21 April 2024

Convenience store, director held liable for labour law breaches

ERA imposes $27,000 in penalties

The Employment Relations Authority (ERA) has ordered Satyam Limited, which was operating a convenience store in Dunedin, to pay $18,000 in penalties, and its sole director, Sunilkumar Dalpatbhai Mistry, to personally pay a further $9,000 in penalties for negligent record keeping and holiday pay breaches.

The penalties are in addition to $3,000 of infringement fees paid earlier for record keeping failures and more than $6,000 owed to five workers in unpaid holiday entitlements.

Satyam accepted that it had breached employment standards. The business ceased trading from August 2018, individuals cannot avoid payments to the ERA even if they close their business .

Sunilkumar Dalpatbhai Mistry is currently listed as the director and shareholder of three other companies that are trading as convenience stores: A1 Trade Limited, Harinaman Limited and Haricharan Limited, which trades as the Rendezvous dairy.

The five employees affected,in one or the other, were: Diptikumari Solanki, Kalpesh Patel, Radhika Patel, Shraddha Miyani and Ilaben Jatakiya.

In the determination of 4 November, the ERA accepted “the employees employed by Satyam were vulnerable because they were on work visas and in receipt of minimum or low wages… The records kept for holidays and leave and wage and time were poor and inadequate. ”

The Labour Inspectorate investigated Satyam Limited, in December 2017, as part of a proactive audit of retail operators. It found the employer failed to keep accurate time, wage and holiday records, and to pay workers time and a half for working on public holidays.

The Labour Inspector issued an improvement notice requiring the employer to rectify their practices. Despite several engagements, the employer was still unable to demonstrate full compliance, and the Labour Inspectorate took the case to the ERA.

The ERA found Mistry directly responsible for the failures in that his actions were negligent and not consistent with the employer’s obligations of good faith.

“The employer’s half-hearted attempts to rectify their record keeping were not enough. This is not acceptable, especially given Mistry is a director and shareholder of other companies,” says Labour Inspectorate Southern Regional Manager, Jeanie Borsboom.

Over the past year, the Labour Inspectorate has taken 19 cases to the ERA or the Employment Court that resulted in company directors being found personally responsible for employment law breaches. This totalled to $259,083 in wage and holiday pay arrears to workers and $475,176 in penalties to be paid personally by the individuals (this includes the $9,000 penalty ordered against Mr Mistry).

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