ERA ruling: Bakery to fork out almost $12,000 after deductions from employee’s pay

A baker’s claims that his employer was stealing money from his paychecks and not allowing him proper breaks has resulted in the bakery being ordered to fork out almost $12,000 to pay for its “unjustified actions”.

Aaron Mitchell began working for Breads of Europe 2015 Limited in September 2018 but left two years later after issues arose over deductions to his paycheck.

Mitchell accused his former employer of breaching good faith and misleading conduct about payments as well as failing to be open and communicative. Now a recent Employment Relations Authority (ERA) decision has ruled in his favour.

However, the bakery’s director Brian Cook said he feels as though a “huge injustice” has taken place following the decision and he will be appealing against it.

“I’m annoyed with the whole thing ... I’ve bent over backwards to help Aaron.”

Cook claims loaning Mitchell money and assisting him with purchasing a car was one example of the “many” things he did to help his employee.

Mitchell’s lawyer Paul Mathews said the only unfairness in the outcome was that the ERA “somehow” determined that his client had not been unfairly dismissed.

“It found that the deductions were without basis. It found that there were other underpayments,” Mathews said.

“It even handed down a penalty for breach of good faith. Despite all of this, it seems the employee is meant to carry on working for a deceptive employer who has been caught out.”

In the decision, Mitchell said deductions were taken from his paycheck in increasing amounts without proper explanation and he was unable to take meal breaks but was instructed to record breaks on his timesheets.

During late February or early March 2020, Mitchell and Cook met to discuss overpayments.

Cook informed Mitchell that the payroll system, which was run by Cook’s ex-wife, had overpaid him as well as other staff members in wages and KiwiSaver.

Cook provided to the ERA a consent form for deductions to repay an overpayment of $5380, which was signed by Mitchell.

However, Mitchell said he wouldn’t have agreed to sign a form for that amount of money without first talking to his partner.

Mitchell’s partner wasn’t allowed to attend the meeting, something ERA member Helen Doyle said was “unfortunate”.

The ERA found that Mitchell did not properly consent to deductions from his pay as he remained “unclear” about the basis of the deductions and what was being deducted each week.

In October 2020, four weeks before Mitchell resigned, he had an “upsetting” interaction with Cook and did not return to work during that time as he sought legal advice.

It was then discovered that 175 hours of Mitchell’s pay had been deducted without his knowledge, something his lawyer Paul Mathews said has caused him and his partner “tremendous stress and financial strain” in an email to Cook’s lawyer Robert Thompson.

Thompson responded by saying that Cook would not make any further deductions until the matter was resolved and Mitchell could return to work.

Cook told NZME that he and his ex-wife had filed evidence to the ERA which was “dismissed for some reason”.

However, the ERA ruled that the bakery deducted greater amounts from Mitchell’s wages than he had consented to and was therefore unreasonable, which breached the Wages Protection Act.

Breads of Europe was ordered to pay Mitchell a total of $8884 as compensation for “unjustified disadvantage”, reimbursement for lost wages, and deductions to wages.

The Christchurch bakery was also ordered to pay $3000 to the Crown as a penalty.

Cook will be appealing against the decision but said if he is ordered to make the payments, he will.