Food firm must pay for lockdown lapse

A global aviation catering company which claimed more than

$1.5 million in Covid-19 wage subsidies tried to use New Zealand’s lockdown as an excuse to not pay staff the minimum wage and in doing so breached employment law.

Gate Gourmet is a Zurichheadquartered company that provides airline catering services for airlines and lounges at over

200 airports worldwide, including Auckland International Airport.

It received more than $1.5m in wage subsidies for just over 130 employees. However, a recent Employment Relations Authority (ERA) ruling said Gate Gourmet breached the Minimum Wage Act by failing to pay staff the minimum wage during lockdown.

The case was brought by the Aviation Workers United union and five fulltime Gate Gourmet employees, who said the company did not pass on a minimum wage increase, which came into effect on April 1.

Following the alert level 4 lockdown, which began on March 26, Gate Gourmet told employees that it would need to partially shut down operations.

Gate Gourmet was deemed an essential service and was operating throughout the lockdown.

The company said if an employee had not been rostered on, and had not been asked to work, then that meant Gate Gourmet had no work for them, the ruling said. It presented a written offer setting out three options.

Under option one staff could take all entitled annual leave until it was exhausted. The employee could then move to option two which was, on condition of the company receiving the wage subsidy, the employee would be paid at a rate of at least 80 per cent of their normal pay. Option three, also conditional on receiving the wage subsidy, was pay staff at the rate of at least 80 per cent of their normal pay, and the employee could then use annual leave in order to receive 100 per cent of their normal pay. The union agreed to options two and three, subject to Gate Gourmet complying with all applicable legislation.

Employees are paid weekly and are paid the minimum wage. Prior to March 30, they were paid

$17.70 an hour or $708 a week for a 40-hour week. On April 1 the adult minimum wage increased by $1.20 to $18.90 per hour.

Since April 1 the applicants, who have not worked much since the company partially shut down, have been paid at 80 per cent of normal pay or $604.80 per week.

Gate Gourmet told staff those who worked would be paid the new minimum wage rate and that employees who were not rostered would be paid at 80 per cent of normal pay.

The union advised Gate Gourmet that it believed it was not entitled to reduce the pay of any fulltime employee below the minimum wage of $756 per week, the ruling said. Gate Gourmet agreed to apply the minimum wage rate increase to $18.90 per hour to employees whether they were working or not. However, it maintained it was only required to pay non-working employees 80 per cent of their normal pay.

It was found the applicants were entitled to be paid at the minimum wage for 40 hours per week and Gate Gourmet was ordered to do so and to reimburse them for the difference between what they had been paid to date and their entitlement to the minimum wage.