Pumpkin Patch workers lose health insurance

Pumpkin Patch (file)
Pumpkin Patch (file)

Everything that could possibly go wrong is going wrong for Pumpkin Patch employees, their union has claimed.

When the struggling children's clothing retailer announced last month it was going into receivership, employees were told they might not get any redundancy payout should the chain shut down.

On Tuesday, receivers KordaMentha announced no buyer had been found, so the chain's 43 New Zealand stores will soon close.

It's now been claimed the company failed to pay for employees' health insurance, as they were required to in a collective agreement signed only a few months before the company went into receivership.

"About a week ago the receivers found that in actual fact, Pumpkin Patch had failed to pay for the health insurance," FIRST Union organiser Lisa Meto Fox told Newshub.

The cover was for the 12 months from August 1.

"They were told they weren't covered by their health insurance, which they thought they were. Really, everything that could possibly go wrong is going wrong. They just feel really, really let down."

KordaMentha partner Brendon Gibson says they advised staff of the issues with health insurance a week ago, and he says it was made clear that insurers are happy to meet with people affected to try and help them get cover.

Some workers have had offers of employment from other firms but for most it's another blow, says Ms Fox, especially leading up to Christmas.

"There needs to be a legislative change to prevent this happening again, because employees' entitlements should take preference.The corporate structure should not be a way that employers can get around paying people's basic entitlements."

Ms Fox says it's also not fair Pumpkin Patch's Australian employees will get their redundancy payouts, while Kiwis go without.

However Mr Gibson says there's simply nothing that can be done about that because the laws regarding redundancy in the two countries are different, and there are "no assets available to meet preferential claims" of the affected employees in New Zealand.

Pumpkin Patch Ltd, which employs the New Zealand staff, doesn't hold the chain's assets - they're owned by Pumpkin Patch Originals Ltd.

The firm's Australian employees' contracts are with Pumpkin Patch Originals Ltd.

"Of course we want the Australian employees to get paid their redundancy as well, but we also believe they need to meet their obligations to New Zealand employees," Ms Fox said.

Sales of Pumpkin Patch Originals Ltd stock are being used to fund Kiwi employees' outstanding holiday pay, so Ms Fox wants the same discretion used to fund their redundancy.

Newshub.