Monday, July 15, 2024

Christchurch council to make second staff payment correction

Christchurch City Council says it is now in a position to make a second and final payment to staff to correct millions of dollars in under-payments for leave.

The Council miscalculated leave payments and entitlements set out in the Holidays Act 2003, affecting payments and entitlements for annual holidays, public holidays, alternative holidays, sick leave and bereavement leave.

“The Holidays Act 2003 is a complex piece of legislation, and many employers inadvertently miscalculated leave payments for their staff,” says Council General Manager Resources, Leah Scales.

The Council’s calculation errors were discovered during an audit in 2016 and, in collaboration with the Ministry of Business, Innovation and Employment, a project was set up to put things right for current and former employees.

All leave payments and entitlements dating back to 2011 were recalculated. Council said around 90% of staff were found to have been paid incorrectly for their leave and/or not to have received the leave entitlements they should have. In this payment round, some staff will also receive leave adjustments for leave they should have been allocated, it said.

Current staff received a back payment in June 2021, covering what was owed for mistakes from 1 April 2011 to 31 December 2019 (inclusive).

In July 2021 former staff were able to register with the Council’s online claims service to find out if they were underpaid and make a claim if they were. That service is being upgraded to include the 1 January 2020 to 6 December 2022 period and will be open for registrations again soon, Council said today.

Although the calculation errors occurred beyond 2019, the Council could not pay out for the final two years (2020 and 2021) before completing a significant technology upgrade to enable its payroll and HR systems and processes to comply with the Holidays Act 2003, it said.

By the end of the project, about $7 million will have been paid out to current and former staff – $5.7 million in the first payment round and $1.2 million in the second. 

“This has been a hugely complex project involving a multi-disciplinary team,” says Ms Scales.

“We achieved compliance on 7 December 2021. We’re now confident in our systems and processes and have compliance monitoring in place.

“We’re pleased to be in a position now to pay our current employees what they’re owed for the period 1 January 2020 to 6 December 2021, and we’ll soon be contacting affected former employees and including this period in our payments to them.”

Current staff who are owed money will receive their final payments with their normal pay from 26 October.

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