Friday, March 29, 2024

Audit highlights need for change

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The latest round of farm visits by labour inspectors found 22 of the 29 farms visited were non-compliant with employment legislation.
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Cases against nine of the farms are being considered for filing with the Employment Relations Authority (ERA).

The most common breach was for inadequate time records for employees (15 of the farms visited) followed by holiday and leave records (13) and wage records (10).

Seven farms breached all three of those statutory requirements.

The Labour Inspectorate’s dairy spokeswoman Natalie Gardiner, who is the inspectorate’s central cegional manager based in Hamilton, said the farms were selected for the audits based on a number of factors including previous interactions with the sector.

“We were expecting to see both compliance and non-compliance across the country.

“Of significance is that the two most serious cases of a minimum wage breach were found on the two farms with the most unpalatable shift patterns – 28 days on, two days off and 19 days on, two days off.”

The audit showed that shift patterns or rosters varied widely from 28 days on, two days off to five days on, two days off.

“It is worth noting that neither of the most seriously non-compliant farms employed migrant labour.”

A computerised payroll system was used on 18 of the 29 farms, of which 11 were non-compliant with labour laws, and of the remaining 11 farms using a manual time and wage recording system all were non-compliant.

“Often the manual or paper system of recording time and wages does not have the functionality of a computerised payroll and therefore may not be compliant with all aspects of employment legislation including the Holidays Act and Employment Relations Act.”

Often interaction with the employer’s accountant, from a payroll perspective, was mostly focused on PAYE requirements. There appeared to be a need for employers to work with their accountants so both understood how the employer was meeting their minimum employment responsibilities.

“We are engaging with those who provide support to employers in a general sense, not just about the farming sector but about how they may better understand what their clients’ needs are in respect of minimum employment standards.”

Gardiner said labour compliance was difficult on dairy farms when relying on manual record-keeping unless the employer was familiar with employment legislation.

As well as the nine cases which were being considered for ERA action, the inspectors issued 15 improvement notices and four enforceable undertakings. Three employers attained voluntary compliance for minor or historic breaches.

It was the fourth audit in a series started at the end of 2013 with a particular focus on the seasonal averaging of salaries and the failure to keep accurate time and wage records.

This audit showed the two biggest employers, both in Southland with 35 and 15 staff, ran computerised payroll systems, employed migrant staff and were fully compliant.

Of those farms one had a roster of seven days on and two days off (7/2) and the other had rosters for 11/3, 6/1 and 5/2.

Other compliant employers were a Hawke’s Bay farm with 10 staff and a roster of 12/2, a Waikato farm with 6.5 full-time staff on 12/3, a Canterbury farm with five staff on 8/2 and 8/3, and two more in Southland with four to seven staff with rosters of 11/3 and 12/2.

All ran computerised payrolls and only one had a fixed shift, which was 12 days on and two days off.

Labour Inspectorate general manager George Mason, who warned farmers at the DairyNZ Farmers Forum last May of more hard-edged enforcement of labour laws, said the focus was to make farmers better employers by ensuring they got the basics right.

He said the latest audit and previous farm visits showed “generous and well-motivated people often do not have the skills or knowledge to be good employers”.

“It’s important not to mix the message that a bad employer is therefore a bad person when it’s really a case of ensuring that good people have the basics in place to be good employers.

“But farmers do need to be motivated in that space in order to make that jump,” Mason said. He had a farm upbringing and was previously the chief legal advisor to the Department of Labour.

“And this is not just about compliance. It’s difficult to see how farms will achieve other employment outcomes, such as health and safety and productivity gains, unless the employer treats their workers fairly and has good staff participation which the basics enable.”

Accurate time and wage reporting was also necessary for an employer to know what the workers are doing, what they are being paid to do and to make the business run efficiently, he said.

“I have no doubt that the farming community has the wherewithal and desire to sort this out and make big improvements which will benefit not only workers but also farmers.”

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