Sandhu v Gate Gourmet New Zealand Ltd is the first Employment Court decision post-Covid-19.

Gate Gourmet are an inflight catering company who provided an essential service during the Covid-19 lockdown. Employees were told they would be paid 80% of their normal wage (minimum wage at $17.70 per hour). During this time the minimum wage increased to $18.90. Gate Gourmet believed that only those employees that were working during lockdown were entitled to this increase.

The case was originally heard in the Employment Relations Authority (ERA) where it was found that if an employee is ready, willing and able to work they are entitled to be paid at least the minimum wage when providing an essential service. By not paying its employees the increased minimum wage Gate Gourmet had breached the Minimum Wage Act 1983 (“The Act”).

This decision was appealed, and the appeal was heard at the Employment Court in Auckland on 13 October 2020 with the decision being made available just prior to Christmas.

Gate Gourmet believed that being ready, willing and able to work was not the same thing as ‘working’. Therefore section 6 of the Act could not apply to the employees at that time so they had not breached the Act. Essentially, their argument was that they had no obligation to pay the minimum wage as the employees were not performing work.

The majority decision in the Employment Court was that the employees were not working for the purposes of section 6. They were at home and no work was being performed. As such, the Act did not apply to them which meant that they were not entitled to be paid the minimum wage.

Chief Judge Christina Inglis did not agree with this approach and dissented from the majority. It is her opinion that the above approach ignores the common law rule that where an employer cancels the shift of an employee who is ready, willing and able to work the employee is still entitled to payment of their wages.

Example

A shift of ‘work’ between the hours of 8:30am to 5:00pm is agreed upon by an employer and employee. The employee is ready, willing and able to work that shift. A pandemic breaks out and the employer closes their premises. The employee is no longer required to work even though they were ready, willing and able to. It is by no fault of the employee that they could not perform the work. They are entitled to payment of the minimum wage under the Act.

The result of this decision is that the employees were not entitled to be paid the minimum wage as they were found not to be ‘working’ for the purposes of the Act. This is a decision that is favourable for employers and not favourable for employees. It will be interesting to see whether this decision is applied in the future to a wider range of cases or whether it will be a decision specifically applied to Covid-19 cases.

If you are uncertain whether or not you were being paid correctly or paying your employees correctly in such circumstances, get in touch with our employment specialists who will be happy to give you advice.

Laura Hood

Laura Hood

DD: 04 576 1417 | Email: laura@collinsmay.co.nz