New Zealand master of menswear Murray Crane says a recent employment dispute with a former staffer has been one of the biggest learning curves in a 20-year career.
HR Matters Tip
Make sure that all HR related agreements are signed and documented to avoid ambiguity or employer allegation.
Crane, the founder of Crane Brothers, was ordered to pay former staffer Jordan Gibson $28,000 in costs and wage arrears, after the Employment Relations Authority found the worker was dismissed without notice.
Gibson was hired as creative director of Auckland outlet store Gubb & Mackie in 2015, and was given a 10 per cent shareholding. The business failed to meet sales targets and went into liquidation in 2017.
In March 2016, Gibson agreed to be paid via drawings - money taken by a shareholder in a business, on which tax still has to be paid - rather than a salary, which is received with tax already paid.
Crane said he took the change to mean that Gibson was no longer classed as an employee but Gibson said he was only told it was a change that would benefit the company, which was having cash flow problems, and would have no effect on him.
Around September 2016 and through to February 2017 Gibson's pay was sometimes delayed or short as Crane, the sole director of the company, juggled limited finances to pay staff, suppliers, rent and other business costs.
In February 2017, Gibson raised concerns about that situation. By early March, Crane began winding down the business which he described as insolvent.
And by the end of that month, Crane told Gibson "there is no requirement for you to be at work" as the store would close the next day.
Last month Employment Relations Authority rejected the idea that Gibson became a working shareholder, not an employee, in 2016.
It ruled Crane had breached Gibson's employment contract by failing to correctly pay his wages, holiday pay, KiwiSaver contributions and give notice of termination. Crane and Gibson are currently in settlement negotiations.
Crane said, having worked in the retail industry for over two decades, he felt he had it all figured out.
"I thought after 20 years that I can take whatever's thrown at me.
"Being in business for a while has probably tripped me up here. I was operating in an environment I thought I knew quite well. I've never had a hostile environment around employment. I've had staff that have been with me for over 10 years, left and want to come back.
"Things like holiday pay, I've been a director in my company for 20 years and never recorded my [own] holiday pay."
Crane said that was how he assumed Gibson also viewed his employment.
"I came in a situation where I was putting myself in his shoes and thinking nobody ever gave me an opportunity like this. If I had that opportunity I would do whatever I could to make it work. That's probably not how [Jordan] saw it."
Crane said Gibson was a shareholder who would become a director after the business was successful.
"He had access to business owner rights from the beginning things like allowances and flexibility in his role."
Gibson said he was happy with authority's outcome as he always thought of himself an employee.
"I'm looking forward to going forward with my life. I can start to move on and focus on my business," Gibson said.
Gibson started streetwear brand Check Downtown at the end of 2017.
Crane said he was going through a "soft reset" following the employment dispute.
"I was a little too trusting and reliant on my own gut instinct.
"I guess you have to plan for the absolute worst situation and work back from there and that's not something I was really prepared to talk about because I didn't really think it would happen. I think I would definitely be more vigilant around how everything was documented.
"My main learning is to document things to the extent they could be used in a court of law. It's that grey area from someone being an employee and not being anymore as a shareholder in a business."
He said he was disappointed this experience had somewhat tarnished his brand
"There was no calculation or nothing done maliciously or set out to do something deliberately. People that know me understand that when you're closely associated with your business it has to have an impact which is unfortunate."
- Full Article: https://www.stuff.co.nz/business/111482352/murray-crane-after-20-years-in-business-employment-dispute-still-a-surprise?