Employer ordered to reimburse underpaid Christchurch rebuild workers

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An investigation by the Ministry of Business, Innovation and Employment (MBIE) has revealed a Christchurch company’s failure to provide employees with the minimum wage or basic standards of employment. 

The MBIE’s inquiry was prompted by complaints from two workers involved in the rebuilding of the city.

James Hayes, who was one of the workers behind the complaints, claimed to have been infrequently paid by his boss. Although he had not signed an employment agreement, he was under the impression that he was an employee and thus entitled to a regular wage.

The MBIE found that over two months of employment, both men had been treated as contractors, and were paid wages that amounted to less than the minimum wage. It was also found that neither of them had been given leave or holiday pay.

The Employment Relations Authority (ERA) subsequently ruled that the men were in fact employees, having worn uniforms, been provided with equipment and not conducted any business outside of the company. 

The company under investigation, Verney Construction, was unable to provide employment agreements or time, wage and holiday record for the employees upon request.
Verney was ordered to pay a $2000 fine in addition to reimbursing the men for their unpaid wages.

According to one government labour inspector, these cases involving the disregarding of employment law are on the increase.

“This is a disappointing trend that we are starting to see nationally – employers treating employees as contractors to avoid keeping records, making payments to IRD and paying the minimum wage and holiday entitlements,” said Stuart Lumsden, regional manager at Labour Inspectorate Southern.

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