director, their hours of work were no more than 32 per week, the number specified in their employment agreements. The worker said this was incorrect because he regularly worked up to 50 hours per week. Both the director and another employee said the worker's friend learned the requirements of the job quickly but the worker was slower to learn.

Performance concerns and warning letter issuance

They criticized the worker for poor work in fixing the sheets, either leaving screws too high or pushing them in too far. This meant the work was less likely to pass stringent building inspection requirements and could need expensive remedial work. They also said the worker made mistakes once he was introduced to measuring and cutting sheets, resulting in more wasted materials.

The worker said he had made what he called a small mistake in mid-February 2024 which led to the director shouting at him and refusing to let him work in the following days. The director's description differed, saying when asked why two gib sheets were wrongly installed, the worker got angry, said he did not want the job anymore, and left the work site. He did not come to work in the following days.

On 16 February, the director sent the worker a written warning letter saying he was not meeting expectations after a comprehensive four-week training period. It said he was expected to take immediate action to improve his performance or he could face further disciplinary action, up to and including termination of employment. The director did not meet with the worker to formally discuss his concerns before issuing that written warning.

Sick leave and medical certificate requests

The worker and his friend moved out of the director's residence into their own flat around this time and the worker returned to work the following week. By then they had also purchased a car so no longer relied on traveling to and from work with the director. The worker said the director and another employee continued to criticize his work in subsequent weeks which led him to take sick leave from early to mid-March.

He had provided the employer with medical certificates from a local GP for both weeks. At the beginning of the second week of sick leave, he sent the director an email saying he was experiencing significant challenges with depression which had made it difficult to perform at his best. He asked for the director's understanding that he needed more time to recover before returning to work.

In mid-March, the worker sent the director a further medical certificate from his GP stating he was struggling with low mood but is motivated to return to work. This led to the director writing to the worker's GP, copying the message to the worker, asking for an urgent and detailed report about the worker's recent communication regarding his low mood and mental health concerns.

The director's request said the worker had not disclosed any medical conditions or history during the hiring process and failure to cooperate with the request for more information may result in serious consequences, including termination of employment.

Performance review meeting and redundancy proposal

The worker returned to work in mid-March. The following day he received an email from the director calling him to a performance review meeting to be held at the end of the week. The email said his work had not been up to the mark and that before he took sick leave, he had been put on a training plan for 10 days.

The meeting was delayed while the worker sought advice and a translator to support him. A transcript of a recording taken of the meeting showed the director referred to the worker as taking ten days off work, in addition to his sick leave, within a two-month period. He also said the worker was putting up far fewer sheets each day than other workers, saying the worker's friend who had started at the same time and had the same training was putting up three times more sheets a day.

The worker did not accept that description, saying he did not get the same opportunities as others. No specific further steps for managing the worker's performance were referred to in the transcript.

Near the end of the discussion, however, the director said performance reviews were being conducted with other workers and the company was looking into a redundancy process because it was suffering financially at the moment.

Redundancy notice and dismissal process

The director said the workers were updated at weekly site meetings about a restructuring process. His documentation in support of that description were notes that he kept on his phone. There was no reliable evidence the director spoke with the worker again about the prospect of redundancy or any alternatives to it before sending him a letter in early April headed "notification of redundancy."

According to the director, the letter was prepared by him and his wife with the assistance of artificial intelligence software. The elaborately-worded description given in extracts from the letter did not match the evidence from him or the worker of what had in fact happened.

As revealed in the director's oral evidence, however, there was no established company protocol and the description of a dearth of projects did not refer to the employer's current work but his assessment of prospects for gaining contracts for work on other building projects.

The worker was the only employee dismissed for redundancy. Two other workers who had also been recruited in late 2023 but who did not actually start work until later than the worker and his friend were kept on. Those two other workers, along with another employee, did however have their work hours reduced in later months due to a reduction in project contracts.

Suspension during notice period and evidence assessment

On the evening in mid-April during the worker's notice period, he received an email from the director saying he had heard from colleagues that the worker had applied for a work visa elsewhere but his employment and work visa were linked to the employer. It said the worker could not attend work until he provided a copy of his current legal status.

The director's reasoning was that if the worker had arranged a transfer of his visa to a new employer, the employer could not legally allow him to work on its work sites.

By this time the worker had engaged employment advocates and correspondence was exchanged with the director over the situation in following days. The director said the worker had come to work but wasn't allowed to work because he chose not to provide his visa copy. The advocates' response said the worker was shouted at and sent home due to perceived issues with his work performance.

The assessment of evidence in this determination proved challenging. Both the worker and director initially insisted documents they provided were correct records of hours and days worked and were made on or near the dates given on those records. Both, however, admitted during questioning that their documents were at best compilations they had made at some later date.

Photographic evidence contradicting employer records

The assessment of evidence relied where possible on those records that bear a time or date set externally rather than handwritten by the worker or director at an uncertain time. Of particular importance were the photographs the worker took at particular worksites on particular days. The times and dates shown on those photographs at the employer workplaces did not match the later records the director had created, which suggested the worker was not at work on those days.

