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Company Ordered to Compensate Accountant Despite $30k Mistake

A recent ruling by the Disputes Tribunal has sparked controversy as a company finds itself compelled to pay a newly hired accountant, despite substantial financial losses attributed to his performance. The unnamed company, embroiled in a legal battle with a recruitment agency, faced the tribunal's decision to settle unpaid wages for the accountant, totaling $14,000.

Initially hired in 2022 for a temporary role, the assistant accountant's contract was later extended before being terminated. However, the company disputed payment for the accountant's services, citing substantial financial losses totaling $30,000 allegedly caused by his mistakes.

Amidst claims of misrepresented abilities and negligence in vetting procedures, tribunal referee Elizabeth Paton-Simpson sided with the recruitment agency, emphasizing the company's responsibility in extending the accountant's contract despite reported issues with his work.

The company contended that the accountant failed to fulfill assigned tasks, engaging instead in personal study during his final weeks of employment. Allegations included negligence in account management, erroneous financial entries, and unfavorable foreign exchange contracts, all contributing to the company's estimated losses.

Despite the tribunal's acknowledgment of the accountant's shortcomings, Paton-Simpson emphasized the contractual obligation to remunerate him, barring evidence of non-work-related activities. Citing contractual clauses, she dismissed the company's counter-claim, directing them to settle the accountant's outstanding salary.

This ruling underscores the importance of due diligence in recruitment processes. Bad Hire stories are everywhere. Even if we haven’t had one ourselves we know a whole handful who have.

There is value in having robust procedures when hiring staff and when it comes to performance management. Knowledge and skills testing prior to employment, even for a temporary role, would have highlighted the accountant's short comings. Moreover, a personality test would have shown the accountant's characteristics in terms of ethics, relationships, thinking and coping. These test results will help assess work ethic, but also raise any red flags.

Testing offers a pre-employment solution; an opportunity to avoid a bad hire, before you hire them. Check out our tests here.

Article re-written for Accountests, based on the original article by Jeremy Wilkinson for the NZ Herald found here.


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Donna Roughan  |  With 22 years of expertise in accounting and business advisory, Donna has held pivotal roles, notably as a Director at PwC, and has executive experience in both finance and operations.

Accountests  |  Accountests deliver the world’s only online suite of annually updated and country-specific technical skills, ability and personality tests designed by and for accountants and bookkeepers. 
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