A Dunedin City Council-owned company breached employment law over its calculation of holiday pay, according to a Labour Inspectorate report.
However, the electricity network and environmental services contractor company will not be prosecuted. Instead, it will have to comply with an enforceable undertaking, which means that, among other things, it will have to make amends to the victims.
Delta Utilities came to the inspectorate's attention when two former employees laid complaints.
The company, solely owned by the Dunedin council’s holding company, operates as a multi-utility contractor across much of the South Island. In its most recent financial year, it had revenue of $122.6 million and a profit of $2.6m.
Delta Utilities is not the only company caught up with miscalculations: a range of firms, as well as government departments, have had to remedy breaches in recent years.
The report
Labour Inspectorate’s Bryce Harwood’s report, released to BusinessDesk under the Official Information Act, found Delta had multiple breaches all relating to the miscalculation of leave entitlements, which resulted in arrears for both employees.
The calculation of annual holidays taken in advance, payment if an employee did not work on a public holiday, payment for sick and bereavement leave and average daily pay were all incorrect, breaching the Employment Relations Act (ERA).
Harwood found the correct method was used to calculate average daily pay but the initial amount from calculating annual holiday pay was inaccurate.
During the investigation, Delta confirmed leave recorded during lockdown was special leave and therefore it reduced annual holiday pay.
But in four instances, Delta was not found to have breached employment law.
They were wages and time record, holiday and leave record, time and a half for working a public holiday and an alternative holiday given for working a public holiday.
The former employees, whose complaints related to their holiday and leave records, said their supervisor would often overwrite hours claimed, which altered their pay.
However, the inspectorate found Delta had sufficient records in place for that.
Harwood also found Delta had breached a collective agreement that did not include an employee protection provision.
Although Delta worked with the New Zealand trade union E Tū, it was an oversight by the employer and the union, the inspectorate said.
Enforceable
Because of the breaches of the ERA, Harwood determined Delta would need to agree to the process of an enforceable undertaking – an alternative to prosecution – which was signed at the end of August.
The scope of the undertaking would be limited to waged employees who work variable hours and whose pay varies within pay periods.
In the agreement, Delta will be expected to acknowledge the issues that led to the breach and to identify what it will do to benefit the workplace and how it will make amends to the victims.
Delta's liability
In its annual report, Delta noted the matter had been in dispute since Jan 2021.
It agreed to remedy identified errors in the company’s historical calculations of holiday pay, going back six years from the date of signing.
“The financial consequences of the remediation are not known; however, management and legal adviser estimates of the liability are that it will be less than $100,000.”
BusinessDesk has contacted Delta for comment.
