A Labour Inspector v Sld Agriculture Limited & Scott Donaldson

An investigation by the Labour Inspector has found that SLD Agriculture Limited, a farming company, failed to pay two of its employees the minimum wage for all of the hours they worked, failed to pay the correct holiday pay entitlements, and failed to provide employment records when requested. The Labour Inspector is seeking wage arrears for the minimum entitlements and penalties for the breaches. The company has been placed into liquidation, so the Labour Inspector can no longer proceed with the claim against SLD Agriculture, but the claim can still proceed against the director and shareholder, Scott Donaldson.

The Labour Inspector's investigation also found that the two employees, Petrus Grobbelaar and Riana Grobbelaar, were not employed by SLD Agriculture, but by a different company, West Coast Milk Limited. The Authority's investigation sought to determine the identity of the employer of Mr. and Mrs. Grobbelaar as a preliminary issue. The investigation received written evidence, held an investigation meeting, and assessed the oral and written submissions of the parties' representatives. Ultimately, it was determined that SLD Agriculture was the employer of Mr. and Mrs. Grobbelaar and that the company had failed to pay minimum entitlements to the employees.

The starting point for identifying the employer is to use section 6 of the Employment Relations Act 2000, which defines an employee. The issues that the Authority had to address were the intentions of the parties as to who the employer is, and how the relationship operated in practice, assessing how the work was carried out and applying the control test and integration tests to establish if the employer was different from what was first intended.

In conclusion, it was determined that SLD Agriculture Limited was the employer of Mr. and Mrs. Grobbelaar, and the company failed to pay minimum entitlements to the employees. The claim against the company can no longer proceed as it has been placed into liquidation, but the claim can still proceed against the director and shareholder, Scott Donaldson. New Zealand allows directors to be held responsible for company debt in some circumstances. Such circumstances include situations in which a director has knowingly incurred debt while the company is insolvent.