The first of these photographs was electronically stamped as being taken at 10:38am in early December 2023. It showed the worker and his friend in a partially lined room, standing in front of a stack of gib sheets, wearing hi-vis Alliance branded shirts and holding screw guns. The director said they had asked for this photo to be taken to send to family back home, but he denied they were working that day.

While that explanation was possible, it did not adequately explain what was shown in photographs taken on other days that the employer's records said the worker was not at work.

Further photographs showed him at construction sites, in work gear at work sites, in a scissor-lift work platform, and up a ladder holding a sealant gun. The director and another employee accepted the photographs were of work sites that were probably places the employer had jobs on at those times.

Authority's determination on hours worked and arrears

On the balance of probabilities, those photographs established that the worker's evidence that he was working for the employer from early December onwards was more likely to be correct. They also established that employer timesheets recording him as absent on those and some other days could not reasonably be relied on.

Generally, the employer paid the worker only the minimum 32 hours provided in his employment agreement, resulting in him not being paid at all for some days he had worked.

In circumstances where an employer defending an arrears claim has failed to keep or produce the required records and this has prejudiced the employee's ability to bring an accurate claim, the Authority may accept the employee's claims about what hours and days were worked and what wages were paid, unless the employer can prove those claims are incorrect.

In this case, the worker had established that he was not paid for some hours that he more likely than not had worked. He had not established, however, that the extent of the shortfall was as large as he claimed.

Given the limits of the available information, only a broad assessment was possible. On the balance of probabilities, the worker typically worked more than the bare 32 hours that the employer's pay slips showed he was paid for weeks that he was not away on sick or other leave. He did not, however, typically work between 45 and 50 hours per week as he claimed.

Arrears calculation and personal grievance findings

Instead, the arrears claim was determined on the likelihood that, on average, he was required to work 40 hours per week. This accorded with evidence from all witnesses that there were some days when shorter hours were worked, but other days were longer. The worker was accepted as having worked from early December 2023, including during the weeks worked in the Christmas and New Year period.

The ERA found the worker was entitled to payment of arrears for 334.5 additional hours of work at the $30 per hour pay rate in his employment agreement, totaling $10,035. The employer also short-paid the worker for five public holidays and paid him nothing for four other public holidays that fell during his employment. Because the worker was not paid for all hours worked, the calculation of his holiday pay entitlement at the end of his employment did not include his entire gross earnings, warranting a further amount of $802.80 as holiday pay.

The ERA found the employer did not act fairly and reasonably in issuing the worker a warning letter in mid-February. The director did not meet with the worker to discuss the prospect of a warning and seek his explanation about the concerns raised before issuing the letter. The letter told him to proactively seek assistance to improve his performance but did not set out the steps needed or identify clear goals against which his progress might be measured.

Unjustified dismissal and remedy determination

The Authority found the employer's heavy-handed threat that the worker could face serious consequences including termination of employment if he did not cooperate in having his doctor provide further detailed medical information clearly went too far. The employer also misleadingly told the worker that it was incurring additional costs to hire temporary casual workers from agencies to cover his role while he was on sick leave when it was not.

The ERA determined it was more likely than not that the director had already decided to resolve his concerns over the worker's performance by dismissing him on the grounds of redundancy. While there likely were genuine business reasons to consider staffing levels, the employer provided no evidence for the Authority investigation to substantiate what the director said about its financial position or forecasting of work at that time.

Even if the reasons for considering restructuring were genuine, the employer did not act justifiably because it failed to adequately consult the worker, including by not adequately exploring what alternatives to dismissal there may have been.

The employer again acted unjustifiably in refusing to let the worker come to work on some days during his notice period. The award for lost wages was limited to 12 weeks totaling $14,400, along with $1,152 as holiday pay due on the lost wages awarded for that period. The worker's evidence established how upset he was by how he was treated in seeking to establish himself in a new job and a new country, both of which he had no prior experience.

Penalties and personal liability determination

Because the director had recruited him personally in India, the employer was also aware of the potential vulnerability of the worker in those circumstances. Considering the particular circumstances and the range of awards in similar cases, the sum of $15,000 was an appropriate award of compensation for humiliation, loss of dignity, and injury to feelings.

Weighing the relevant factors and the range of penalties in similar circumstances, the employer must pay a penalty of $3,000 for breach of the Wages Protection Act and $2,000 for breach of good faith obligations.

The worker also sought a penalty to be imposed on the director personally for aiding and abetting a breach of his employment agreement. In the circumstances of this case, the personal penalty claim had an element of double jeopardy given the penalties already awarded against the employer, a company in which the director is the sole director and sole shareholder.

The ERA considered it appropriate to decline to impose the additional personal penalty, in part because the director may have to personally pay the substantial amounts awarded for arrears of wages and holiday pay if the employer is not able to do so.

The ERA determined there was no doubt that the director, as the director and shareholder and active throughout in the work and administration of the employer, was a person involved in the breach of employment standards.

He accepted in his evidence that he was responsible for all decisions made by or on behalf of the company. In those circumstances, it was appropriate to give the worker prior leave to recover from the director the arrears of wages and other money that the employer has been ordered to pay, if the employer is unable to pay those arrears.