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.