ERA further faults employer for failure to participate in proceedings
The Employment Relations Authority (ERA) recently dealt with a case involving a migrant worker who claimed wage arrears and unjustified dismissal against his employer.
The dispute sheds light on the vulnerabilities faced by migrant workers and the consequences of failing to meet basic employment standards.
The case underscores the importance of proper employment practices and the potential repercussions for employers who fail to meet their obligations.
Background of the employment relationship
The case centred around a migrant worker employed as a full-time painting labourer. The employer operated under the trading name "Painters Inc.", which was not a legal entity.
The employment relationship began on 3 October 2023, with the worker performing painting and plastering work at various locations.
Notably, the worker did not receive a written employment agreement until the beginning of November, which he signed on 13 November 2023.
The employer had supported the worker's work visa application, placing the worker in a dependent position.
Wage arrears and employment agreement breaches
According to the employment agreement, the worker was guaranteed at least 30 hours of work each week, with a maximum potential of 60 hours. The agreed pay rate was $30.00 gross per hour, to be paid into the worker's nominated bank account.
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The worker claimed he was not paid at all for the 335.5 hours of work he performed between 3 October and 23 November 2023. This non-payment of wages constituted a clear breach of the employment agreement and employment standards.
In mid-November, the employer called a meeting with all workers, stating that he couldn't pay them due to not receiving payment from the construction company. Despite this, the employer continued to call the worker to work, using the worker's visa situation as leverage.
Constructive dismissal and unjustified termination
The ERA determined that the employer's actions amounted to constructive dismissal. The failure to pay wages and the cessation of work allocation from 23 November 2023 effectively terminated the worker's employment.
The Authority emphasised the seriousness of these breaches:
"These are fundamental breaches of the trust and confidence that is inherent in an employment relationship. It was reasonably foreseeable the [worker] would not be able to continue working under such circumstances."
The ERA found the dismissal to be unjustified, as the employer failed to follow proper procedures and breached good faith obligations.
The employer's failure to provide employment documentation, including wage and time records, further prejudiced the worker's ability to bring an accurate claim for wage arrears.
Employer's non-engagement in the process
It's important to note that the employer did not participate in the Authority's investigation at all. They failed to lodge a statement in reply, did not comply with directions to provide employment documentation, and did not attend the Case Management Conference or the investigation meeting. This non-engagement led the Authority to accept the worker's uncontested evidence.
In light of the employer's actions, the ERA ordered significant compensation for the worker. This included:
- $10,870.20 in gross wage arrears (including holiday pay)
- Interest on the wage arrears from 20 November 2023 until full payment
- $11,700.00 in lost remuneration (equivalent to three months' pay)
- $20,000.00 in distress compensation
The Authority explained the rationale behind the substantial distress compensation:
"As a migrant worker on a work visa that was linked to his employer, he was in a particularly vulnerable position. The [worker] described feeling threatened and intimidated by the messages he received from the [employer's] friends, warning him to be careful who he was dealing with and threatening that his visa would be taken away."
This case serves as a reminder of the importance of adhering to employment standards and the potential consequences of exploitation, especially concerning migrant workers. The ERA's decision emphasised:
"This finding that the [employer] has breached employment standards has been recorded by the Authority as it may be relevant Immigration New Zealand's assessment of the [employer's] future support of work visa applications for other employees."
The ERA's ruling sends a clear message about the seriousness with which employment law breaches are treated, particularly when they involve vulnerable workers.