ARTICLE
23 April 2018

Christchurch employer banned from employing staff for three years

The employer was banned from employing staff and also ordered to pay a penalty, for multiple breaches of employment law.
New Zealand Employment and HR
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The Employment Court has issued the first banning order pursuant to the Employment Relations Act 2000, two years after the sanction was introduced into legislation in 2016.

Gordon Freeman, the former owner of the Watershed bar and restaurant and Sequoia 88 restaurant in Christchurch, has been banned from employing staff for three years and ordered to pay a penalty of $10,000, as a result of multiple breaches of employment law.

The primary issue was Mr Freeman relying on an illegal forfeiture clause in his company's employment agreements. This clause purported to allow the employer to deduct money from wages and holiday pay where an employee did not give the contractually required notice period when resigning. These clauses are common, particularly in old employment agreements, and are fraught with risk. An employer wishing to make deductions from wages, particularly as a penalty for a failure by the employer to give the contractual period of notice, should take legal advice before doing so.

A banning order is a significant sanction with serious consequences for the individual involved. In this case, the order and penalty were agreed to between the parties, meaning care needs to be taken in applying it to other factual situations. However, it is a timely reminder of the serious consequences of breaching basic employment law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
23 April 2018

Christchurch employer banned from employing staff for three years

New Zealand Employment and HR
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