In Amaltai Fishing Company Limited v Marunga the employer took money from the employers wages (a.k.a made deductions) to cover the cost of repairing damages the employee made to a hotel. Employees cannot incur vicarious liability, and the employer was in breach of section 4 of the Wages Protection Act 1983 subsequently the Employment Court provided:

Wages have to be paid in money and not partly in money and partly by discharging debts which seem valid to the employer but the existence of amount of which the employee may wish to dispute or at least to control the timing of their payments having regard to other commitments and needs.

Basically, the Court is saying here:

1. Wages must be paid in money.

2. Wages must be paid in full

3. Employer's have no entitlement to just take money willy nilly from your pay.

4. Employer's cannot tell employees what to do with their money.

This seems very clear, but Working For Workers cannot go one (1) day in Aotearoa New Zealand without coming across some employment situation where the employee is being lied to about the law and the employer is making unlawful deductions from an employee's wages. If this is your situation, don't hesitate to contact us.

In Charles Kidd in Partnership with Geoffrey Kidd t/a Kidd Partnership v Cowan, the Court of Appeal provided that a transfer of land valued at eighty thousand ($80,000) New Zealand dollars by the partnership to the employee was not to be offset against the wages of the employee.

In section 7 of the Wages and Protection Act 1983 the aforementioned act provides:

Wages to be payable in money (Subject to sections 8 to 10, an employer shall pay the wages of every worker in money only.)

Seems very straight forward, but employers will try their luck.

Such an action by and employer would likely be ruled by the Authority and the Courts as a action being in opposition to statutory provisions in section 189 of the Employment Relations Act 2000:

189 Equity and good conscience

(1) In all matters before it, the court has, for the purpose of supporting successful employment relationships and promoting good faith behaviour, jurisdiction to determine them in such manner and to make such decisions or orders, not inconsistent with this or any other Act or with any applicable collective agreement or the particular individual employment agreement, as in equity and good conscience it thinks fit.

(2) The court may accept, admit, and call for such evidence and information as in equity and good conscience it thinks fit, whether strictly legal evidence or not.

How one raises a successful claim for wage arrears and entitlement arrears is therefore why it is important to have a good representative

Owing money for items the employer deems necessary for the employee to live is a total scam in most cases.

In Juyi International Limited v Pan, the employer withheld an employee's wages on the basis that the employer could not deduct from holiday pay the value of a set of kitchen cabinets that the employer had paid for in the employee's home. Not only could the Employment Court not rule that the claim was not a claim of employment (rather one of another civil jurisdiction) the Court of Appeal later had to rule on ruling by the Employment Court made in equity and good conscience that the non-payment of the holiday pay by the employer was inconsistent with the Holidays Act 2003 and the Wages Protection Act 1983 when it provides:

Deductions from wages are specifically addressed by the WPA [Wages and Protection Act 1983] in several provisions. 16 The Court of Appeal considered one only of these for the purposes of the case before it, observing that deductions could only be made with the written consent of a worker. Since there was no such consent, the exception did not apply.

As you can see, no matter how far it goes. Unlawful deductions from your wages are absolutely not lawful.

Employers also cannot tell employee's what to do with their wages. Section 12 of Wages and Protection Act 1983 provides:

Employer not to stipulate as to mode of spending wages

No employer shall impose any requirement on any worker as to any place or manner in which or any person with whom that worker shall expend wages received by that worker, or dismiss any worker on account of any place or manner in which or any person with whom that worker expends those wages.

In the past, employer have tried to recoup wages form employees through various scams such as the famous company store. So much so that songs have been written about it.

This now extends to employers staying out of your pay packet. it coouldn't be any more clear. However, employers will try it on.

Wage deductions from your pay packet must be authorised by you (unless there is a statutory or lawful reason). This obligation cannot be contracted out of. The issue of unlawful deductions arose during the Covid-19 years. The Employment Relations Authority has mde it clear that the reduction of wages by employers because employees were unable to attend work, or restricted from performing work duties during Covid-19, was unlawful:

The workers did not agree to be paid 80 per cent of their wages or salary. Although some of the documents before the Authority describe the deductions as agreed, this was not a position advanced by Dove in either the written evidence or submissions.

