Labour weekend surcharge warning for business

Photo / Rotorua Daily Post

The Commerce Commission is warning businesses not to mislead customers when applying a surcharge on goods and services ahead of this weekend's Labour Day holiday.

This comes after Spotless Services, the major provider of food and alcohol at Wellington's Rugby Sevens tournament, was found to be at risk of breaching the Fair Trading Act with the claim that a 15 per cent surcharge it imposed was due to the Holidays Act.

Spotless displayed signs at the tournament which read: "Please Note 15 per cent surcharge (Due to Holidays Act)".

A Commerce Commission investigation found that Spotless Services recovered significantly more from the surcharge than the actual cost of fulfilling its obligations under the Holidays Act 2003.

This was because many of the people serving food and alcohol at the tournament on Waitangi Day were either part of volunteer groups or casual staff and were not covered by the Holidays Act, the commission said.

"The Commerce Commission has no role to play in businesses' decisions whether to apply a surcharge on a public holiday. New Zealand businesses are free to determine the retail price for goods and services and they do not have to justify their prices to customers," said Kate Morrison, Commerce Commission General Manager, Enforcement.

"However, if a reason for a price is given, to avoid the risk of breaching the Fair Trading Act, that reason needs to be accurate and not misleading," said Morrison.

Court penalties for breaching the Fair Trading Act can include fines of up to $200,000 for a company and $60,000 for an individual.

Only the courts can decide if a representation has breached the Act.

- NZ HERALD ONLINE