2016 September An unsettling agreement

2016 September An unsettling agreement

Posted by admin on September 7, 2016

A recent Employment Relations Authority decision is a reminder that an employee can bring a claim for breach of minimum entitlements even after signing a settlement agreement.

In this case, 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 House School) 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 the school.

The school 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 school argued that the agreement, though not compliant with s149, was still binding. However for that to occur, the sleepover/minimum wages claim must have 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.

When you’re dealing with minimum employment entitlements, be careful and identify all claims your employee may have. As well, before agreement to any settlement, do talk with us first.