Dotcom settled with two household staff after ERA ordered payment of lost wages

(Updated)

Kim Dotcom's lawyer says the internet entrepreneur has reached a confidential agreement after being ordered by the Employment Relations Authority to pay nearly $26,000 in lost wages to his former butler and another staff member who worked as a personal assistant to his wife.

Three of Mr Dotcom's former employees claimed they were unjustifiably dismissed and owed wages by him and took their cases to the Employment Relations Authority in 2014.

In a ruling released last year, ERA chief James Crichton upheld two of the complaints for unjustified dismissal, although awarded much less than they were seeking, and dismissed the third. The employees and Mr Dotcom appealed the authority's determination to the Employment Court.  Since then Simon Cogan, a lawyer from Anderson Creagh Lai, says the employees and Mr Dotcom "resolved their disputes" on confidential terms.

The Filipino staff involved were Dotcom’s former butler Panfilo Orduna Junior, Mona Doctom’s personal assistant, John Tactaquin, and Ruth Relleve, who was hired as a personal assistant/butler. All three were paid in Hong Kong dollars and their employment included board and lodgings.

The police raided Doctom’s rented mansion north of Auckland in early January 2012 and his assets were frozen while Mr Dotcom spent a month in jail.  All the parties agreed that after the raid, money became tight and there were difficulties paying some or all of the salaries of household staff.

According to Mr Orduna, at the time of the raid there were about 45 household staff of a total 90 employees for the whole operation. Because of the financial difficulties, a large number of staff left, with four security guards, two body guards, and nine of the household staff electing to remain.

All three staff members who took cases to the ERA said Mr Dotcom had promised if they stayed in his employ for two years from the date of the raid, they would be paid a bonus of $NZ25,000.

Mr Orduna was paid $HK20,000 a month as a butler and required to work a six-day week, with provision for the employer to change his hours of work.

Mr Orduna claimed one consequence of the dramatic staff reduction was the need to work extended hours, and in his own case working without pay for very long hours, seven days a week.

He gave evidence that, because of what he described as Mr Dotcom’s “very erratic sleeping pattern” – regularly working all night and sleeping by day, he regularly worked more hours than stated in the employment agreement.

Mr Dotcom gave evidence that he told staff their salary rates would return to normal once the financial situation improved but didn’t make any promises as to when this would occur or to pay for any additional hours worked. He also didn’t accept that staff members such as Mr Orduna were working the sort of extensive hours claimed.

The former butler was fired on the spot after he approached Tony Lentino, a former business partner of Mr Doctom, for a job.  Mr Orduna had also been involved in a TV3 programme about working for Mr Doctom which the internet entrepreneur claimed as an example of staff “dishing the dirt” on him. Mr Orduna’s employment agreement included an explicit confidentiality provision.

Mr Crichton found despite contradictory evidence over his dismissal,  Mr Orduna had lost wages directly because of the personal grievance he suffered. His income dropped from $3400 a month in New Zealand to just $405 a month in the Philippines. He sought a total of $61,950 but was awarded only $8850, being three months' salary of the difference between what he would have earned working for Mr Dotcom and what he earns now.

The other two cases

Mr Tactaquin he was employed on a similar basis from 2011 as a personal assistant to Mona Dotcom. He claimed to have worked longer hours after the raid before being dismissed as he was about to go on holiday.  However, Ms Dotcom gave evidence that he hadn’t been dismissed but had left of his own volition.

Mr Tactaquin claimed nearly $360,000 for unjustified dismissal at a level far in excess of anything the authority has awarded in its history, along with unpaid wages and bonus.

The ERA ruling found on the balance of probabilities Mr Tactaquin didn’t work the hours he claimed but was entitled to compensation for unjustified dismissal.  He earned $5842 a month when employed in the Dotcom household but earns only $624 monthly in a new job in the Philippines.

He was awarded $17,526, which equates to three months' salary on the difference in that income.

Ms Relleve claimed she was working at least 16 hours a day seven days a week though this was denied by her employer. She also claims to have been “bullied and harassed” by Ms Dotcom in particular and that her resignation was, therefore, a forced termination but the ERA found “ample evidence Ms Dotcom and Ms Relleve were on good terms both before, during, and after the employment ended and there is email traffic to confirm that.”

Mr Crichton concluded she had left of her own free will and wasn’t persuaded she was due any overtime payment.