Archive for December, 2009

A full bench of the Employment Court has decided by 2-1 that the statutory minimum pay rate for hourly workers cannot be undermined by allowing employers to do an “averaging” calculation over a weekly, fortnightly, monthly or seasonal pay period.

While the case they were hearing (Phillip William Dickson vs IDEA Services Limited) started off as a very simple one over whether disability workers doing sleepovers on their employer’s premises were “working” and should be entitled to the statutory minimum wage, it took a different turn when the employer began to argue that the minimum rate of $12.50/hour was only an average rate.

On 8 July the Court stated unequivocally that SFWU member Phillip Dickson was working when on a sleepover shift and should be entitled to the statutory minimum wage rather than the $34.00 a night he was receiving.

The Court, however, asked to hear further submissions on the Employer’s argument that the $34.00 a night might not be legally permissible if Phil Dickson was being paid a high enough rate for the rest of the fortnightly pay period to give him an average of $12.50 an hour.

At the subsequent hearing the Unions (SFWU, PSA and CTU) found themselves lined up against IHC, the National Residential Intellectual Disability employers, Business NZ and the Department of Labour, all of whom were arguing in favour of “averaging”.

It was particularly galling to see the Department of Labour, whose Labour Inspectorate is tasked with enforcing the Minimum Wages Act for tens of thousands of vulnerable workers, saying that it might be legal for an individual agreement rate of $3.00 an hour to be legal if the employer paid the worker a much higher rate for other hours, so that an “average” of $12.50 an hour was achieved.

It is difficult enough now for workers to estimate their entitlements and prove they are being exploited without averaging complications being brought into it.

The DoL and employer argument could also lead to workers being paid $3.00 an hour for their sick leave if they happened to be sick on a day that they normally were paid $3.00 an hour, or to be paid $4.50 an hour if a public holiday occurred on that day and they were required to work.

The Court, in reflecting on the original Minimum Wages Act 1945, said that the purpose of the legislation was to ensure that “workers received a minimum rate of wages for every part of their work.” It went on to note that “by this means it countered exploitation of vulnerable workers, many of whom were employed on a casual or daily basis.”

More significantly the Court noted that these objectives had become even more important because of the greater incidence of casual and part time work and receiving the minimum rate of pay for every part of your work was of even greater significance than it had been previously.

This is a strong stand by the Employment Court. While the argument over sleepovers and the minimum wage will not finish here, over 10,000 community support workers in the disability sector now know that their claim for proper recognition and payment has taken another step forward.


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