Smiths City shares fall 4.6% after Employment Court orders retailer pay staff for unpaid meetings
By Paul McBeth
May 11 (BusinessDesk) - Smiths City Group shares fell 4.6 percent after the retailer was ordered to pay staff for their attendance at 'voluntary' sales meetings over the past six years.
The Employment Court today ruled against the Christchurch-based retail chain, which objected to a Labour Inspectorate notice two years ago that by not paying staff who attended pre-work meetings it failed to meet minimum wage obligations, the Ministry for Business, Innovation and Employment said in a statement. Smiths City was initially successful in the Employment Relations Authority, but that ruling was reversed by the court which took the view the meetings were work and employees needed to be paid.
"As the Employment Court’s decision today reiterates if the activity is integral to the employees’ role, and there is expectation to attend – this is work, and employees should be paid for it," Labour Inspectorate regional manager Loua Ward said. "Employers should not pass the cost of doing business onto their employees. Employees must be paid for all the work they do, and this includes handover times, briefings, and in some situations, the travel time to and from a work site."
The decision comes a month after Smiths City issued a profit warning, saying a write-down in the value of several unprofitable stores will push it into the red this year as its Auckland stores struggle to gain traction with customers unfamiliar with the brand.
The shares dropped 2 cents to 42 cents, matching the six-year low the stock fell to earlier this month and valuing the company at $22.1 million.
The company today said it accepted the decision by the court while maintaining its view that the meetings were voluntary and merely to help staff with their work, and has moved the meetings into normal employee hours.
"We are complying with the Employment Court order that we conduct an audit to identify where wages have been paid below the statutory minimum," chief executive Roy Campbell said. "The audit is covering all current and previous employees for the last six years. We will calculate the arrears of pay below the minimum wage and reimburse any affected employees accordingly."