Spring’s Junction Café Fined A Second Time For Employment Breaches

Spring’s Junction Café and Motor Inn based in Christchurch, and its director, must pay $36,000 in penalties after breaching multiple minimum employment standards during the pandemic in 2020. The firm was penalised for similar offences in 2016.

Simon Humphries, Head of Compliance & Enforcement, Labour Inspectorate, said the latest penalties imposed on Springs Junction Café and Motor Inn Ltd, should serve as a warning to other businesses considering taking advantage of vulnerable workers.

The Employment Relations Authority found Springs Junction Café and Motor Inn Ltd, and its director Jerry Hohneck, had been involved in 22 breaches of employment standards by failing to pay an employee minimum wage including holiday pay and for inadequate recordkeeping. The employee had been told by Hohneck to stop recording the hours they worked.

The Labour Inspectorate found there had been no written agreement about a reduction of hours the employee could work and that payments made to the employee suggested the wage subsidy was simply passed on to the employee.

The Employment Relations Authority said a deliberate failure to pay an employee wage for work carried out “is exploitation and is serious”.

“Employers may find that workers who are in a vulnerable situation will agree to working conditions that are less than required by law, but this never excuses exploitation,” Humphries said.

“Accurate record keeping is a fundamental requirement of all employers and any decision to stop keeping records is inexcusable,”

The Inspectorate believes it is important for the public to be aware of cases like this where employers knowingly exploit workers who in many cases are vulnerable migrants,” Humphries said.

Penalties

• The penalties are $24,000 for the business and $12,000 for the Director Jerry Hohneck.
• The employee is to be paid $10,800 of the penalties while the business and Hohneck paid the former employee $33,165 in wages arrears.

In a similar case in 2016, Springs Junction Café and Motor Inn Ltd, which previously traded as Alpine Motor Inn and Café, was also penalised for breaching minimum employment standards.

In that case, the business was ordered to pay a former employee $6,292.80 in arrears of wages and was penalised a further $7,500, $5,000 of which was to go to the former employee on the basis that she was a worker in a vulnerable situation.

The Employment Relations Authority found that the business had not paid the employee for work she had done, claiming instead that she had been a “volunteer”. It was also claimed the employee, who at the time was in the country on a student visa, worked in return for accommodation and food while she was waiting for a full work visa.

The fact that in both cases there was a payment to the complainant is further recognition of the breaches and should act to encourage others in similar situations to come forward.

The Labour Inspectorate encourages anyone concerned about their employment situation or the situation of someone they know to call the Ministry’s service centre on 0800 20 90 20 where concerns are handled in a safe environment.

The full decision of the case is available on the Employment Relations Authority website.

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