15 April 2024

Mobil dealer fined $23k for making staff pay to keep jobs

A South Auckland Mobil petrol station has been ordered to pay a heavy fine for having a policy that staff on duty would have to cover the cost of fuel taken by customers who drive off without paying.

The Employment Relations Authority (ERA) has ordered Mittal and Son Limited (MSL), trading as Mobil Porchester Road, to pay $20,000 for breaches, likened to the workers having to pay a premium to keep their jobs.

MSL’s individual employment agreements contained a policy that staff on duty would have to cover the cost of fuel taken by customers who drive off without paying. This policy was applied in the case of at least two workers, one of them was under 20-years-old.

The ERA determined MSL director, Sohan Mittal also personally liable for an additional $3,000 in penalties.

Labour Inspectorate Regional Manager Callum McMillan says the issue of pay-docking for fuel pump drive-offs has been raised in the past across the industry.

“It’s extremely disappointing to see that Mobil has failed to stop these sorts of issues from occurring in businesses that trade under its brand. 

“The fact that an employee has signed an employment agreement that forced them to pay for theft by customers, does not make the clause or its enforcement legal.”

The ERA found this is basically the same as charging an employment premium, which demonstrates the inherent imbalance of power in an employment relationship.

Mittal said he was not aware the company was breaching the employment law, even after he sought legal advice on MSL’s employment agreements.

The ERA heard MSL had taken steps to rectify their practises, including changing their payroll provider to ensure compliance with records keeping and holiday pay obligations. The drive-off policy had since been removed from the individual employment agreements. All fuel pumps had been changed to pre-pay to prevent drive-offs, and affected employees had been repaid.

“Mobil should take leadership to ensure that businesses licensed to carry their brand are complying with minimum employment standards and treating their frontline staff fairly. Failure to do so brings into question Mobil’s claim of being a ‘responsible corporate citizen’ and tarnishes the reputation of all Mobil outlets,” says McMillan.

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