A Labour Inspector v Star Nelson Holdings Limited [2022] – Managing Employee Records

A recent case of the Employment Relations Authority reinforces the obligation on Employers to maintain accurate records on all Employees.

An Employee of Star Nelson had raised a concern with the Labour Inspectorate (a division of the Ministry of Business Innovation and Employment – MBIE) about their employment agreement and holiday pay. The Labour Inspector, within their powers under the Employment Relations Act 2000, contacted the sole director of Star Nelson to request a full employee list, including names, roles, employment status, start dates and confirmation of the legal entity of the employer. The Labour Inspector advised that they would then select five employees from this list and request more specific records on each.

Although a business is required to maintain accurate records on all staff, including retaining these for a period of not less than six (6) years, Star Nelson was either unwilling or unable to provide this information.

After several attempts to obtain the information from Star Nelson, the Labour Inspector referred the matter to the ERA pursuant to s229 of the ERA 2000, seeking penalties to be awarded against Star Nelson for non-compliance in responding to the request for information.

The ERA was satisfied that Star Nelson had been provided with sufficient opportunity to provide the information requested by the Inspector and that they had failure to do so. As a result of this failure, the ERA imposed penalties of $7,500 against each of the two legal entities that comprised Star Nelson Holdings Limited (Star Moving and Star Nelson).

Pursuant to the legislative provisions, Employers must retain as a minimum, for a period of not less than six (6) years, the following information:

·         The employee’s signed employment agreement

·         Any other information regarding the employee usually contained on the employee’s personal file

·         A full wage and time records (wages paid and hours / days worked)

·         All annual leave records

While Labour Inspectors have statutory powers to request disclosure of this information, they may not be the only party seeking this information.

Increasingly within personal grievance claims, we are finding that the employee representative is also seeking disclosure of a full copy of the employees personal file – which may also include full disclosure of all wage, time and leave records. While the Labour Inspector’s request is motivated by a desire to assess legislative compliance, the employee representative’s request is generally motivated by a desire to seek fault with the employers’ processes in order to enhance a future grievance claim or to check the robustness of a current employment matter.

A Labour Inspectors request will generally be set out within a formal document pursuant to s229 of the Act, however as the Employee Representative Acts outside of these provisions, and to ensure all privacy obligations are retained, no information should be disclosed to the Employee Representative where the request is not supported by a signed declaration from the Employee authorizing the disclosure request and confirming that the Representative has the authority to Act for them.

If you receive a request of disclosure from either a Labour Inspector or an Authorized Agent, and are a little uncertain as to what should be disclosed or not, please feel free to contact us prior to responding. Many employers in this situation have often engaged us to review the information prior to this being provided to the requesting party to ensure that this is complete and does not contain information that may create potential liability.


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