Wage and time records are not the sexiest or most captivating aspect of employment law. Indeed, it is an element of HR that is easy for even the best, most diligent practitioners to forget. However, while it may not be particularly exciting, a recent case in the Employment Relations Authority (Shi v Advanced Computers Limited  NZERA Auckland 23) highlights the importance for employers of keeping these records. In this case, the employee claimed that he had not been paid for the hours that he had worked.
Mr Shi, an experienced and qualified IT technician, applied for a computer technician role with Advanced Computers Limited, and started at the end of April 2014. He was given a casual employment agreement, which stated (somewhat unclearly) that
“The hours of work shall be those as offered by the Company and agreed to by the Employee, which must match on-service charge hours on repair jobs accomplished with full payment”.
The Agreement went on to state that Mr Shi would be paid $15 gross per hour, and that only hours actually worked would be paid for. The Agreement also stated that all paid hours must be recorded on the staff timesheet with the supervisor’s or manager’s signature.
Mr Shi’s evidence was that he generally started work between 9.30am and 10.00am each day, and finished between 4.00pm and 6.00pm. He said that he did not have to fill out any timesheets, but that he did have to provide a fingerprint at the start and end of each day. Advanced Computers said that this was not so much for timekeeping purposes but for performance appraisals when issues such as lateness could be raised with an employee. There was some dispute among the employer’s witnesses as to who was responsible for signing off Mr Shi’s timesheets. However, Mr Shi said he never filled in a timesheet, and Advanced Computers produced no timesheets to the Authority. Whoever was responsible for it, appears to have dropped the proverbial ball.
Advanced Computers produced a record of jobs performed by Mr Shi. The schedule stated the number of hours worked on a job, and the remuneration due. The Employment Relations Authority found that this was not a record of the hours worked by Mr Shi, but a record of individual jobs for which Advanced Computers on-charged its clients. When questioned about this, Advanced Computers confirmed that the technician quoted for the hours he/she thought it would take to do a job. If the job exceeded the time quoted, the technician was not paid for the ‘extra’ hours. So, if Mr Shi had quoted a repair time of one hour, but the job took three, he would not be paid for the ‘extra’ two hours.
The Authority stated that this practice appeared to be a breach of the Wages Protection Act 1983 which requires an employer to pay the whole of wages owing, without deduction. Mr Shi was entitled to be paid for the hours he actually worked (as opposed to the hours for which the company could charge the customer).
Mr Shi disputed his wages at the start of June, for the month of May. Following some less than fruitful discussions, Mr Shi decided to resign from Advanced Computers. He prepared a log of his hours of work between his start date of 28 April and his resignation on 13 June 2014.
The Authority found that Mr Shi’s records were to be preferred, as the company’s records were not records of time worked by Mr Shi, but time that would be charged to the customers.
Accordingly, the Authority found that Mr Shi had been paid for 52.33 hours, but had in fact worked for 242 (including lunch breaks). The Authority therefore awarded Mr Shi $2,590.05 gross for hours worked and not paid to him, together with holiday pay.
What lessons can we learn from this?
First and foremost, it is important for employers to ensure that a wage and time record is kept. This is a requirement of the Employment Relations Act 2000 (“Act”), and failure to maintain a record (and to keep it for 6 years) is punishable by way of a penalty. Furthermore, and as Advanced Computers discovered to its detriment, an employer’s failure to keep an accurate wage and time record means that if an employee makes a claim for unpaid wages, the Authority will assume that the employee’s claim of hours worked and pay received is correct, unless the employer can prove otherwise. In other words, the ‘default’ position becomes the employee’s claim.
Just as important are the contractual provisions. It is vital to make sure that the employment agreement correctly reflects the nature of the employment. In this case, Mr Shi clearly was not employed on a casual basis. Truly casual employment is ad hoc. It is not rostered or working consistent hours everyday as was the case with Mr Shi.
What should employers do?
Most employers keep some sort of record of who is working when, and what they are being paid. However, employers need to check that they are keeping accurate wage and time records, and that these record everything that is required by the Act – there is a fair bit of detail required. Note also that the Holidays Act 2003 requires employers to keep leave records, detailing annual leave, sick and bereavement leave, and public holidays worked, for each employee.
Employers should ensure that their employment agreements match the work arrangements and that if this does change over time, that the agreements are varied.