Coronavirus: Form Building and Developments sacks staff after applying for wage subsidy
Friday, 1 May 2020
Construction contractor Form Building and Developments says it will return part of its wage subsidy after sacking workers despite receiving the Government handout.
The second-tier contractor told staff it was applying for the wage subsidy scheme on March 24, on the second day of the alert level 4 lockdown. But after reassuring staff it was doing everything it could to keep jobs, on April 23 the company told workers in a Zoom meeting that they would lose their jobs.
The wage subsidy scheme, available to employers, contractors, sole traders and self-employed workers who meet certain conditions, provided a 12-week lump sum payment for employers to pass on to employees.
Form Building and Developments received $1 million in wage subsidies for 155 employees, but still sacked some workers.
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A former employee who Stuff has agreed not to name, said about 20 staff, including those who had worked during the lockdown, were given one week's redundancy pay.
'There was no consultation. I don't think this was related to Covid-19, they just saw this as an excuse to make us redundant,' the worker said.
'A number of us are left without a vehicle, phone, laptop, income and are having to sell our properties or assets on Trade Me. They have refused to notify employees in writing as to how much pay they would be receiving and when they could expect their one week's pay.'
The company had internally listed nine jobs, including roles that matched or were related to those of staff who were sacked.
'I asked if I could be redeployed and they said 'no comment',' the former employee said.
Another staffer who lost their job in the Zoom meeting said the job cuts included new and experienced staff who had been working for the company for several years.
The worker said the announcement came as a shock.
Managing director Andy Dew would not confirm how many staff had been made redundant, saying it was confidential information.
On March 25, Dew sent an email, seen by Stuff, reassuring staff it wanted to keep them all employed.
'Our application for the Government wage subsidy was submitted last night.
'Our primary focus here is keeping you all employed and as I’ve said before, please have faith that we are working tirelessly on this and I am confident that the best decision will be made for all.'
Dew ignored requests for a phone interview but indicated in an email that the company would pay back the wage subsidy requested on behalf of those workers who had lost their jobs.
'Several projects were put on hold post the level 4 announcement indefinitely due to Covid-19. This information was received after the wage subsidy was applied for and received,' Dew said.
As of last week, the scheme has paid out $10.4 billion to support the incomes of more than 1.6 million workers.
On April 24, Finance Minister Grant Robertson said a total of $17.5 million of wage subsidies was being repaid by more than 1200 companies.
Of the repayments $16.2m was volunteered by companies and the self-employed who claimed the subsidies in error.
Random and targeted audits into 2435 wage subsidy claims and 292 allegations of abuse of the scheme have led to 56 applicants being asked to repay $1.25m.
Robertson said the false claims represented a 'fraction' of the 500,000 claims for $10.3b that had been paid out so far.