Hawke’s Bay company to pay $48k in employment breaches

Published 1 August 2024 | 2 min read

Running a business is no small feat. It requires a keen understanding of various operational facets, from managing finances to ensuring compliance with employment laws. One crucial aspect that can never be overlooked is the meticulous management of employee records, including time, holidays, and leave. Keeping abreast of changes in New Zealand employment law is essential for avoiding costly penalties and maintaining a healthy work environment.

Hidden risk for long-standing businesses

For businesses that have been operating for many years, there can be a risk of becoming complacent. This complacency can lead to outdated practices and non-compliance with new legislation. Over time, what might have been a minor oversight can escalate into significant breaches of employment standards, as seen in a recent case involving a Hawke’s Bay company.

Case of employment standards breach

A Hawke’s Bay horticulture company and its owner were recently ordered to pay $48,000 in penalties by the Employment Relations Authority (ERA) for breaching minimum employment standards. The case highlighted several critical failures:

• Not keeping sufficient wage and time records
• Not keeping sufficient holidays and leave records
• Not paying employees for public holidays that were otherwise working days
• Not paying employees at least time and a half for working on public holidays

This breach was uncovered following a Labour Inspectorate investigation in 2021, which revealed systemic issues in the company’s record-keeping and compliance practices. The owner, despite being banned from directorship and management roles until 2028, was found to be actively involved in the business operations.

Learning from mistakes

While this situation poses immediate financial and reputational challenges for the involved company, it also offers a valuable lesson for other businesses. Ensuring rigorous adherence to employment standards and maintaining accurate records can prevent similar issues. By addressing and rectifying these shortcomings, companies can foster a more transparent and fair workplace, ultimately leading to improved employee satisfaction and reduced legal risks.

Achieving compliance

To avoid falling into the same pitfalls, businesses should take proactive steps towards ensuring compliance with employment laws. Here’s how:

• Regular audits: Conduct regular internal audits of employment records to ensure all documentation is complete and accurate.
• Internal training: Provide ongoing training for management and HR staff on the latest employment laws and record-keeping requirements.
• Technology investment: Invest in reliable HR software that automates time tracking, leave management, and record maintenance.
• Consultation: Engage with legal and HR consultants such as EQ Consultants to review practices and provide guidance on compliance.
• Employee communication: Establish clear communication channels with employees regarding their rights and the company’s obligations.

This case from Hawke’s Bay serves as a stark reminder of the importance of diligent record-keeping and the severe consequences of neglecting this aspect of business management.