Smiths City still owes thousands for unpaid meetings
More than 100 former Smiths City staff are still owed thousands for unpaid meetings, the company’s receivership documents show.
Smiths City went into receivership in May last year before the brand was bought by investor Colin Neal, who set up Smiths City (2020).
According to the creditor compromise proposal, issued by receiver Colin Gower from BDO and Alastair Kerr, on behalf of the company’s directors, the company still owes about $60,000 to 101 former employees for unpaid meetings they were required to attend.
This follows a decision by the Employment Court in 2018 which ordered the company to pay its employees for unpaid pre-work meetings. For at least 15 years, every Smiths City store in the country held a meeting of sales staff for 15 minutes every morning, covering topics ranging from sales targets to promotions. Staff were not paid for the meetings and the time was not recorded as hours worked, resulting in some staff not receiving the minimum wage once the extra 15 minutes was taken into account.
The company argued the meetings were not compulsory and no disciplinary action was taken against staff for not attending them, but the court found otherwise. Chief Judge Christina Inglis said ‘‘the expectation to attend, and pressure placed on
staff to do so, was direct and forceful’’.
At the time of the decision, the company owed $1.5 million for the unpaid meetings. If the 101 former employees make themselves known to receivers, they will be paid. If those still owed money for those meetings are not found, the balance will go to Inland Revenue as unclaimed money.
Each known creditor has been sent the creditor compromise proposal to vote on, with voting closing on June 4. The proposal makes it clear that the $4.6m available to pay Smiths City’s debt will not be sufficient to cover everything that is owed.
The majority of creditors will get between 40-60 cents on the dollar of what they are owed, depending on their classification as either a Class 1 or Class 2 creditor, which includes unsecured creditors. Businesses that have not made a claim have until June 4 to do so.