Jeremy Croxford has worked for plumbing and bathroomware company Waterware for 25 years.
A manager who took care of the accounts for his cousins’ business pocketed $47,000 more in bonuses than he was meant to.
It wasn’t until the company hired a consultant to look at cashflow issues that they realised the mistake. But the money had already been spent.
Now Waterware Services Ltd (WSL) has taken former employee Jeremy Croxford to the Employment Relations Authority (ERA) to recover the money.
Croxford had also filed a claim, saying he was constructively dismissed from his role after he resigned following an investigation.
Croxford had been working for the bathroomware and plumbing company for 25 years and in 2012 was promoted to general manager. His cousins, Darren Yearsley and Lisa Scholtens, are the directors of WSL.
His role included financial management responsibilities for the Auckland business, including calculating and processing profit-share bonuses, maintaining payroll and leave records and ensuring PAYE and GST compliance.
As part of his salary, he was entitled to a bonus and Croxford and the directors were entitled to 5% of the net profit for each quarter.
Between 2012 and April 2020, Croxford said bonuses were calculated based on the profit figure at some point during the quarter but this changed in 2020, when the directors agreed the bonus calculation would be based on the profit figure at the end of each quarter.
Self-employed business consultant Annette Holzmann was engaged by the directors to assist with accounting and cashflow issues WSL was experiencing in June 2024.
Holzmann identified an issue with the timing of the bonus calculation. When Croxford was calculating the net profit figure for each quarter, some expenses that would reduce the profit had not been processed when the profit figure was determined.
According to a recently released ERA decision, Croxford’s profit calculations overstated the bonus payments he and the directors received.
Transactions processed after the date the profit figure was determined had not been factored into his calculations since April 2020 and Croxford and the directors were not aware of this issue.
Croxford’s profit bonus for the period April 2020 to March 2025 was $232,655. But recalculated, WSL said it should have been $185,392.
WSL relied on the profit figures showing in a Sybiz accounting system for each quarter and Croxford did not provide workings to explain why his profit figures were different to those recorded in the system.
“WSL says it made a mistake by relying on Mr Croxford’s profit figures, and overpaid bonuses to the directors as well as Mr Croxford,” authority member Simon Greening said.
Up until April 2020, Croxford’s bonus calculations were correct.
Croxford told the authority he received the bonus payments in good faith and had spent the money he received.
“The evidence does not support the conclusion that Mr Croxford deliberately misrepresented the financial situation to the directors. However, the bonus calculations provided by Mr Croxford to the directors, on which they relied in making payments, misrepresented the correct profit figure for each quarter,” Greening said.
“WSL made the bonus payments based on a mistake. The mistake arose because they relied on financial information they received from Mr Croxford which misrepresented the correct profit figures for each quarter.
“Therefore, Mr Croxford did not receive the bonus payments in good faith, and the equitable defence of change of position does not apply in Mr Croxford’s case. Mr Croxford is ordered to pay WSL the sum of $33,436 in respect of overpaid bonus payments.”
The authority also heard Croxford had received annual leave payments from WSL for 20 days, which he was not entitled to, as he had applied for the days but then cancelled at the last minute.
He had also spent $2000 on a work credit card on a new shirt for a work-related meeting, a Mole Map appointment and lunch, which he said was agreed to with WSL but was not the case.
Croxford was already making weekly payments towards an agreed debt of $25,072.10 to WSL.
Croxford claimed he had been constructively dismissed by WSL and said WSL “followed a course of conduct with the deliberate and dominant purpose of coercing him to resign”.
After a number of meetings and taking time off for sick leave, Croxford returned to work on May 8.
Four days later, WSL initiated a disciplinary process and invited Croxford to a meeting where concerns were raised regarding the company credit card, GST deductions on personal expenses, overpayment of bonuses, annual leave and failing to ensure compliance with financial, payroll and tax obligations.
On May 15, he responded in writing to the concerns and resigned.
The authority found WSL had engaged with Croxford about its concerns, over a three-month period, before it commenced a disciplinary process.
“WSL was justified in its decision to investigate reasonably serious allegations. Although Mr Croxford was very upset by this decision, it does not amount to a constructive dismissal.”
Croxford was ordered to pay WSL $47,263 in respect of overpaid bonus payments, $11,789.69 in overpaid annual leave entitlements and pay interest on the agreed debt and agreed bonus overpayment. Interest must be calculated and paid on the sum of $38,899, using the civil debt calculator.
Croxford declined to comment.
WSL technical director Darren Yearsley said given the family relationship involved “it has been a difficult matter for everyone concerned”.
“It would not be appropriate for us to comment further on the details.
“Our focus now is on moving forward and continuing to support our staff, customers and suppliers.”
Brianna McIlraith is a Queenstown-based reporter for Open Justice, covering courts in the lower South Island. She has been a journalist since 2018 and has had a strong interest in business and financial journalism.