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Tourism business hit with $7500 penalty for refusing to hand over employment records

The owner of a small tourism business hit with a $7500 penalty for refusing to hand over employment records plans to appeal the decision. Photo / Supplied

A small tourism business hit with a $7500 penalty for refusing to hand over employment records says it will fight the decision so it can stay afloat.

The Employment Relations Authority (ERA) has backed a Labor Inspectorate’s request for the Akaroa Village Inn to hand over records dating back to March last year and issued a $7500 penalty for its failure to comply with the initial request.

The case centers around complaints related to public holidays and the records were requested as evidence a breach of employment standards had been rectified.

The owner of Caisteal An Ime Ltd (CAIL), the business that operates the inn, believes the inspectorate’s request has no legal basis.

It argued that the request was unreasonable, disproportionate, replicated work already undertaken, was an abuse of power and harassment.

It sought to have the claim dismissed and to have the authority take appropriate action against the Labor Inspectorate for what it described as breaches of the Employment Relations Act 2000.

The ERA said the request was reasonable, did not violate the company’s rights, and was neither an abuse of power nor harassment.

CAIL owner Darren Angus told Open Justice his business only just survived the effects of the Covid-induced tourism downturn and ended the last financial year with a $2000 profit.

“We were never asked about our ability to pay (the penalty).

“We run a motel and ice cream shop in a tourist town, and we’ve only just kept our heads above water,” Angus said.

The Employment Relations Authority has backed a Labor Inspectorate's request for the Akaroa Village Inn to hand over employee records.  Photo / Supplied
The Employment Relations Authority has backed a Labor Inspectorate’s request for the Akaroa Village Inn to hand over employee records. Photo / Supplied

The ERA said CAIL did not raise any issue about its ability to pay.

The dispute dates back two years after complaints over employment standards at the hospitality business.

In October 2020 CAIL was found to have breached “minimum employment standards”, but agreed to rectify them and provide evidence it had done so by March 1 last year.

The Labor Inspectorate did not think the request had been fully met and suggested CAIL conduct another analysis or send employment records so it could conduct an analysis.

The business felt it had fully complied through its own audit of records and timesheets, but disagreement led to a notice from the inspectorate on March 30 last year, requesting copies of wages and time records, holiday and leave records and employment agreements for all employees from its first day of business until March 28, 2021.

Much of the inspectorate’s concern was whether CAIL correctly applied the law about “otherwise working days” and whether it was able to pay holiday pay on a regular basis.

Entitlement to an alternative holiday arises if an employee works on a public holiday that falls on a day that would be a working day for the employee, as set out in their contract.

Angus said they typically employ backpackers and tourists who might work a couple of weeks before moving on.

He’s now preparing an appeal on the basis the business had reasonable grounds not to present the documents.

The former HR manager, who says he is well familiar with analyzing employment data, is representing himself in the case.

“We’re not hiding anything – they [the documents] exist, but we believe the investigation process was flawed.”

Angus says he doesn’t believe there was a justifiable reason for handing over all records when he failed to get a clear response as to what they were looking for, including in a redacted response to a request lodged under the Official Information Act.

Angus inferred the matter was personal, but the ERA said the motivation was clear from the documentation that the labor inspector was concerned that CAIL had still not correctly applied the Holidays Act 2003, despite the enforceable undertaking.

It found that CAIL had no reasonable cause for its failure to comply. It said the business was liable for a penalty of up to $20,000 but found its failure would warrant a penalty of $7500, to be paid to the Crown.

“That, in particular, would recognize CAIL’s compliance to the point of the undertaking but its intentional breach thereafter, the absence of similar breaches but the significance of powers given to a Labor Inspector,” the ERA said.

Labor Inspectorate regional manager Jeanie Borsboom told Open Justice she would not comment on the basis there was an indication of appeal.

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