Retailer Smiths City has been ordered to pay up after making staff attend pre-work sales meetings - without pay - for 15 years.
Each morning for 15 minutes before its 34 stores open across the country, staff have been required to attend a 15-minute sales meeting. The Employment Court has ruled that these meetings count as work, and Smiths City must pay its staff to attend them.
"If the activity is integral to the employees' role, and there is expectation to attend, this is work, and employees should be paid for it," Labour Inspectorate regional manager Loua Ward said.
"Employers should not pass the cost of doing business onto their employees. Employees must be paid for all the work they do, and this includes handover times, briefings, and in some situations, the travel time to and from a work site," Ms Ward said.
"Too often we encounter employers attempting to avoid paying their employees by dressing up activities outside of businesses hours as something that is for the benefit of the employee or something that's not work. However we will look beyond that at the real nature of the activity."
In 2016, the Labour Inspectorate issued a notice to Smiths City over its failure to pay staff for attending the meetings.
Smiths City lodged an objection, arguing staff were not working during the meetings, which weren't mandatory. It also said it paid staff commissions made up for the unpaid meetings.
But after an appeal the Employment Court ruled in favour of the Labour Inspectorate, because commissions are not a substitute for the retailer's non-compliance with the Minimum Wage Act.
The court said staff who did not attend the meetings were likely to be seen as poor performers, and staff felt pressure to be present at the meetings.
Smiths City will now have to pay staff who attend the meetings, and reimburse current and former employees from the last six years for the unpaid meetings.
In a statement on Friday, Smiths City acknowledged the Employment Court decision. It said the company "considered the meetings voluntary and as a result did not pay those staff who attended".
"Smiths City now accepts the Employment Court’s Decision that the meetings constituted work as defined by the Minimum Wage Act and that this resulted in some employees being paid below the statutory minimum."
Smiths City chief executive Roy Campbell said: "We have now moved the sales meetings into employees' normal working hours."
The company will comply with the Court's order to repay those whose wages fell below the statutory minimum because of the unpaid meetings.