Dove has breached obligations owed to the workers under the relevant employment agreements and the WP Act to pay contractual wages and salary during their employment without deduction.

This couldn't be any more straight forward. But employers will try their luck.

An employer must have written authorisation before making any deductions. In Begum v Effective Fencing Limited and employment agreement which was not signed before the employee began work meant that the employer could not rely on the deductions clause in the unsigned agreement because section 5 of the Wages and Protections Act 1983 required the employee's consent:

Ms Begum (Labour Inspector) has brought a wage arrears claim on behalf of Mr Sucich, against EFNZL and EFL, to recover money payable by way of holiday pay and public holiday pay to Mr Sucich who was a former employee of EFL and EFNZL respectively. This determination follows a reopening of an earlier investigation into the matter.

Ms Begum claims as follows: (a) $957.17 gross outstanding holiday pay from EFNZL; (b) $654.70 in gross outstanding public holiday payments; and (c) $532.63 in gross outstanding balance of holiday payments from EFL. [4] Ms Begum seeks a total of $2,144.50 gross from EFNZL and EFL, the major share of $1,187.33 is claimed from EFL.

I consider that at the time Mr Sucich resigned from his employment with EFNZL, he was bound by the terms and conditions contained in the individual employment agreement dated 17 November 2008, which he had not signed.

Section 4 of the Wages Protection Act 1983 (WPA) requires an employer to pay an employee’s wages without deduction. [26] Section 5 WPA entitles an employer to make deductions from an employee’s pay with the written consent of or at the request of the employee.

Even if an employee owes their employer money, the employer may not deduct the amount owing from an employee’s wages without their express written consent. An employment agreement may contain such consent. An employee may withdraw their consent to deductions being made from their wages by giving the employer written notice, in which case deductions must cease as soon as practicable

Again. Couldn't be any more straight forward. But employers will try their luck.

Even if an employer relies on a general deduction clause, that clause is null and void if the employer does not consult with the employee.

This is evident in Jonas v Menefy Trucking Limited. The Employment Court provides:

Menefy Trucking is based in Palmerston North. Mr Jonas had his home in Lower Hutt but he told the Court that he virtually lived in his truck from Mondays through to Saturdays. If he had a load to deliver through Wellington, he would take the truck to Lower Hutt overnight. Mr Menefy had arranged a park for the truck at Barnes Street. The Global Positioning System (GPS) records produced to the Court showed the dates on which the vehicle was parked overnight at Barnes Street as well as the dates when it was parked at Mr Jonas’ home address in Hikurangi Street. The vehicle was described as a “comfortable” FM Volvo, 45 tonne unit.

The provisions of the Wages Protection Act 1983 are mandatory. Under those provisions, an employer must pay the entire amount of wages payable to a worker without deduction unless the worker otherwise consents or, in certain circumstances, where there has been an overpayment. In cases such as the present, however, where a general deductions clause in an employment agreement is relied upon rather than an individualised written consent then, consistently with its good faith obligations under the Act, an employer must, at a minimum, consult with the worker before making any deduction. Without such a safeguard, the protection intended to be afforded by the Wages Protection Act 1983 would be illusory. It may also be that no deduction can be made on the basis of a general clause without that worker’s express consent, although this was not submitted by the plaintiff and, therefore, does not fall to be decided. I uphold Mr Jonas’ claim for a refund of the improper deduction. In his statement of claim Mr Jonas also seeks “a compensatory sum for the breaches of the [Wages] Protection Act of $5,000.00” but the remedy for any such breach of that Act is a penalty rather than compensation.

Mandatory. The employer must pay the entire amount of wages payable to the worker without deductions.

Simple. Obvious. And law broken by employers every single day.