A recent New Zealand Employment Court decision has held that where an employer conducted unpaid meetings with its sales employees before their rostered hours of work/store opening hours, that it was required to pay them to attend these. This was because the pre-work meetings were considered to be ‘work’ and they were entitled to be paid their hourly rate for this work. Further, the commission and incentive payments they received could not be used to cover payment for this time.
The Employer in this case was a retailer, Smith’s City, who conducted a short 15 minute unpaid meeting with its sales staff who were paid by the hour, every morning before the shop opened. The meetings were work related and the employer’s purpose was to provide sales staff with information so they could be more effective in making sales. Attendance by the sales staff at the meeting was expected, but the staff were not paid for their attendance and no wage or time records were kept by Smiths City, as required under New Zealand law, for the time attended (worked).
The Employment Court considered whether the daily morning meetings constituted ‘work’ for the purposes of the New Zealand Minimum Wage Act 1983 (“the Act’) and if so whether the sales staff’s commission and incentive payments covered payment for the pre-work meetings, in order to comply with the Act. In doing so, the Court applied factual tests decided by previous case law and held in this case that the pre-work meetings were an integral part of each attending sales person’s principal work, that the employees were constrained by the expectation to attend them, that they had the responsibility of sitting and listening to work-related information and that Smith’s City had the benefit of the meetings in that it had a cost free opportunity to prepare its staff for the working day.
Further, as the commission and incentive payments to these employees were not earned for attendance at the pre-work meetings, nor connected to the hourly rate of pay, Smith’s City could not use those payments to offset payment for attendance at the meetings. Smith’s City were found to have been in breach of the Act by not paying those employees to attend.
The upshot of this case is that New Zealand employers will have to carefully consider whether any hourly paid employees are doing any unpaid activities outside their working hours which could be construed as ‘work’ for which they would be required to be paid, and if so, make sure payment is made to ensure compliance with the Minimum Wage Act.