Director to pay $9000 penalty for labour law breaches

A Dunedin convenience store owner has been ordered to pay $18,000 in penalties, and its director to personally pay a further $9000 in penalties for negligent record-keeping and holiday pay breaches.

The penalties are in addition to $3000 of infringement fees paid earlier for record-keeping failures and more than $6000 owed to five workers in unpaid holiday entitlements.

The Employment Relations Authority (ERA) has ordered Satyam Ltd to pay the $18,000 worth of penalties, and its director, Sunilkumar Dalpatbhai Mistry, to personally pay the $9000 in penalties.

Satyam Ltd ceased trading from August 2018.

Mr Mistry is listed as the director and shareholder of three other companies trading as convenience stores: A1 Trade Ltd, Harinaman Ltd and Haricharan Ltd, which trades as the Rendezvous dairy.

The Labour Inspectorate investigated Satyam Ltd in December 2017, as part of a proactive audit of retail operators.

It found the employer failed to keep accurate time, wage and holiday records and to pay workers time and a-half for working on public holidays.

The Labour Inspector issued an improvement notice.

Despite several engagements, the employer was still unable to demonstrate full compliance, and the Labour Inspectorate took the case to the ERA.

The ERA found Mr Mistry directly responsible for the failures, in that his actions were negligent and not consistent with the employer's obligations of good faith.

"The penalties send a clear message that employers cannot avoid their obligations and that the Labour Inspectorate will seek personal accountability from directors,'' Labour Inspectorate southern regional manager Jeanie Borsboom said.

Personal liability means individuals cannot avoid payments to the ERA, even if they close their business.

Over the past year, the Labour Inspectorate has taken 19 cases to the ERA or the Employment Court that resulted in company directors being found personally responsible for employment law breaches.

This totalled $259,083 in wage and holiday pay arrears to workers and $475,176 in penalties to be paid personally by the individuals (this includes the $9000 penalty ordered against Mr Mistry).

"Retail is a focus area for the Labour Inspectorate as the sector tends to employ many vulnerable workers, including migrants and young people on minimum or low wages.

"The employer's half-hearted attempts to rectify their record keeping were not enough. This is not acceptable, especially given Mr Mistry is a director and shareholder of other companies.

"Had the employer complied with the improvement notice within a reasonable time frame, the penalties would have been avoided. These are obligations that employers must take seriously and if they do not have the necessary skills or resources, then they should seek professional advice and services,'' said Ms Borsboom.

Auckland lawyer Umar Kuddus said Mr Mistry was not willing to respond to requests for comment from the Otago Daily Times yesterday.


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