A New Zealand medicinal cannabis firm, part-owned by Kind Medical parent Altum International, has been ordered to pay its former technical officer NZ$240,000 after he went without a salary for almost two years.

Kariki Pharma failed to pay wages to Alexis Lopez in July 2020 and from November 2020 until he resigned in July 2022, a tribunal ruled. It also failed to pay holiday or Kiwisaver entitlements.

At an Employment Relations Authority judgement last week, Kariki was ordered to pay Lopez $193,153 in wages, $13,939 holiday pay, $5,936 in Kiwisaver contributions and $20,000 in compensation for “hurt and humiliation”.

The company was also told to pay a penalty of $10,000, 75% of which will go to Lopez.

In the event of Kariki being unable to pay, Lopez has leave to pursue four directors named in proceedings for the money, which include Altum chief executive Ean Alexander. The other three were Alexandra Seton, Paul Seton and Andrew Steadson.

Altum International, through its wholly-owned entity NTHC, is a 48% shareholder in Kariki.

The hearing heard that Lopez initially received his salary when he joined the company in late 2019. But as the firm struggled financially, he agreed to be paid in shares in August, September and October 2020. He received no further payment until he quit in mid-2022.

Directors of the firm argued that Lopez, who had moved his family from Vietnam to take the role, had verbally agreed to defer payment of his salary until Kariki Pharma had received NZ$2.5m from an investor with whom the firm was in talks.

They said Lopez did not raise the issue during board meetings, taking his silence to mean he was fully aware of, and in agreement with, the situation.

Lopez denied that was the case, insisting he brought up the issue of his non-payment and unsuccessfully attempted to negotiate agreements.

He said statements concerning Kariki’s financial position and that “no further liabilities were being incurred” referred to other creditors, not his own personal situation.

During the hearing, Lopez said he had invested $140,000 in the business – other family members had also invested – but he became increasingly disillusioned about events, before resigning soon after the potential investor died in 2022.

In her judgment, Claire English from the Employment Relations Authority, said there was “no evidence” that Lopez had agreed to defer payment of salary.

She found all four directors were involved in a breach of employment standards and that Lopez was constructively dismissed.

“Mr Lopez has personal grievances for unjustified dismissal and unjustified disadvantage,” English said.

However, the tribunal dismissed Lopez’s submission that he should also be paid for the three months in 2020 where he accepted shares in lieu of salary.

English said in her ruling: “I do not agree that he should now be able to claim salary for those months simply because it has now become clear over time that this was a bad bargain.”

Alexander said in a statement to Cannabiz that Kariki Pharma was “considering its options” in relation to the tribunal’s decision.

“It is a dispute arising in respect of payments to the sole employee of a company, in which Altum is a non-controlling shareholder,” he said. “The company’s view is that the employee agreed to defer payments contingent on a mandated fundraising, a transaction that ultimately failed due to the death of the investor.

“After taking advice, the company participated in a process in accordance with NZ law and, having received a determination, is considering its options.”

Kind Medical was named Best Place to Work at the Cannabiz Awards in May this year.

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...

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