| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Auckland |
| Reference No | [2012] NZERA Auckland 386 |
| Hearing date | 31 Jan 2012 |
| Determination date | 26 October 2012 |
| Member | R Larmer |
| Representation | E Hartdegen ; S Hornsby-Geluk |
| Location | Auckland |
| Parties | Thompson v 88 C-Force Textile Industries Ltd |
| Summary | ARREARS OF WAGES AND HOLIDAY PAY – DISPUTE - Applicant sought arrears of wages and holiday pay and interest – Parties disputed interpretation, application or operation of employment agreement (“EA”) clause setting out applicant’s bonus entitlement – Authority found applicant’s claim better treated as dispute claim – Found EA clause did not clearly state whether applicant’s bonus entitlement based on personal sales or respondent’s total sales – Found reasonable person would conclude no changes to practice applicant’s bonus entitlement calculated based on respondent’s total sales, not applicant’s personal sales, after parties signed new EA – Found applicant’s failure to pursue claim until after employment ended did not estop applicant from pursuing claim later - Respondent to pay applicant $185,144 arrears of wages - Applicant entitled to holiday pay on amount, parties to determine quantum – Found not equitable to award applicant interest on amounts outstanding as applicant could have made claim earlier – Question answered in favour of applicant - Sales and Marketing Manager |
| Abstract | Applicant employed as general manager. Applicant sought arrears of wages, holiday pay and interest. Applicant claimed respondent failed to pay applicant $201,751 bonus in accordance with parties’ employment agreement (“EA”). Applicant claimed alternatively parties disputed interpretation, application or operation of EA clause setting out applicant’s bonus entitlement. Respondent denied arrears outstanding and even if were arrears outstanding claimed applicant estopped from any recovery as failed to query matter when did not receive bonus payment. Respondent counterclaimed for $266,001 bonus entitlement incorrectly paid to applicant as respondent incorrectly calculated applicant’s bonus entitlement based on respondent’s, not applicant’s, total sales. EA did not state whether applicant’s bonus entitlement based on applicant’s personal sales or respondent’s total sales. Applicant previously employed as sales manager and paid bonus based respondent’s total sales. Respondent director (“Z”) agreed when applicant appointed general manager applicant’s bonus entitlement continued to be based on respondent’s total sales. Z acknowledged applicant received benefit of sales general by other employees of respondent and applicant did not contribute towards these sales. Applicant’s remuneration renegotiated and applicant’s role changed to sales and marketing manager and bonus entitlement increased. Parties disputed whether increased bonus entitlement continued to apply to respondent’s total sales. Parties signed new EA. Z claimed did not check terms of new EA. Z claimed unaware applicant paid subsequent bonus for three year period based on respondent’s total sales. Applicant’s bonus payments stopped by respondent. Respondent claimed applicant’s bonus calculated on annual not monthly basis.;AUTHORITY FOUND –;ARREARS OF WAGES AND HOLIDAY PAY – DISPUTE: Applicant’s claimed better treated as dispute claim. EA clause did not clearly state whether applicant’s bonus entitlement based on personal sales or respondent’s total sales. Parties' history showed respondent happy to reward applicant via bonus entitlement for sales had nothing to do with. Respondent authorised accountant to design new bonus structure as respondent no longer wanted to pay applicant bonus based on respondent’s total sales. If Z believed applicant had been overpaid three years of bonus payments by mistake unlikely would not take any steps to address matter. New EA clause required applicant’s bonus to be paid on basis of respondent’s total sales. Reasonable person would have expressly recorded change to way applicant’s bonus entitlement calculated. Reasonable person would conclude therefore no changes to practice applicant’s bonus entitlement calculated based on respondent’s total sales. Applicant not entitled to be paid bonus on monthly pro rata basis. Applicant’s failure to pursue claim until after employment ended did not stop applicant from pursuing claim later. Respondent to pay applicant $185,144 arrears of wages. Applicant entitled to holiday pay on amount, parties to determine quantum. Not equitable to award applicant interest on amounts outstanding as applicant could have made claim earlier. Question answered in favour of applicant. |
| Result | Question answered in favour or applicant ; Arrears of wages ($185,144.72) ; Arrears of holiday pay (parties to determine quantum) ; Costs reserved |
| Main Category | Arrears |
| Statutes | ERA s4;ERA s129;ERA Second Schedule;Holidays Act 2003;Judicature Act 1908 s87(3) |
| Cases Cited | Boat Park Ltd v Hutchinson [1999] 2 NZLR 74;Dwyer v Air New Zealand Ltd (No 2) [1996] 2 ERNZ 435;Graham v Crestline Pty Ltd [2006] ERNZ 848;Investors Compensation Scheme Ltd v West Bromwich Building Society [1997] UKHL 28;New Zealand Building Trades Union v Ebert Bros Construction Ltd [1991] 3 ERNZ 1004;Vector Gas Ltd v Bay of Plenty Energy Ltd [2012] NZSC 5;Wellington City Corporation v Rodd [1919] NZLR 595 |
| Number of Pages | 19 |
| PDF File Link: | 2012_NZERA_Auckland_386.pdf [pdf 287 KB] |