This is why companies must be careful about treating permanent employees as casuals
The latest incident involving breaches of the Holiday Act has highlighted just why employers need to understand their obligations to their employees from the outset - and stay up-to-date with any procedural changes that occur.
Two tavern owners in Canterbury have been ordered to pay $30,000 by the Employment Relations Authority (ERA) for 30 breaches of the Holidays Act.
It follows an investigation by the Labour Inspectorate into the minimum rights of 17 employees at the pub.
The owners and operators of the Coalgate Tavern for more than 30 years, Malcolm and Claire Bennett, have been penalised for failing to provide three employees with minimum holiday rights, by treating them as casual employees despite them being permanent staff.
Moreover, the ERA determined that while the Bennetts had “no intention to actively exploit or disadvantage the employees,” they had “recklessly shut their eyes to their obligations under the Holidays Act”.
The ERA also determined that by employing the staff as casual employees, the staff did not receive paid sick leave, bereavement leave or annual or public holiday entitlements.
One employee who had worked for the pair for 10 years was only paid for one sick day throughout the period. She also worked whilst unwell having been told by the Bennetts that she wasn’t entitled to paid leave.
Inspectorate regional manager, Jeanie Borsboom, said that another employee did not take any time off work when her mother died because she couldn’t afford to take unpaid leave.
“These breaches occurred over a significant period of time, it was only after the investigation began that the Bennetts engaged with a payroll company to help them pay their employees correctly and record holiday entitlements,” said Borsboom.
It is “simply not acceptable” for employers to fail to meet their employees’ basic rights, added Borsboom.
“The purpose of the Holidays Act is to provide balance between work and other aspects of employees’ lives. Where employees are not paid correctly for time off work, their quality of life suffers.”
Borsboom said that the Authority found the lack of sick leave particularly serious as it hits at the very heart of the objective of the Holidays Act.
“In this case, one of the employees raised concerns when she realised she was entitled to annual leave and this should have triggered the Bennetts into reviewing their practice. Instead they recklessly ignored their obligations.”