Transfer station attendant to be paid seven years’ worth of holidays

A waste management company has been ordered by the Employment Relations Authority to pay holiday and public holiday pay arrears to a transfer station attendant it employed as a contractor, but who thought he was an employee.

Brendan Sigley was first contracted by Metallic Sweeping in 2015, and paid a flat rate of $307.69 for an initial nine hours a week, or $34.18 an hour. Other transfer station operators at the time were on the minimum wage of $14.75.

Over time his pay increased to $331.15 a week, with additional hours required over summer and the payment of an allowance to cover vehicle costs.

All the other transfer station attendants were employees of Metallic Sweeping but the company said because of the small size and remoteness of the Rai Valley Transfer Station, where Sigley worked, he was brought on as a contractor.

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Contractors are in business for themselves and usually cover their own tax and ACC obligations, have freedom around when and how they work, and do not have any of the normal employee rights such as paid time off or KiwiSaver contributions.

But if the working relationship does not meet the definition of a contracting situation, the court can rule that they are actually an employee.

The Employment Court ruled last year that Uber drivers were employees rather than contractors.

Over time, Sigley became unhappy that he was not being paid extra for public holidays. When he raised the issue, he discovered that the company considered him a contractor. He took the case to the Employment Relations Authority for a ruling.

For its part, Metallic Sweeping said the other transfer station operators were paid significantly less.

That, and the non-taxable vehicle allowance, showed that he was a contractor and not entitled to receive employee benefits such as paid holidays or compensation for working statutory holidays.

His contract had these terms struck out, but Sigley said he did not look through the agreement beyond checking the pay rate, and did not take any advice. The first page of the agreement called it a “waged individual employment agreement”.

Authority member Sarah Kennedy said Metallic Sweeping managing director Clive Peter clearly intended to engage a contractor for the role but Sigley was unaware of the distinction and did not necessarily have it communicated to him.

He was not required to submit an invoice and PAYE was deducted from his earnings, which Kennedy said was probably due to contract manager Trevor Sheldon being unaware of the differences between contractors and employees for tax purposes, because all other staff were employees.

A payslip was generated for Sigley when an application was made for a Covid-19 leave payment for him. If he was self-employed, he should have applied for this himself. When Sigley was unwell, his partner would cover his role.

Kennedy said, other than the rate of pay, there was no definitive evidence that Sigley was operating a business on his own account, as was required for a contracting agreement.

“Sheldon … was simply unaware of the difference between employees and contractors and I find that on the whole he treated Sigley in the same way he treated all the other employees. There was likely less oversight but I am not convinced that was a feature of an independent contracting arrangement but more a necessity given the remoteness of the Rai Valley together with the smaller size of that transfer station and Sigley’s competence in the role, the fact he showed initiative and was able to work unsupervised. This means I am satisfied that on balance the real nature of the relationship and the way in which it operated in practice was more akin to an employment relationship.”

She said Sigley was an employee and the company was told to pay holiday and public holiday pay arrears, and any KiwiSaver contributions that should have been made.