Employment law expert warns employers can make employees pay for broken equipment

Employment law expert warns employers can make employees pay for broken equipment
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An employment law expert is warning Kiwi workers their employers can seek payment for damaged or broken equipment - but the employer has to prove three factors.

A healthcare worker took to Reddit on Wednesday for advice after they accidentally broke a sterilisation instrument at their workplace, which was used regularly for treating patients.

Alex* said it was the first time they had broken equipment in their two years of employment, and immediately "felt bad for it and apologised".

However, Alex was shocked when the company asked them to pay for a replacement instrument with a price tag of roughly $85.

"They have already ordered a replacement and sent me a copy of an invoice with the company header," said Alex, who confirmed they were on minimum wage.

Employment law expert Max Whitehead, the managing director of Whitehead Group Employment Solutions, told Newshub employers can seek payment from employees for damage caused to property.

However, for an employer to be able to do this, they must first satisfy the judiciary of three factors:

  • there must be a breach of the employee's employment obligations
  • this breach must cause loss to the employer
  • the loss caused by the breach must have been reasonably foreseeable.

"It was a rare occurrence in the past but more employers are exercising their rights to seek payment from employees for damages," Whitehead said.

"We now advise employees to seek advice in regards to purchasing insurance as often employees are in control of equipment that is worth significant amounts. [A] good example is truck drivers."

Whitehead noted it's not only material damages employers can order compensation for.

"In the past, employers have been successful in seeking an order [for] an employee [to] pay for poor workmanship. 

"There also is a case where the worker was ordered to pay his ex-employer $5m for setting up a competitive business while employed - Nova Energy vs Michael Mitchell."

*Fake name used