Smiths City's unpaid meetings puts businesses on notice

Friday, 11 May 2018

A decision ordering retailer Smiths City to pay its employees for unpaid pre-work meetings is a warning to other employers that they cannot force staff to work for free, a employment lawyer says.

For at least 15 years, every Smiths City store in the country has held a meeting of sales staff for 15 minutes every morning, covering topics ranging from sales targets to promotions.

Staff were not paid for the meetings and the time was not recorded as hours worked.

The company argued the meetings were not compulsory and no disciplinary action was taken against staff for not attending them, but in a decision released this week, the Employment Court ordered the electronics and appliances retailer to calculate arrears of pay below the minimum wage for all current and former employees for the past six years.

READ MORE: Smiths City ordered to pay workers over unpaid morning meetings

Employment lawyer Susan Hornsby-Geluk said the decision was a warning to any employers who put pressure on staff to arrive at work early to undertake duties for free.

'I'm not surprised by the decision, I think it's the right one, because if pressure is placed on people to be at work at a particular time, they should be paid for it.'

Labour Inspectorate regional manager Loua Ward said, if the activity was integral to the employees' role, and there was an expectation to attend, it was classed as work and staff should be paid for it.

The activities could include handover times, briefings, and in some situations, travel time to and from a work site, Ward said.

'Too often we encounter employers attempting to avoid paying their employees by dressing up activities outside of businesses hours as something that is for the benefit of the employee or something that's not work.

'We encourage any other employers who currently are failing to pay their employees for such activities, and we know there are some out there, to fix these practices, as following this decision, they cannot continue to plead ignorance.'

Retail strategist Chris Wilkinson said the Smiths City ruling was 'definitely an outlier case'.

'It is a company that has been fairly traditional in the way it's done business and like others, is likely to have some practices that are not in line with contemporary working ways.'

The Employment Court estimated the underpayment by Smiths City was more than $800 a year for a staff member consistently earning the minimum wage.

The order was limited to those employees who were paid at, or near, the minimum wage.

Hornsby-Geluk said this was likely because those paid a salary were paid for all hours they performed, including 'any reasonable, additional hours'.

'So salaried workers might have formal hours of 40 a week, but often they have contracts which provide that for any additional hours required to undertake the job, they won't receive additional remuneration.

'The people on minimum wage have to be paid minimum wage for each and every hour worked.'

First Union president Robert Reid said the Employment Court decision set a precedent that would help the union advocate for workers.

'Now we've got a case to say 'no, you can't do that, and if you do you have to pay for it, and if you have been doing it you have to backpay staff',' he said.

'There must be hundreds, if not thousands, of workplaces in retail and other parts of the economy where similar things are happening,' he said.

First Union retail, finance and commerce secretary Tali Williams said it was not a new issue, and was especially prevalent within retail.

'It's common for staff to be called into meetings before their workday begins, for sales huddles and the like. It shows businesses don't value or respect their staff's personal, out of work time.I  suspect this story will bring forward many more complaints.'

Smiths City has more than 30 stores and 400 employees.