Medicinal cannabis company Kariki Pharma Ltd must pay a former worker $240,000. Photo / NZME
Medicinal cannabis company Kariki Pharma Ltd must pay a former worker $240,000. Photo / NZME
A medicinal cannabis company did not pay one of its employees for two years and then accused him of using the business as a “front” to acquire a New Zealand visa.
Lopez, a United States citizen with a science background, and his family moved to New Zealand from Vietnam after he was hired as KPL’s chief technical officer in 2019.
However, during the first four months of starting the new role, his salary came late and then from June 2020, it stopped entirely.
Today, Lopez told NZME he has not received the ordered payment from KPL or had any communication from them.
“I hope that they will do the right thing, make the payments as ordered and allow me and my family to move on.”
According to the ERA decision, because Lopez believed in the business and the potential for bringing a variety of medicinal cannabis products to the New Zealand market, he agreed to accept shares in the company as payment for his overdue salary.
He also invested about $140,000 into the company and persuaded relatives to invest.
But by late 2021, he was concerned by his overdue salary and failure to negotiate alternative solutions. KPL’s board had suggested other employment agreements, such as minimum wage, which he rejected.
Throughout his employment, the company continued to hunt for an investor and believed they had found one but in July 2022 that person died unexpectedly.
That same month, Lopez resigned and went on to lodge a claim with the ERA.
During the investigation, he told the authority he had found the situation very stressful and it was personally and professionally humiliating to have been put in that position.
Conversely, KPL submitted Lopez agreed to have his salary deferred and that by working without pay he had effectively agreed to it.
One of the four directors, Andrew Steadson, described Lopez as being “inside the tent” and that he stood to personally benefit from KPL’s eventual success as he had shares in the company.
Other directors gave evidence that they were aware Lopez was not being paid but believed he had agreed the company would settle the bill at a later date.
It was also submitted on behalf of KPL that Lopez was wealthy and did not need to receive his agreed salary, and that he had effectively got what he wanted from the company which was a visa for him and his family.
Kariki Pharma Limited is a medicinal cannabis research company. Photo / KPL
Lopez strongly rejected this accusation and said he believed in the business, so much so that he had personally invested money in the hope it would succeed.
After considering the evidence, ERA member Claire English found a “fundamental problem” with KPL’s position because its directors could not point to any firm agreement stating Lopez allowed his salary to be deferred.
“KPL and the directors accept that there is nothing in writing, either formally or informally, that expressly sets out such an agreement,” English said in the decision.
“In short, there is no evidence that KPL and its directors entered into an agreement with Mr Lopez that Mr Lopez would defer payment of salary until a certain amount of capital funding was received …
“It follows from this that Mr Lopez’s salary remains outstanding.”
English found Lopez was unjustifiably disadvantaged and unjustifiably dismissed.
KPL was ordered to pay him $193,153 for unpaid wages, $13,721 in holiday pay, $5936.26 for KiwiSaver contributions and $20,000 for hurt and humiliation.
It was also ordered to pay a penalty of $10,000, of which $7500 was to be paid to Lopez.
English ruled that if the company could not pay then the directors were personally liable.
Lopez told NZME he was grateful to the ERA and support systems in New Zealand that help workers like him.
“I stayed as long as I did because there were, by then, very few options for me to do otherwise.
“I am not currently working in the industry and we wish to put this chapter of our lives behind us, once and for all.”
KPL’s former CEO Steve Wilson told NZME that he had lodged a similar claim against the company alleging that he was also not paid for almost two years.
Because Wilson was on a professional services contract he could not claim with the ERA and has instead lodged a claim with the company.
KPL declined to comment.
Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.
