If you pay your staff on a commission only or piece rate basis, then you need to be aware of an important decision by the Employment Relations Authority.
The Employment Relations Act was amended on 1 April 2009, to provide an entitlement to two paid 10 minute rest breaks and one 30 minute unpaid meal break during an 8 hour shift.
However, the amendment did not explain how this entitlement applied to workers who were paid only for what they did or sold (and who were not paid an hourly rate). Clearly, the intention of the legislation is that the 10 minute breaks are paid, but how does an employer pay an employee for those breaks if the are paid only on the basis of the work they do during any time period?
The Authority has now ruled in FIRST Union Inc. v General Distributors Ltd that piece rate workers are entitled to “paid” rest breaks.
The collective agreement at General Distributors stated that the workers would be paid by piece rate and would not be paid during breaks or other interruptions to work. The Union brought a claim seeking wage arrears. The Authority ruled that the words of the Act were clear and that the entitlement was to “paid” rest breaks.
Therefore, even if the workers were paid piece rates, they were still entitled to actual payment during these breaks.
Unfortunately, the Authority provided no guidance whatsoever on how such a payment was to be calculated and the proposed amendments that address it. Any employer paying on a piece rate or commission only basis will need to carefully consider the implications of this decision. If you pay employees piece rates or commission only, we would be happy to discuss this further with you.