Dunedin firm ordered to pay workers $14,000

A major Dunedin-based cleaning company which has launched a campaign against part of the Employment Relations Act has again been hit by a court decision and ordered to pay an Auckland couple more than $14,000.

Crest Commercial Cleaning last week took its fight online for changes to be made to part 6A of the Employment Relations Act (ERA), created to provide protection to vulnerable employees.

In a case centred on part 6A, the company had now been ordered to reimburse wages and pay damages to two employees, totalling $14,264.

The Employment Relations Authority found Crest had unjustifiably dismissed Aisea Fotu and Manu Fotu, and failed to comply with part 6A.

Under the law if a client signs a new cleaning contract, 'vulnerable workers' such as cleaners are given the right to transfer their employment under the same terms and conditions.

Crest had been told to pay Aisea Fotu $2193.75 for lost wages and $4500 as compensation, and Manu Fotu $3071.25 lost wages and $4500 as compensation.

It was also ordered to pay costs of $1000 and the filing fee of $71.56 to the Service & Food Workers Union.

This came after a similar decision in June, which saw Crest lose a case against Nelson cleaner Roger Doran. The company was ordered to pay Doran almost $5000.

Mr and Mrs Fotu were employed by another cleaning company at Taylors College in Auckland when Crest was awarded that contract in March this year.

Under Part 6A, the Fotus were entitled to transfer their employment to Crest and carry on as usual.

But Crest refused to take the couple on as employees, on grounds that the previous employer had not provided certain details about the Fotus.

Taking the case to the Authority, the Fotus heard there was only one condition of transfer required, that the couple clearly state their wish to work for Crest.

The Fotus had done this on March 5, the Authority said.

"I find that in the circumstances of this case there was nothing to make the transfer unworkable or prevent Crest from employing the Fotus."

The Authority said the married couple gave evidence of the humiliation, loss of dignity and injury to feelings they suffered from losing their jobs.

"Half their family income was lost, causing them to be stretched financially, and they also felt embarrassment through having to borrow money from family members to pay for financial commitments which had been undertaken on the basis of their ongoing employment."

The Fotus were "entirely blameless" for the situation, the Authority said.

Crest managing director Grant McLauchlan held the firm belief that part 6A of the ERA was a roadblock to business confidence and growth.

He launched a site last week called "vulnerable minister", targeting Minister of Labour Kate Wilkinson.

The website came after three years of lobbying the Government to change part 6A of the ERA.

McLauchlan said the legislation was ambiguous and needed clarity and that his company were finding out the day before it took over a new contract.

A spokeswoman for Wilkinson told the Herald the minister was considering the review of part 6A as part of a raft of improvements to the ERA.

"These are now going through the Cabinet process and will be announced once Cabinet has made final decisions."

Part 6A of the ERA 2000 was created to provide protection to certain employees if, "as a result of a proposed restructuring, their work is to be performed by another person".

The Act covered industries such as cleaning, and food and laundry services, which were subject to frequent contract changes which leave employees vulnerable to restructuring or redundancy.

- Ben Chapman-Smith, Herald Online


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