Supie workers have reportedly had their jobs — and hopes of being paid for the last of their work — terminated. But what are their rights?
Yesterday, the online grocer was put into voluntary administration, citing "cash flow difficulties" after a key investor pulled funding.
Employees were informed at 9am yesterday of their termination, and were also reportedly told they will not be getting paid for their last two weeks of work, or have any annual leave paid out.
Despite being informed they will not receive any payment, employment lawyer Jeremy Ansell told 1News the question of whether employees will be paid out is "extremely difficult" to answer.
"Ordinarily when an employer is thinking about terminating an employee's employment on the grounds of redundancy, they have to run a process with them, they have to consult with them, call [them] into a meeting and explain what they're proposing to do and the reasons why, and work through a fair and reasonable process," Ansell said.
The owner's spoken out as workers and suppliers desperately try to find out if they'll be paid. (Source: 1News)
But Ansell said the situation at Supie is "a little different".
"Because there's a voluntary administration, it's all probably happened quite quickly.
"However, the employees have not had any consultation process whatsoever. They've effectively been given notice on the spot.
"Supie may argue: 'Well we didn't have time to do that, this was a fast moving thing, we simply couldn't consult', but those employees may have a decent legal claim there that the employers failed to go through a process and consult with them."
Supie's 120 workers were shocked today to learn they're out of a job and out of pocket (Source: 1News)
Will workers receive their final paycheque and holiday pay?
Although Ansell said for now the answer to the question appears to be "no", what "may end up happening" is employees could put in a claim to the voluntary administration.
Ansell said the employees can say they are "preferential creditors" and should be "paid out the money which is owing to them as part of the employment".
"That can include things like the unpaid holidays, the wages for the last two weeks and any notice provisions that have been overlooked by the employer."
Advice
On what the terminated employees should do, Ansell suggested they take legal advice.
"That's always a good idea to see what their rights and entitlements may be. Obviously they will be in shock at the moment and they will want to take stock about what this means for them and their families, particularly in the lead up to Christmas, but it is always good to take legal advice on their specific situation."
What about the suppliers?
On whether suppliers will receive a payout, Ansell said: "Everybody who Supie owes money to through whatever contractual relationship they had will probably put in a claim.
"It is then up to the administrators or possibly the liquidators if it gets to that point to work through all the different claims, figure out who has got preference and then who gets what money to the extent that there is any money to give."
The ideal process
Ansell said in an ideal situation, an employer would work through a process with the staff, and ask them about their views on disestablishing their position on the grounds of significant financial strain.
"It's one of those situations where the employees' views are ultimately not going to change anything, but it is important to work through that consultation and that is the part that seems to be missing here."
Who's to blame?
If there's a finger to point in this situation, Ansell suggested it is too early to tell.
"I think it is an unfortunate situation all round. I mean it would be interesting to know whether the company had any forewarning that this may happen prior to Monday."
Ansell said if the company did have forewarning of the situation, the employees "may have an argument" the employer could have run a "consultation process" with them.
"It probably wouldn't have changed the ultimate outcome, right? But at least they would have had a process to work through with those staff rather than dropping it on them at a moment's notice."
When will employees have an answer?
On when employees can expect answers on what will happen, Ansell said it will take "some amount of time".
"These processes don't move quickly. There will be a process to work through with all the different parties who are owed money by this particular employer and company, and it remains to be seen whether there is any money that is to be distributed to those who are owed it given the extent of their debts."
Earlier, speaking on the closure of the business, Supie founder Sarah Balle said she is "devastated".
"I have put absolutely everything into Supie. But I'm so grateful for all Supie's supporters — employees, customers, suppliers and shareholders. Together, we fought so hard to introduce competition in the market so that Kiwis could get a fairer deal for their groceries.
"I'm also grateful for the outpouring of support from the business community who have offered jobs to our team and the recruitment industry for offering their assistance too. Kiwis helping Kiwis in tough times.
"So I won't be commenting further for now, as my focus is on working with the administrators on the huge legal and operational process to close the business as efficiently as possible."
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