An unsettling agreement

An Employment Relations Authority (Authority) decision, Cleverley v Selwyn House School Trust Board [2016] NZERA Christchurch 43, serves as a reminder that employees can bring claims for breach of minimum entitlements even after signing a settlement agreement.

The facts

On termination of her employment, the employee (KC) 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.

The decision

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.

Comment

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.

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