Smiths City ordered to pay staff for unpaid meetings

From Checkpoint, 5:22 pm on 11 May 2018

The government has issued a stern warning to businesses which aren't properly paying staff for their time: Fix it, because "we will be coming knocking".

It comes after retail chain Smiths City was caught underpaying minimum wage workers for at least 15 years, leading to a potential seven figure payout to hundreds of employees.

Smiths City staff were expected to turn up at 8.45am - a quarter of an hour before their shifts began - for daily meetings designed to make them "more effective in making sales".

"We believe there are a number of other employers who have been employing the same practice or similar things," Ministry of Business Innovation and Employment labour inspectorate regional manager Loua Ward said.

"Like requiring people to work after the store has closed to cash up tills, or shift changeovers, and that not being paid.

"This decision makes it very clear those activities are work and we will be coming knocking.

"So my advice, and the labour inspectorates advice to businesses, is to get your business in order and make sure employees are being paid for all the time they spend working."

Smiths City has to work out how much it owes affected employees, and back-pay them, by 8 August this year.

But it only has to go back six years, not the whole 15 years it was underpaying staff, and Smiths City chief executive Roy Campbell won't go further than the ruling enforces.

The Council of Trade Unions, which gave expert advice to Chief Employment Court Judge Christina Inglis for the case, said it should look for and pay back anyone affected.

"If they do have information about the underpayment going back beyond that, then a sensible and logical decision would be to go, 'We have underpaid workers for beyond those six years,' and make available resources to pay them back for those longer periods," CTU secretary Sam Huggard said.

"It's completely unfair to expect workers to turn up to work, be part of a work meeting, or undertake any other work activity, and not get paid for it," he said.

In November of 2016, the case came before the Employment Relations Authority, which ruled in Smiths City's favour, saying the meetings varied from store to store, and as attendance was not monitored by some managers, it was impossible to tell whether staff were paid for their time.

However the labour inspectorate appealed this ruling up to the employment court.

Earlier this week the presiding Judge Christina Inglis over-ruled the ERA's ruling.

Judge Inglis said the meetings were conducted according to a standardised template provided by the company, and while the meetings had an informal tone, workers were expected to attend, and were admonished - and in some cases issued formal warnings - if they skipped them.

She said a full-time worker on minimum wage would miss out on about $800 a year because of the meetings - and that took their total remuneration below the minimum wage threshold.

Smiths City employs about 450 people.

Judge Inglis ordered Smiths City to work out how much it owed affected employees and back-pay them by 8 August this year.

Smith City chief executive Roy Campbell said it accepted the ruling.

"We wish to be seen as an ethical and fair employer, if we have through some unconscious error and determination not conducted ourselves well and we've been found to do so, we're happy to admit to that, address the issue and to move forward."