Bunnings NZ owes employees $11 million for incorrect holiday payments

The company has recalculated all leave payments from April 1, 2004, to May 31, 2018. Photo: John Sefton

Bunnings, the hardware chain owned by Australia's Wesfarmers, will pay more than $11 million to 12,235 New Zealand past and current employees after identifying mistakes in implementing the Holidays Act 2003.

The company has recalculated all leave payments from April 1, 2004, to May 31, 2018, and said all money owed will be inflated to today's dollars in line with the Reserve Bank of New Zealand Consumer Price Index. The median payment is $317.

The government last month formed a taskforce involving government, business and workers, to recommend changes to the Holidays Act 2003 in a bid to unravel the legislation's complexity to cope with a fast-changing labour market. Business has long lobbied for changes, arguing its complexity costs time and money, in particular with the rising number of part-time and casual workers. The taskforce aims to recommend changes to the act by mid-2019.

Bunnings NZ general manager Toby Lawrance said today that the company will ensure employees are paid correctly until a permanent solution can be implemented.

“Like many other private and government organisations, we have found interpreting and applying the Holiday Act to be a challenge," Lawrance said in a statement. "As a large employer in New Zealand we understand the importance of the trust that exists between our team and the business, particularly in ensuring they are paid correctly. Clearly this is disappointing for us and for our team and we will continue to work to ensure that we have the right systems and processes to support our team."

Back payments for current employees are already underway and past employees are being contacted via their last known address, Lawrance said. Bunnings said anyone who thinks they may be affected should submit a claim form on the Bunnings website.

Data from the Ministry of Business, Innovation and Employment indicates between July 2012 and March 2018, 51 employers have paid arrears to 18,100 workers totalling $6.14 million due to noncompliance with the act. The data doesn't include data from the New Zealand Police. According to MBIE, the police have made six arrears payments totalling $39 million, and have more payments to come as they await the implementation of their new compliant payroll system.