Have I got your attention? Good.
Before I continue let me qualify my opening statement. What I’m talking about here is exploitation and breaches of the minimum code. It’s rife among SMEs (small and medium sized enterprises) in New Zealand and they are considerably worse at meeting their obligations than their larger corporate cousins. Not all small business owners are shoddy employers but there are plenty operating in the labour market that tarnish the reputation for the whole lot.
Recently I was approached by a young worker who was working at a fish and chip shop in Edgecumbe and had her pay cut twice without any consultation. Obviously this is a blatant breach of the Wages Protection Act – employers cannot makes changes to pay without the express consent of the employee. What makes it worse though, is that her final pay rate ended up less than the minimum wage and she was never provided a written employment agreement. This is not uncommon.
A few weeks earlier I received a call from the mother of a 16-year-old. The young man was working in a Hamilton cafe and his boss informed him they were going to reduce his pay rate from $16.50 to $13.20. They’d recently learned about the existence of the starting out rate or ‘youth rate’ and thought “sweet! I can pay this person less and save me some money.” The fact that the young man’s contract clearly stated his pay rate was $16.50 per hour and he’d already been working for them for months didn’t seem to bother them.
In another case a Four Square owner in the South Waikato made three young women sign a contract waiving their right to time-and-a-half on public holidays, in clear breach of the minimum code. I’ve got hundreds more stories just like this.
I’d wager a significant chunk of exploitation by SMEs is not deliberate and largely due to ignorance – but ignorance is no excuse. Yes the law can be complex but if you can’t navigate employment legislation then I struggle to see how you can effectively manage the challenges of running a business.
Earlier this week a teenage woman working at a New World supermarket (owner-operated) told me she had been refused a paid sick day despite having been employed there for over seven months. Of course we all know that five paid sick days after working continuously for an employer for six months is a minimum right. She raised it with payroll and was told she was not entitled to paid sick leave. She was given no other explanation but I suspect it might have something to do with the fact that she was initially hired on a casual contract during her 90 day trial period and after three months was given a new permanent part-time contract. This implied that in her employer’s eyes her six months began after she received her new contract and that perhaps they thought casuals weren’t entitled to sick leave.
Upon hearing this my blood started to boil. Firstly, it does not matter whether your contract has changed – your entitlement to sick leave is dependent only on continuous service AND casuals ARE entitled to paid sick leave. Making it worse was the fact that the young worker was never casual in the first place. Right from the get-go she was rostered on three permanent shifts per week with an expectation of availability for more. Shades of zero hour contracts. So the true nature of her employment was also permanent part-time. She should never have been given a casual contract. A lot of employers mistake part-timers for casuals and they need to educate themselves.
Lastly, trial periods are NOT fixed-term contracts! There’s no reason why she should have been given a new contract at the end of her 90 days, she was permanent from the beginning. Also I detest the notion that you hire someone as a casual during their trial to test them out. The only reason to hire casuals is because you have a genuine business need to call on emergency labour. Besides, there’s no reason to have trial periods for true casuals anyway since there is no legal obligation to provide them work.
I think this employer, or maybe it was just an overzealous payroll clerk drunk on power, lacks the required understanding of employment relationships, and sadly they are not alone.
There will be those, possibly business owners themselves, that will defend SMEs to the hilt and bemoan the challenges of operating a small enterprise in New Zealand. “Small businesses are the backbone of the economy” yada yada yada. This does not excuse you of your responsibilities. Sure it’s hard but I’m tempted to play a few notes on my microscopic violin because if you choose to start a business you must have an acute understanding of your legal obligations to your staff. Business leaders like to assert that workers need to be more ‘responsible’ but many aren’t setting a good example themselves.
To my knowledge there’s no mandatory training for aspiring business owners to learn the essentials of employment law so they can fulfill their obligations to their staff. Personally, I don’t think you should be allowed to start an SME until you’ve proven you know your stuff. We don’t let drivers on the road without a license so we shouldn’t accept employers who don’t understand how to run a fair business.
To any business owners who might be reading I’ll leave you with a couple of questions:
Are you okay with workers, and the law, being exploited so you can maximise your profit? Would you be okay with your kids being paid less than they’re entitled to?