Stop the clock on wage theft!

Stop the clock on wage theft!

By Mike Treen, Unite National Director

(Reprinted from The Daily Blog)

It has become evident that the bosses of this country have been systematically defrauding workers over the payment of holiday entitlements under the law.

According to the government’s advisors own estimates up to a million dollars a day is being taken out of the pockets of workers unlawfully. 750,000 workers could be affected and up to $2.3 billion owed to workers.


Wendy's are a serial offender when calculating leave entitlements, including denying alternative holidays and correct annual leave payments.

The government’s response was to consider legalising the principle way the theft was engineered. It was only when it became clear that a move like that would be a political disaster that the Cabinet stopped progression of the proposal.

But under capitalist justice we are only allowed to ask for back pay for six years. That is why the CTU has asked the government to “Stop the Clock” and change the law to allow claims to go back as far as is necessary to fix the problem. If the six-year limitation is applied then every day the government fails to act is another million dollars taken out of workers pockets.

This should be a huge political priority – unless you are a government in the pocket of big business like this one.

Just this week Unite came across one more example of this theft.

McDonald’s worker Shontelle Kingston got a week’s annual leave paid out at 30 hours when it should have been 45.65 hours.

Shontelle had to take time off because of illness. She did not know if she had any enough sick leave available so asked to cash up a week’s annual leave which is her right under the law.
McDonald’s calculates and allocates annual leave in hours rather than days or weeks which makes it very difficult to comply with the law.

They should have paid her at the higher of her “ordinary weekly pay” or her average weekly pay. If a worker’s hours fluctuate significantly then the ordinary weekly pay should be calculated as an average of the last fours weeks pay.

We do not know how the company arrived at the 30-hour figure but it is certainly less than the 45.65 she averaged in the previous four weeks.

McDonald’s has acknowledged that their payroll system may not be compliant with the law and have appointed an external auditor to check.

But this case shows the importance of the government leading a process to ensure all employers and payroll providers are compliant with the law. This may take some time so it is important that the workers are not disadvantaged by the delay.

Unite Union supports the demand for the government to stop the clock on the six-year statute of limitations that exists for payroll theft.

But we have also come across a legal case that may allow claims going back longer than six years for holiday entitlement.

The chief judge of the Employment Court J Colgan ruled in a 1998 case that the entitlement to all unpaid holidays continues to the termination of someone’s employment and therefore must fall within the six-year limitation.

The government’s own officials estimate that workers could be losing a million dollars a day. All employers and payroll providers should be compelled not to destroy any records they hold.
This is highway robbery and should be stopped. Every penny owed should be paid back!

A CTU background doc on the issue is available here.
The Together open letter to the PM to “Stop the Clock” is here.
CTU Holiday Leave Protection Bill is here.