The retail and hospitality sectors need to prepare for changes coming as to what is deemed as paid and unpaid work for staff, says an employment lawyer.

Sherridan Cook, partner at Buddle Findlay, said fallout from an Employment Court case that forced electronics retailer Smiths City to back pay its staff for attending daily meetings before their shifts began, would have "far-reaching" ramifications.

More than 500 retail workers have complained to First Union about pay practices in the wake of the Smiths City decision. First Union has so far received complaints about Briscoe Group, Cotton On Group and Harvey Norman.

The Herald has approached Harvey Norman and Cotton On Group for comment.


In a statement Briscoe Group said it had always been its intention to pay its staff correctly.

"All stores have confirmed that those employees attending morning meetings are paid to be there," the statement said.

"With respect to cash up at the end of the day, an initial audit of all stores has confirmed that some stores have failed to correctly roster some staff required for this task. We believe this has affected a modest number of employees.

"This is our error and we are now in the process of rectifying it - staff who have been affected by this will be fully reimbursed."

Cook said he expected to see many retailers and hospitality companies come under fire for only paying staff on hourly wages for "contact time" with customers.

"Employees are not necessarily being paid for the non-contact time," Cook said.

Examples included meetings before work in the retail sector, cafe workers expected to cash up at the end of a shift or a gym class instructor paid for the hour but who gets to work early to set up the class, he said.

"This will go beyond the retail sector, and employers will need to look at whether their employees are doing work for them and whether they are being paid for that."

Employers would likely be safe against staff on salaries as individual employment contracts usually outlined overtime was not paid, he said.

First Union retail, finance and commerce secretary Tali Williams this morning told the Herald that it had received 500 or so responses since it had released a survey on Monday asking workers about whether they were asked to come in for meetings before or after work which were unpaid.

"The nature of a lot of the complaints is either meetings at the start of the day, or at the end of the day staying behind to clean."

The union was now trying to figure out which retailers were the worst culprits, she said.

Williams said she imagined a lot of retailers would already be responding to the Smiths City decision.

"But that doesn't mean they get off what has happened for the last six or seven years."

Cook said the definition of work was not defined in any employment legislation in New Zealand but the Court had given further guidance on employee "constraints, responsibilities and benefits".

"The full Court and Smiths City decision has gone beyond that and has relied on US [definitions] to provide another test which is relating to whether the tasks they are doing are integral to the employee's principal work," he said.

"That's not an easy answer in many cases."

Wages claims can go back six years, so fallout from the Smiths City decision could be have a significant financial impact for many businesses, Cook said.

Employment lawyer Max Whitehead told Newstalk ZB's Mike Hosking that workers might have a case if their employer had demanded they came into work before or after a shift.

But he said there was often a blurred line between casually catching up with your boss before work, common with small businesses, and a formal meeting.

"The boss will come up and have a chat 'how did it go yesterday, what happened at so and so's property, did you get that finished yet? oh great' and it evolves and it becomes a bit of a meeting."