Wendy’s Former Operator Loses Appeal Over Holiday Pay Failures

The Ministry of Business, Innovation and Employment (MBIE) has confirmed that the former owners of Wendy’s restaurants in New Zealand broke key employment laws for many years and have now lost their attempt to overturn an official order to fix those problems.

This case affects past Wendy’s workers and serves as a reminder to all employers about following basic holiday pay rules.

What Happened

Lendco Limited, previously known as Wendco (NZ) Limited, used to run Wendy’s across New Zealand. The company sold its NZ operations in May 2024.

MBIE’s Labour Inspectorate investigated the company and issued an improvement notice in 2024. This notice is a formal order telling an employer to correct breaches of employment law.

Lendco tried to challenge this notice at the Employment Relations Authority (ERA).
The ERA reviewed the evidence and said the notice was correct and must stand.

What Lendco Did Wrong

The investigation found that for at least six years, Lendco had breached the Holidays Act in several ways. Key problems included:

1. Not paying staff for public holidays that they did not work, even when it was an ordinary workday for them.

2. Not paying the correct time-and-a-half rate for public holidays that were worked.

3. Not giving staff an alternative paid day off after working on a public holiday.

4. Calculating annual leave pay incorrectly.

These failures affected dozens of employees and created long-term underpayment.

Why the “Volunteer to Work” Rule Was a Big Problem

A major part of the dispute was Lendco’s rule that staff had to “volunteer” through the roster system before they could be considered as working on a public holiday.

The ERA said this rule was illogical and unfair.
It forced workers to volunteer in advance even when the restaurant might not roster them.

In simple terms:
Workers could not get a paid public holiday unless they first put their hand up to work that day. This removed their legal right to public holiday pay.

The ERA also rejected Lendco’s argument that employees could not claim Christmas Day as an otherwise working day because the stores were closed.

Why the ERA Ruled Against Lendco

ERA Member Jeremy Lynch stated that Lendco’s approach effectively denied workers their legal rights. The law does not allow employers to create extra conditions that make it harder for employees to receive public holiday pay.

The ERA said Lendco had repeated history because they had been warned before:

• 2015: Improvement notice for incorrect alternative holiday calculations
• 2016: Enforceable undertaking for annual leave payment failures

Although Lendco fixed those issues at the time, the ERA noted that similar problems later returned.

Message from MBIE

Katriona Ikenasio, a Labour Inspectorate Investigations Manager, said this case is a strong warning to employers.
Trying to find loopholes, shortcuts, or ways to avoid holiday pay will lead to consequences.

Penalties can include:

• improvement notices
• financial penalties
• serious reputational damage

What Happens Next

The ERA has ordered Lendco and the Labour Inspectorate to attend mediation.
This is to resolve any remaining issues related to the improvement notice.

What This Means for Workers in New Zealand

If you worked for Wendy’s under the previous owners and believe you were underpaid for public holidays or annual leave, this case shows that:

• You may have been affected
• The company has a legal obligation to assess and fix the errors
• Workers have strong protections under the Holidays Act

MBIE encourages anyone facing unfair treatment at work to contact 0800 20 90 20.

Simple Takeaway

The former Wendy’s operator:

• Broke holiday pay laws
• Tried to challenge MBIE’s order
• Lost the case
• Must now work with MBIE to fix the problem

This ruling reinforces that New Zealand workers must be paid fairly for public holidays and annual leave, and employers cannot create their own rules to avoid that responsibility.