A $9,000 day at work!

8 Feb 2019

The Employment Relations Authority has once again highlighted the danger of pre-employment tests in a recent case.


The employer (a café) interviewed a prospective barista and at the conclusion of the interview told her that she was “exactly what we are looking for” and said “we would like you to come in tomorrow and work a full shift starting at 8am”.[1]  The employer never made it clear that the shift the next day was an unpaid pre-employment competency test and that she could leave at any time.  


During the test the ‘employee’ worked a full day (8am until 3.30pm) and did the work expected of regular employees e.g. making coffees, delivering food and drink to customers and handling cash.  These tasks constituted work for the employer because they provided the business with a commercial benefit, meaning she performed actual work that helped the business.  At this point, she became an employee of the business, even though she had not been expressly offered the job or given an employment agreement.


By not paying her, the employer breached a basic term of employment, that you get paid in exchange for work.  Not paying her was seen as constructive dismissal by the Employment Relations Authority.


As a consequence, the employee was awarded $9,000 in compensation, broken down into:



  • $7,000.00 - compensation for hurt and humiliation;

  • $119.07 - the amount owed for the day worked; and

  • $1,890.00 - the amount equal to four weeks’ notice based on the notice period in the draft employment agreement given to the employer’s employees.


What this case tells us is that as employers, you have to be especially careful if you have prospective employees perform pre-employment tests, and that getting it wrong can be a very expensive mistake!


Top Tips


We recommend, based on case law, avoiding pre-employment tests, but if you feel they are necessary here are five top tips.




  1. Make it very clear, in writing, that it is a pre-employment test, and not employment or an offer of employment.

  2. Do not offer to pay for the test.

  3. Do not exchange money, food, or anything else for the test.

  4. Do not have it last longer than a few hours.

  5. Have the prospective candidate perform mock work and not actual work, e.g. get the prospective barista to prepare a coffee for staff and not a customer. If tasks for customers or for commercial profit are undertaken, it may result in the candidate being considered an employee.



For more information on pre-employment tests:



 


[1] Mawhinney v Sfizio Limited [2019] NZERA 49 at [25].

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