Contact me if you are employing staff to ensure you get it right first time.

Douga@abrahamconsultants.co.nz

Parkes v Squires Manufacturing Ltd [2011] NZERA Wellington 22, 11 February 2011

A company could not rely on its 90-day trial period clause because the employee worked for half a day before signing the intended employment agreement, the Employment Relations Authority has determined.

Parkes was offered as a job as a machinist. She was given a draft employment agreement that included a trial period provision under sections 67A and 67B of the Employment Relations Act 2000. She started work and signed the employment agreement after lunch on her first day.

The factory made outdoor clothes and Parkes’ previous experience was sewing undergarments. The two have different manufacturing requirements and it wasn’t long before the employer became concerned about her skills. Two days after she started work, Parkes was dismissed in reliance on the trial period clause. She was told that she would be given one weeks’ pay in lieu of notice. The employer signed the employment agreement five days’ after Parkes’ dismissal.

The Authority determined that as the terms of the trial clause had to be in writing and signed off at the commencement of the employment relationship (and not inferred as an “intended” or draft agreement), the trial period clause did not comply with section 67A. Parkes started work without the employment agreement being signed by both parties, which meant she was an existing employee, even though she had been working for a very short time before signing. Sections 67A and 67B therefore could not apply, and the company could not rely on the 90-day trial clause in the “intended” agreement.

Noting the employer’s indignation and surprise at the reasoning, because they had been told by the Department of Labour they could apply the trial period clause, the Authority referred to the Employment Court in Smith v Stokes Valley Pharmacy (2009) Ltd, where it was held “Sections 67A and 67B remove longstanding protections and access to dispute resolution and to justice. As such, they should be interpreted strictly and not liberally because they are an exception to the general employee protective scheme of the Act”.

The employer was also not in compliance with section 67B because Parkes was not dismissed on notice. The Authority observed that the Court has held that notice has to be more than simply the advice of dismissal, as it was in this case.

The Authority concluded that Parkes had been unjustifiably dismissed and awarded her 13 weeks’ lost wages and $5000 compensation for hurt and humiliation.

Remember, if you offer credit, your client is obliged to meet your repayment requirements. If they do not do this, you are quite within your rights to pass the debt to us for collection.

Most frequently, debt recovery is more effective and achieved more rapidly if the debt comes to us sooner rather than later.

Don’t wait until the debt reaches your 90 Day column; pass it to us as soon as it is overdue. This establishes with your client that you will indeed enforce your terms of trade. It also makes it more difficult for them to hide.

REMEMBER - CASH FLOW IS KING!

We are happy to discuss with you any questions you may have aimed at assisting your business protect your cash flow.

Please email me:

Doug Abraham

douga@abrahamconsultants.co.nz

Changes to the Privacy Act which were introduced in February 2006, require a creditor to have obtained the written permission of a prospective client before being able to conduct a credit check.

An essential clause for inclusion in any terms and conditions is one declaring that all fees incurred in the recovery of outstanding monies will be recoverable from the debtor.

If you are a business which does not provide a credit application, you should at the very least have a sign clearly displayed stating that all fees incurred in the recovery of outstanding monies will be payable by the client. Your staff must point this sign out to new clients to permit enforcement at a later date.

If you have any queries regarding the recovery of collection costs, please contact:

Doug Abraham

douga@abrahamconsultants.co.nz

If they purchase the vehicle without completing a vehicle check, it may well cost them thousands of dollars and no vehicle to show for it. These cars are called “lemons”.

Our research shows that at least 52% of the vehicles we are repossessing for finance companies have been on-sold to a new buyer who have obviously not checked to see if they are buying a ‘lemon’.

Recently we tracked down and repossessed a vehicle that had been sold to the third owner since the vehicle was registered with a security interest as collateral for a loan.

The previous owner had learnt that the debtor, who was living in Australia, had defaulted and the car was sought for repossession. It was quickly on-sold to the current owner who also had not done any form of check.

The agent had to explain to the new owner that the vehicle was sought by the finance company for a loan in default - as it was being towed away. The agent said that it has become a common occurrence and he is continually surprised that people have been able to sell vehicles that they have used as a security for a loan.

A cruel example surfaced when two long time girl friends swapped cars. One of the girls had her vehicle registered for a loan. She swapped the vehicle for one that did not have any hooks. She then sold that vehicle, moved to Australia and stopped the repayments to her loan on the swapped car. The first the other lady became aware of the finance agreement was when the car was being repossessed. Sadly, the very afternoon the car was repossessed, she had just farewelled her friend returning to Australia  - after visiting and enjoying her hospitality for a week.

There is no reason why potential buyers need risk buying a lemon. For as little as $20 and 10 seconds of their time they can access excellent web sites that will provide crucial information including whether the car is stolen; security interest (money owing); adverse accident history; ownership history; odometer history, deregistering of a vehicle, new plates, last WOF date and if it  passed or failed, and much more.

Recommended sites are:

www.aalemoncheck.co.nz
www.vir.co.nz
www.autofinder.co.nz

If you do not have internet access please call us and we can put you in touch with the independent experts on vehicle purchases.

Doug Abraham

douga@abrahamconsultants.co.nz

With the increase in mortgagee sales home buyers are buying properties thinking that they have bought well and then on possession date expect that the house is delivered vacant and in good condition!

Abraham Consultants received an S.O.S from a solicitor of a young couple who had bought a nice home in Taradale to find that on Friday, the possession day, not only was Mr X (old owner) still living in the property but was not making any effort to leave. They found that they had to continue to pay rent and also the mortgage for the property occupied.

We were required to visit Mr X just a few days before Christmas and he was playing the victim even thou he had not paid any mortgage for over three months. He declared he had no where to go and did not seen proactive in looking. It transpired when talking to him that he expected that legal delays would mean that he would be in the house rent free until the New Year. Meanwhile the new owners frantically wanted to be in their new home for Christmas.

Abraham Consultants outlined the situation to Mr X directing him to be out over the weekend. On Monday morning the property was still occupied and Mr X had gone walkabout and was contacted when he was remotely trying to access his answering phone.

Abraham Consultants were able to have Mr X off the property by 5pm that day.

Abraham Consultants swung into action and had:

• Access to the property.
• Issued Mr X with a Trespass Order
• Provided Trespass Order to the Police and informed them what was happening
• Photographed inside and outside of property prior to any eviction.
• Arranged for furniture removers to move furniture onto the driveway.
• Conjured Mr X to obtain a van and assistance to move goods and furniture from the property.
• Oversaw the process to ensure property was not damaged and fixtures and fittings where not removed.
• Conducted final check of property with Mr X and new owner
• Reiterated to Mr X about Trespass order and ramifications of trespassing onto the property.
• Handover the property to new owner.

This was the first of many evictions and surveillance’s required to protect the interests of buyers of Mortgagee Sales.

Doug Abraham

Abraham Consultants
douga@abrahamconsultants.co.nz