Posted on: Dec 11, 2013
Employing family members can lead to problems as the case noted below shows. Family members should always be given written employment agreements and be paid at least the minimum wage.
In Meroiti v Lindale Lodge Ltd  NZERA Wellington 104, Graeme was employed by his brother John as manager of the Lindale Motor Lodge. The agreement (which appeared to be unwritten) was that Graeme would live in and be paid $350 per week in the hand after tax had been deducted. Graeme was required to work hours as required. The brothers fell out and John summarily dismissed Graeme. Graeme issued proceedings in the Employment Relations Authority and claimed the difference between what he had been paid and the minimum wage, unpaid holiday pay, three months’ lost wages following the dismissal and compensation.
The Authority said because Graeme was an employee he was entitled to the minimum wage and holiday pay and it found Graeme had been unjustifiably dismissed. John did not appear at the Authority investigation to challenge Graeme’s claims. The Authority awarded Graeme gross unpaid wages of $86,935.25, holiday pay of $7,702.80, $17,745 for lost wages after dismissal and $6,000 as compensation for hurt and humiliation.
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