Auckland-based travel company Worldwide Holidays Ltd (WHL) has been ordered to pay former marketing manager Xiaoyu Kan over $140,000 after unlawfully reducing his salary and withholding bonuses during the Covid-19 pandemic.
Kan, who worked at WHL from 2017 until resigning in December 2021, claimed the company twice cut his wages without consultation, failed to pay bonuses, and deducted his annual leave entitlements while he was working.
WHL argued the cuts were necessary due to financial struggles caused by the pandemic and said employees had agreed to the reductions, a claim Kan denied.
The Employment Relations Authority (ERA) ruled that WHL failed to obtain Kan’s written consent for the salary deductions and bonus forfeitures, making the reductions unlawful.
The ERA decision highlighted that employer obligations remained unchanged despite the pandemic and that wage deductions required explicit written consent.
WHL’s managing director, Jing Jun Yu, was found to have imposed the first 20% salary cut unilaterally and could not provide proof that Kan agreed to the later 50% reduction.
The authority determined that Kan never consented to the changes, nor were the terms properly documented.
While WHL’s lawyer acknowledged that the pay reductions should have been recorded in writing, he emphasised that the awarded amount was much lower than Kan’s original claim. The authority ultimately ordered WHL to pay Kan $141,000 in unpaid wages, bonuses, and holiday pay.
