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Rebecca Quilliam

Rebecca Quilliam is senior reporter at the NZME. News Service office in Wellington.

Telecom ordered to pay bonuses to former workers

Telecom will be changing its name to Spark on August 8 Photo / Dean Purcell
Telecom will be changing its name to Spark on August 8 Photo / Dean Purcell

Telecom has been ordered to pay thousands of dollars to former workers who were paid lower bonuses after the company retrospectively increased sales targets.

Gregory Allott and Aaron White took their case to the Employment Relations Authority, which ruled the telecommunications company had not acted as a fair and reasonable employer.

Mr Allott said he was out of pocket by more than $41,000 and Mr White by more than $30,000.

Telecom told the authority it was entitled to increase targets retrospectively because a provision on its employment contracts allowed it.

The contract said the company had a right to amend targets for a number of reasons, including if the target achievement rate fell below 85 per cent or was above 200 per cent.

Both Mr Allott and Mr White exceeded their targets during 2012.

In August 2012, Head of Sales Business Richard Brown sent out an email telling sales managers the sales target had increased by 33 per cent for that financial year, which finished on June 30, 2012.

The authority said that gave the employees no chance to meet the new target.

In his email, Mr Brown told employees the target increase was because the level of sales had not been forecast.

He wrote that the sales incentive plan (SIP) allowed for targets to be reviewed where achievement was over 150 per cent.

However, the plan actually said targets could be retrospectively reviewed where they were exceeded by 200 per cent.

"I accept that this may have been an error on Mr Brown's part but it was an unfortunate one considering that the email was the only written approval for a retrospective change to the target and was read by those affected including Mr Allott [and Mr White], authority member Helen Doyle said.

"It was an unjustified action to retrospectively amend targets after the end of the life of the material SIP. It is not what a fair and reasonable employer could have done in all the circumstances at the time."

She also found Telecom discounted some of the employees' business claims unfairly.

Telecom was ordered to pay Mr Allott $52,561.37 in lost remuneration, holiday pay and compensation.

There was a dispute over the final amount of reimbursement for Mr White and a decision would be made in about a week after interested parties were spoken to.

Mr White was not able to raise a personal grievance claim for compensation because he filed his application outside of the three month cut off date.

- APNZ

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