Hotel worker's Covid layoff and two-year debt trap ordeal finally almost over as payout ordered

The ERA said hotels such as the Grand Millennium faced an unprecedented situation and great pressure with Covid, but workers still should be properly consulted about layoffs. Photo / William Terite

A worker unfairly sacked from her hotel job during the pandemic says she spiralled into a miserable debt trap for two years.

Now, she is among a dozen employees awarded $20,000 each after a dispute went to the Employment Relations Authority.

The Hospitality Services Ltd (HSL) employees worked in the Bay of Islands, Auckland, Rotorua and Greymouth. One was a company veteran of 30 years.

HSL's holding company is Millennium & Copthorne Hotels New Zealand. In response to the pandemic and 2020 lockdown, the company made more than 900 positions redundant.

Unite union said most of those laid off were not union members.

And it said penalties imposed on the company last week showed Covid-19 was no excuse for disregarding employment law.

Candice* said she was a food and beverage attendant at an Auckland hotel when the pandemic arrived in 2020.

"Initially when they had just found out Covid was circulating, they rushed to hand out all these letters to people," she told the Business Herald.

"I was so panicked. Honestly, I was thinking: What am I going to tell my landlord? It was a really stressful time for me and it came out of the blue as well."

She added: "When I received the email saying you've been selected to be made redundant, I was thinking: Where has this come from? You haven't contacted me."

Candice, now aged 23, said the layoffs left her scrambling for money and unemployed for about two months.

"I had to use all my resources. I haven't been able to get out of the loop of paying my debt off."

To cover living costs, she said she topped up a personal loan, depleted her savings, and got a credit card and bigger overdrafts. She racked up thousands of dollars in debt.

The ERA found in the workers' favour in July but only confirmed the payout last week, after the hotel company and union discussed financial remedies.

Candice said the $20,000 compensation would finally help her pay off debt and start saving again.

The workers will also receive $1,000 each after the company was penalised $12,000 for Employment Relations Act and Collective Employment Agreement breaches.

Candice said the penalty would send a message to employers who did not correctly follow procedure around redundancies.

"It will be a well-served lesson for them."

A lawyer who represented HSL was unavailable to discuss the case today.

However, the company and Unite already reached an agreement that HSL would pay the applicants $20,000 each and a penalty of $12,000.

"HSL did not set out to reap for itself some benefit or advantage by ignoring statutory and contractual obligations," ERA member Alastair Dumbleton said.

"The grievances and breaches arose from an unprecedented situation placing great pressure on HSL to act swiftly in protecting its business interests," he added.

And HSL had tried to act fairly and reasonably to protect workers' statutory and contractual rights, he added.

Dumbleton said the employment relationship problem arose from the level of communication HSL had with Unite and affected union members.

Another problem was the level of participation HSL allowed employees to have in processes when deciding positions for redundancy, he said.

The workers and Unite said they did not know, and were not told, why positions were proposed for redundancy.

And workers said they weren't told why they as individuals were selected for redundancy.

The upshot, the workers argued, was they were given insufficient information to respond to the redundancy proposal in any meaningful way.

Dumbleton said employees received notice of termination by letter dated either April 15 or May 1 in 2020.

The ERA said the termination date was a fortnight in one case, and about 10 weeks in other cases.

Unite national secretary John Crocker today said the compensation order was significant and would bring relief to the unfairly sacked workers.

However, the ERA decision also reaffirmed laws already established.

"This was just a gross breach of good faith."

He said the ruling also established that emergency pandemic measures could not be used to override employment law.

Crocker said the compensation figure was reached after negotiations with the company.

"The workers felt they would be happier if they all received the same amount, as long as it was a fair amount."

*The worker requested her name be withheld to protect her current job.