A ‘trainee’ must be in training

A former Dunedin pharmacy owes thousands of dollars in wage arrears for paying former staff, whom it called ‘trainees’, less than the minimum wage. Where did they go wrong?

BY Rose Sneyd 03 Apr 2013

A company that ran a Dunedin pharmacy has been ordered to pay thousands of dollars in wage arrears for paying three of its former employees less than the adult minimum wage.

The company director, Ravi Vohora, persisted for several years in his claim that the staff members had been in training as pharmacy technicians since he employed them. Employment Court Judge Christina Inglis rejected the assertion.

None of the employees were enrolled in an approved course of study and, therefore, they could not be considered ‘trainees’. In fact, the employees were entitled to receive the minimum wage while working at the pharmacy and until they were properly enrolled. “As none of them was ever enrolled, they were underpaid for the entire period of their employment,” Inglis wrote.

“Exceptions to the minimum wage are narrow and clearly defined. A training wage can only be paid to staff that are doing 60 credits a year with a recognised industry training organisation,” George Mason, general manager of the Labour inspectorate, explained.

The company had received several warnings that they could not pay their employees below the minimum wage from the Labour Inspectorate. When no action was taken to amend the issue, the Labour Inspectorate brought a claim on behalf of the employees, winning their case at the Employment Relations Authority. “The Ministry takes all minimum wage breaches seriously and employers can expect to face strong and determined enforcement action if they refuse to comply with the law,” Mason said.

The company was unsuccessful in its appeal to overturn the decision at the Employment Court. As a consequence the company was ordered to pay around $6,000 in wage arrears.

Key HR Takeaway:

In her judgement, Judge Inglis directed attention to the two crucial definitions of ‘trainee’ and ‘industry training programme’.
The Minimum Wage Order 2009 defines a ‘trainee’ as a worker who is:

aged 16 years or more to whom the Act applies; and
required by his or her contract of service to undertake at least 60 credits a year of an industry training progamme for the purposes of becoming qualified for the occupation to which the contract of service relates.

And an ‘Industry Training Programme’ is one “that is registered on the National Qualifications Framework developed by the New Zealand Qualifications Authority pursuant to its functions under section 253 of the Education Act 1989.”