An unsettling agreement
An Employment Relations Authority (Authority
) decision, Cleverley
v Selwyn House School Trust Board
 NZERA Christchurch 43, serves as a
reminder that employees can bring claims for breach of minimum entitlements
even after signing a settlement agreement.
On termination of her employment, the
) signed a settlement
agreement under s149 of the Employment Relations Act 2000 (ERA
). A s149 agreement usually
provides certainty of settlement since its terms are final and binding (except for
enforcement purposes). The agreement had
a full and final settlement clause and, in accordance with the ERA, stated that
the parties had not forgone minimum employment entitlements.
Some years later, KC brought a
minimum entitlement claim against her previous employer (Selwyn
) having become aware of case law favourable to her. KC argued that she should have received the
minimum wage when she carried out sleepovers for Selwyn.
Selwyn applied to strike out the
claim on the basis that it was already settled. The Authority disagreed. The
agreement did not attract the certainty afforded under s149 because it (arguably)
settled minimum entitlements. Therefore,
the employer argued that the agreement, though not compliant with s149, was
still binding. However for that to
occur, the sleepover/minimum wages claim must be been in KC’s thoughts when she
signed the settlement agreement. It
wasn’t and therefore the full and final settlement clause didn’t exclude KC
from pursuing her claim.
Employers should be careful when
dealing with minimum employment entitlements and should identify all claims an
employee might have. Speak to us before
agreeing a settlement so that we can assist with such matters.
Image courtesy of Miranda Mylne.