Last week we discussed employers in the headlines and now our focus shifts to job seekers looking for a role.
Helen Mawhinney’s story has been in the media since 2017, with her story being reported internationally by the United Kingdom’s Daily Mail and Taiwan’s Apple Daily. Last week Ms Mawhinney’s battle with Sfizio Ltd (‘Sfizio’) reached a conclusion when the Employment Relations Authority (“ERA”) issued a decision.
It all started when Ms Mawhinney sought a position with Sfizio, who operate Wellington cafes Wadestown Kitchen and Sfizio Espresso Bar on Lambton Quay. Ms Mawhinney attended an interview and made some coffees for the directors of the company so they could assess her barista skills. Following the meeting, Ms Mawhinney understood that she was hired by Sfizio when they told her to come in the next day and work a ‘full shift’.
After working a full shift the next day, Ms Mawhinney asked if she should provide her bank account details for the payment of her day’s work. She was told that the day was an unpaid trial. This is where Ms Mawhinney’s claim began.
Breakdown of the award
Despite no signed employment agreement by either party, the ERA found that Ms Mawhinney was an employee of Sfizio. The ERA further found that Sfizio’s failure to pay for a day’s work was a fundamental breach of their employment obligations and lead to Ms Mawhinney being constructively dismissed.
Ms Mawhinney was awarded:
• $7000 compensation for emotional distress;
• $1890 four weeks’ notice; and
• $119.07 for the seven hours worked.
The award could have been higher
This award has attracted further headlines with many comments saying that $9,000 is a lot for one day’s work. Reading the decision, Sfizio is lucky the award was not a lot higher. As the ERA found that Ms Mawhinney was constructively dismissed (therefore she has established her personal grievance), she is entitled to compensation for lost wages.
The Employment Relations Act 2000 (“Act”) provides that when an employee has a personal grievance and lost wages as a result of that grievance, the authority must order the employer to pay the employee the lesser of a sum equal to that lost remuneration or to three months’ ordinary time remuneration.
Ms Mawhinney alleged that at the end of her interview one of the directors told her she was exactly what they were looking for and that they could give her 30 hours per week. On this basis, the starting point for the award for lost wages that Sfizio would have been required to pay is $5,670.00 (being $15.75 per hour for 30 hours per week for 12 weeks).
Ms Mawhinney had an obligation to mitigate her loss. However, as she did not provide evidence that she was looking for work during the 3 months after her day of work the ERA declined to make an award for lost wages.
Competency assessments – what are they and are they legal?
A key sticking point in the case was whether Ms Mawhinney should have been paid for the work she did. While the law does not allow unpaid trials, competency assessments as part of the interview process are permitted. The difficulty is determining the line between a competency assessment and work.
The line between work and a competency assessment is crossed when the employer gets an economic benefit from what the employee is doing. In this case, the making of the coffees for the directors was a competency assessment; they did not receive an economic benefit by her doing this. However, the day’s work serving customers and performing all the tasks that Sfizio required an employee to complete shows she contributed to their business.
Whether Ms Mawhinney agreed to work an unpaid shift or not is irrelevant.
90 day trial period
If Sfizio wanted to assess Ms Mawhinney’s competency or fit further, they could have employed her and included a 90 day trial period in her employment agreement. The law around trial periods is changing (yet again). From 6 May this year, an employer’s right to use a trial period will return to only those employers who employ fewer than 20 employees. All the other obligations of the trial periods will remain.
To name a few:
• The clause must be in writing;
• The clause must inform the employee that the employee may dismiss them with 90 days and they will not have the right to bring a grievance in respect of that dismissal; and
• The employee must have signed the employment agreement before starting work.
Need more information?
It is essential to know your rights before entering into an employment relationship. Make sure you have an employment agreement which clearly outlines when employment will begin, and your entitlements in respect of this. If you are asked to undertake a competency assessment, ask for the details of this in writing.