Health bodies fail to detect serious employment law breaches

18 April 2019

An Auckland pharmacy group penalised for underpaying employees by more than $255,000, has highlighted a hole in the auditing processes within the health sector when it comes to safeguarding the labour standards of employees.

The Employment Relations Authority has determined against seven pharmacies, resulting in penalties of nearly $92,500 between them for underpaying employees over $107,000. The pharmacies also paid employees a further $147,600 in arrears. This highlights a hole in the auditing processes in the health sector when it comes to safeguarding the labour standards of employees. Those pharmacies belonged to a consortium of companies formerly known as Nirvana Health Group.

The determination followed a 2017 Labour Inspectorate investigation which found 12 migrant trainee pharmacy technicians, on agreement from the Open Polytechnic to study and work at the pharmacies, received an equivalent hourly rate below the minimum wage.

“This determination found against seven pharmacies, all of which should have had their minimum employment standards firmly in place from the top down. It is disappointing to see pharmacies who are funded through Pharmac, District Health Boards, the Ministry of Health, and ACC failing to meet basic labour rights in such a serious way. This raises questions about the funding, quality management, and risk management systems in the sector,” says Labour Inspectorate National Manager, Stu Lumsden.

“We are calling on all large businesses and organisations to take another look at their quality management and risk management processes to make sure that labour rights considerations are being covered. Minimum employment standards are a legal requirement. Auditing for this compliance is in the best interests of a business’s overall sustainability and everyone involved in it,” Mr Lumsden says.

Employment Services has guidance for both employers and employees on employment rights and obligations. Anyone who has information about minimum standards not being met, are advised to phone 0800 20 90 20, where all concerns will be handled in a safe environment.

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