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$9000 for 1 days' work

Published 12 Feb 2019

An extraordinary decision from the Employment Relation Authorities (ERA) recently saw a cafe worker who did a days' trial awarded $9000.

If we were unsure before, this case removes any doubt: awards from the ERA are going up.

Helen Mawhinney did a days' work as an unpaid 'competency assessment' for a Wellington based cafe 'Sfizio Ltd'. Ms Mawhinney claims she was not clear that it was an unpaid trial until after the day when she asked for payment.

When approached on the subject, the boss reiterated it was an unpaid trial, but offered her a job going forwards.
Ms Mawhinney declined the job and made demands about payment for the trial.

Following a spat of threats and fictitious derogatory reviews from Ms Mawhinney's friends on the cafe's Facebook page a group of Ms Mawhinney's friends also stormed the cafe shouting and threatening staff, loitering outside to deter customers and generally making a public nuisance. At this point police were called, the cafe closed and staff told to go home.

Ms Mawhinney then decides to adopt the legal approach and request mediation.
The boss decides they know the law and that they were in the right and declined mediation.

The issue then gets escalated to the ERA, who quickly determine there was doubt around whether or not the day was a trial since no documentation exists, therefore Ms Mawhinney was an employee and it was a full days' work undertaken. Finding in favour of the 'employee' and awarding $119 for the day worked, $1890 for 4 weeks termination notice since she was an 'employee', and $7000 for hurt and humiliation.

It would appear that awards for hurt and humiliation/damages are increasing, either that or the threshold for perceived hurt is lowering. Back in 2017 Chief Judge Christina Inglis of the Employment Court suggested a strata system of 3 levels to calculate compensation based on level of harm suffered. The lowest harm band allowing awards up to $10,000, medium loss/damages up to $50,000, then the highest $50,000 +.

A few lessons from this case:
  1. Nothing wrong with trials, but make it crystal clear. Document trials and get signoffs. If you're unsure about this download one from the Library in our Toolbox or buy one here:
  2. Keep trials short. The shorter the better. One argument against trials is that the business benefits from free labour.
  3. Do not decline mediation. Does not look good for you acting in 'Good Faith', and it will get escalated.
  4. Get representation. Mediation or the ERA, get professional representation from the outset.