Son loses ERA battle against dad

Michael Orr set up fish bait company called Magic Bait and said his father then took over ownership of the business. Photo / Glenn Jeffrey

A son has lost a legal battle against his father who he claimed took over his business and withheld his wages for almost four years.

Michael Orr, who opened the fish bait company Magic Bait, had accused his father Raymond Orr of taking over ownership of the business when he began accounting work for his son.

Mr Orr junior also claimed his dad withheld his wages from him but it has been found both men went unpaid because the company was not successful enough.

The Employment Relations Authority ruled in Mr Orr senior's favour, finding it was always his son's business and the father had simply volunteered to help out.

Mr Orr junior was not paid during the four-year period between 2006 and 2010 because the company "was not successful enough to pay them," ERA member James Crichton said in his findings released today.

The pair began working together in 2005 when, at the suggestion of his mother, Mr Orr junior agreed his father would help him run Magic Bait by managing the finances so he could concentrate on building up the business.

During the transition he provided his father with all of the financial information and administrative records, including bank statements.

Mr Orr senior opened new bank accounts for the business and registered a new GST number "to enable the business to make a fresh start".

However, the working relationship began to break down and in April 2009 Mr Orr junior took back control of the records and opened a new bank account.

He later employed accountants and spoke to the Inland Revenue Department, which suggested to him his father was the owner of the business and subsequently owed him wages, the finding said.

Mr Crichton found Mr Orr senior was never his son's employer.

"While he was in charge of managing the finances, he did so as a volunteer and never took over ownership of the business," Mr Crichton said.

The ERA ruled the decision to change the bank accounts and GST number reflected the change in financial management, not ownership.

"The reason Mr Michael Orr never received any wages during the period in question was because the business was not successful enough to pay them, not because his father was somehow holding back money which Mr Michael Orr was entitled to,'' Mr Crichton said.

All the evidence showed Mr Orr junior "was persuaded to allow his father to assist him in the administrative requirements of the business and for whatever reason, those arrangements did not meet Mr Michael Orr's requirements".