A Rotorua restaurant has been fined for breaching a deal with a Labour Inspector where they were ordered to pay more than $28,000.

The agreement, made on June 19, 2018, required Vishnu Hospitality Limited, which trades as Lovely India Restaurant, to pay arrears of minimum wage entitlements totalling $28,273.32 (gross) in monthly instalments to the Labour Inspector for the benefit of Lovelesh Nanda, a former manager of VHL's restaurant in Rotorua.

Instalments in winter months were to be $1000 and in summer months $2000.

The agreement stated in the event of "default of any payment due … for seven days, the balance becomes due and owing".

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Labour Inspector Clare Lyons-Montgomery sought orders with the Employment Relations Authority (ERA) on the grounds that VHL - who had made four payments - paid only a net amount each month and not the gross amount agreed.

The authority said it was unfortunate VHL took a position in breach of clear terms of its settlement agreement particularly because in doing so it forfeited the benefit of a very generous instalment payment plan agreed by the Inspector.

That plan had allowed VHL's payments to be spread out over the period from August 1, 2018 to March 2020 without incurring interest.

The authority said VHL was not in a position of authority to unilaterally decide it could impose an interpretation of tax legislation on the terms of a settlement agreement.

VHL was fined $2000 and ordered to pay the balance due of $24,273.32 within 28 days.