The founder of a luxury suit retailer with celebrity clients has been ordered to pay a former employee almost $21,000 after putting him through "one of the most stressful times" of his life.
Murray Crane of Crane Brothers was found to have breached Jordan Gibson's employment contract by the Employment Relations Authority (ERA) on Monday.
Mr Gibson was hired as creative director of Auckland outlet store Gubb & Mackie in 2015, and was given a 10 percent shareholding. The business failed to meet sales targets and went into liquidation in 2017.
He sought more than $22,000 in unpaid wages, holiday pay, KiwiSaver contributions and leave entitlements from Mr Crane. The ERA ruled that Mr Crane must pay Mr Gibson a total of $20,956.32, including $5833 in notice of his termination.
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Mr Gibson told Newshub he's pleased with the outcome.
"It's been a long time coming. It was a good year-and-a-half-long saga that was drawn out and delayed as much as possible. I'm just relieved, it's a real weight off my shoulders."
He first realised something odd was going on with his pay in early 2017. He'd been told he would no longer receive a salary but would instead be paid in "drawings", a form of payment for working shareholders which is taken out of the business profits.
"It was the first I'd ever heard of that term," Mr Gibson says.
He was told nothing would change for him, but that turned out not to be the case.
"It meant my employment ended, but due diligence wasn't done to inform me of that."
Between September 2016 and February 2017, he'd noticed his pay was frequently delayed and often short, which was due to the business' cashflow problem. His PAYE and KiwiSaver contributions were also missing.
"That was when the alarm bells started ringing. I then knew that the business was under distress."
He tried to ask Mr Crane what was going on via email and in person - but every time he did, the issue was deflected or ignored completely. Even in meetings with Mr Crane and his lawyer - which he says were framed as "board meetings" - his pleas for an explanation fell on deaf ears.
"I was constantly bringing it up... I was told it would be explained to me later."
There were other red flags that indicated the business was struggling, such as problems with paying suppliers. However he didn't leave Gubb & Mackie, because he knew Mr Crane was looking at selling the business and he wanted to suggest that he take over - a proposal that Mr Crane ultimately turned down.
In March 2017, Mr Gibson was "abruptly" informed that the business was in liquidation and he was out of a job, effective immediately.
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He raised a personal grievance against Mr Crane for unjustified dismissal, and set about pursuing $22,000 in arrears for breaching his employment agreement - an escalation he says he was "pushed into doing".
"It wasn't a situation I wanted to be in," he says. "It could have been dealt with more easily, but it was clear I had no choice."
He calculated he was owed $6590.55 in unpaid wages between September 2016 and April 2017, $5833.33 for his notice of termination, $5923.08 as holiday pay for annual leave owed, and $3955.53 in KiwiSaver contributions.
"It was a pretty unstable time for me. I didn't know what would happen with my career, and it was affecting my ability to meet my costs. It was one of the most stressful periods I've ever been through."
Monday's ruling has brought about the end of a difficult and costly 18-month ordeal.
"It's a big relief, and very validating to get that decision. I didn't realise how much impact it was having on me until that moment."
Mr Gibson says he worked with Mr Crane for six years at both Crane Brothers and Gubb & Mackie, and has mixed feelings about his former boss, who attracted controversy in the past with a "politically incorrect" job listing.
"I knew what he was like: quite a firm character. I'd heard things before, but he gave me this opportunity to get started."
It was difficult to get along with him once it was obvious the business wasn't doing well, and that things were being kept from him, Mr Gibson says.
"Our relationship became strained and awkward, and we avoided each other. It was one of the strangest times of this whole saga, that lack of any communication."
Mr Gibson has since set up his own clothing brand, and has a store on High St, which he says was a "big step".
"It was hard to have this going on in the background, both because of the stress and all the work that went into documentation."
Mr Gibson says a strong support network of friends and family helped him through it, and he has a message for anyone in a similar situation: don't go it alone.
"I'd implore them to seek legal help. Don't try and deal with it on your own if it gets to be more than you can handle," he advises.
"You also need people who can support you mentally so you can keep going. Carry it through, and don't give up."
Mr Crane told Newshub he's disappointed by the ruling, but can't "remain despondent" at how things turned out.
"As a business owner, you always assess the risk. This time I got it wrong."
Newshub.
