The ERA confirmed an improvement notice issued to Lendco Limited (formerly Wendco (NZ) Limited) by the Labour Inspectorate. Wendco sold the master licence for its New Zealand operations in May 2024.
An improvement notice is a formal directive requiring an employer to fix breaches of employment law.
Breaches of the Holidays Act 2003
The notice under dispute was originally issued in June 2024, and found Lendco breached several provisions of the Holidays Act 2003, including:
- failure to pay employees for public holidays that were not worked but were otherwise working days
- failure to correctly calculate and pay time-and-a-half for public holidays worked
- failure to provide alternative holidays for employees who worked on public holidays
- incorrect calculation of annual holiday pay.
The Labour Inspectorate began investigating Lendco in June 2023 after Unite Union took Lendco to the ERA for alleged breaches of a collective agreement. During that process the union also raised concerns about public holiday entitlements affecting 33 union members.
The union alleged Lendco was failing to pay employees for unworked public holidays when those days fell on otherwise working days.
This is not the first time the Labour Inspectorate has dealt with Lendco. In 2015 the company was issued an improvement notice for failing to calculate alternative holidays correctly, which Lendco subsequently complied with following a determination by the ERA in 2017. Then in 2016 the company entered into an enforceable undertaking for failing to provide entitlement and payment for annual holidays. Both enforcement actions were complied with.
Volunteering requirement
The ERA hearing focused on 2 main areas of dispute; the requirement for an employee to " A person who is not paid or otherwise rewarded for the work they do and does not expect to be.
Under their payroll system Lendco required employees to "volunteer" for public holiday shifts via its rostering system before those days could be considered " A day that the employee would have worked had it not been a public holiday, sick leave, bereavement leave, family violence leave, annual holiday or an alternative holiday for that employee.
Lendco argued that because Wendy’s restaurants were closed on Christmas Day, no employee could have an expectation of working that day, and therefore it was not an “otherwise working day.”
ERA Member Jeremy Lynch rejected these arguments because Lendco had effectively excluded employees from their statutory entitlement to paid public holidays unless they first volunteered to work.
“Under Lendco’s approach, the only way an affected employee can get a paid day off for a public holiday, is to first volunteer to work on the public holiday and then hope they will not be rostered to work the particular public holiday. The illogical nature of this approach is obvious,” Mr Lynch said.
Katriona Ikenasio, Labour Inspectorate Investigations Manager for the Northern region, said the ERA ruling sends a strong signal to employers that they need to ensure they get the basics right regarding public holidays.
“Employers who look for loopholes in the system to avoid their statutory obligations need to know there are consequences. Failure to comply with employment law may not only result in improvement notices — it could also lead to financial penalties and reputational damage.”
Mr Lynch directed Lendco and the Labour Inspectorate to attend mediation to resolve other issues Lendco had raised relating to the improvement notice after the hearing had concluded.
MBIE encourages anyone who thinks they or someone else has been treated unfairly in the workplace to contact our 0800 20 90 20 contact centre number where their concerns will be handled in a safe environment.