A Thai restaurant owner has been ordered to pay a former staff member more than $12,000 after using her annual leave to bump up her pay during the 2020 lockdown despite being paid the Covid-19 wage subsidy.
The Employment Relations Authority found the owner and sole director of Christchurch's Thai Orchid restaurant, Julian Stokes, unjustifiably dismissed his former front-of-house staff member after she took umbrage at the unusually low payments she began receiving.
The authority issued a plethora of payments including $2258.87 in seven weeks' adjusted lost wages and $5000 for hurt and humiliation at her experience.
Stokes was granted the Government's wage subsidy and despite paying her first week as entitled, for the remaining seven weeks he began paying the staff member 80 per cent of the wage subsidy and topping it up with the woman's annual leave - despite not having approval and later protestation.
He would later tell the authority he used the excess from the staff member's subsidy to top up more highly paid chefs in his team.
In May 2020, following the nationwide lockdown, Stokes told the staffer that due to business downturn by Covid-19 he couldn't employ her at the same number of hours she had previously worked and began a redundancy process while offering to continue to employ her at reduced hours.
She in turn asked for more hours, however Stokes declined and ended her employment after more than two years at the restaurant.
After initially working just 15 hours a week, that ultimately grew to around 36 after she was granted a work visa and she moved into a front-of-house position.
When the country went into level 4 lockdown, the woman understood that she would be paid 80 per cent of wages at her new reduced rate of 29 hours.
While Stokes paid the first weeks at 29 hours, he then paid her next four weeks' pay using entirely annual leave.
Stokes told the authority he had intended that 80 per cent of the 29 hours would be paid as ordinary time and the remainder would be taken from the staffer's leave entitlements.
However, in a staff meeting recorded by the woman when the country entered level 4, Stokes advises staff that the business has already applied for the wage subsidy, and should this be granted, he would pay the full amount to staff.
That wage subsidy was slightly higher than her normal weekly pay.
On May 8, 2020, [she] received her weekly pay calculated at 20 hours per week instead of the 29 hours she was expecting to receive.
She texted and emailed Stokes to query this and a week later again only received 20 hours' pay.
On May 16, he emailed her back referring to the business's "lack of economic profitability", saying that she had two options: move to a casual employment contract for 20 hours minimum or end her current contract with one weeks' notice at 29 hours.
The staff member sought advice and rejected the offers asking her to repay the outstanding monies and continue her at 29 hours to renegotiate at a later date.
Stokes replied rejecting her compromise and ended her employment.
For using her annual leave to subsidise her pay during the period, the authority did not find any contemporaneous record to show that was communicated to her or that she understood or agreed for that to happen.
"If Mr Stokes had intended to deduct 5.8 hours each week from [her] leave balance, the onus was on him to have clearly communicated this so as to achieve [staff member's] consent.
"For the last nine weeks of her employment, [she] should be paid at the rate of 29 hours ordinary time each week, as this is what was agreed between herself and Mr Stokes. No other alternative agreement was ever reached.
"An employer is not able to unilaterally vary the terms of an employment agreement and Mr Stokes' attempt to reduce [her] hours and pay without her agreement is not effective."
Despite the difficulties the restaurant was facing at the time, the authority found the staff member's dismissal unjustified.
The authority granted her seven weeks' lost wages at $2258.87 in lost wages plus $180.71 in annual leave entitlements and $5000 for hurt and humiliation.
Along with payments for short-paid wages, short-paid notice, and three unworked public holidays, the applicant was granted around $12,500 in total.
"The impacts on [staff member] of her dismissal were real, and need to be recognised."
The authority found that given the subsidy payments ran from March 26 to about June 16, Stokes had an obligation to "use best endeavours" to retain her job until that date.
"Instead, he terminated her employment on May 22, 2020, with her notice being paid up to May 29, 2020.
"It is at best unfortunate that Mr Stokes chose not to continue [her] employment for the short number of days, it would have taken to comply with the subsidy obligations."