Crack-down Continues for Non-compliant Employers

Last year saw several Labour Inspectorate audits and/or investigations in relation to employment law compliance and worker exploitation.

Many of these cases resulted in successful penalties being awarded against businesses and/or directors who were subsequently found to be in breach of minimum employment standards.

A summary of some the key cases and/or compliance crackdown initiatives is set out below:

• Labour Inspector v Asad Horticulture Limited (in liquidation): This case involved a labour supply company to the kiwifruit industry and its sole director being found in breach of minimum employment standards. The company was ordered to pay $70k and the sole director/shareholder ordered to pay $30k penalties.
  
  
• ‘Operation Poplar’: MBIE teams conducted a joint agency operation by visiting dozes of businesses in Hanmer Springs in a major compliance crackdown, which followed allegations of migrant worker exploitation in the town.  The investigations and/or enquiries are on-going.
  
  
• Labour Inspector v A W & B L Mudaliar & Co Ltd and Ors: A company operating a dairy, trading as ‘Piopio Superette’, was ordered to pay a penalty of $10k, while the directors, a husband and wife, were ordered to pay penalties of $3k each.
  
  
• Labour Inspector v Dilkhush PVT Ltd and Ors: An employee complained he was required to pay an unlawful premium to secure a job at a restaurant. A Labour Inspectorate investigation followed, which found a series of other breaches and following legal proceedings in the Employment Relations Authority, the company and its two directors were ordered to pay over $90k in arrears, penalties and legal costs.
  
  
• MAH Enterprises (Fiji) Ltd v A Labour Inspector: A company unsuccessfully challenged an order made by the Employment Relations Authority to the Employment Court against it and its director - to pay $64k and $32k respectively - for various breaches of minimum employment standards. The challenge was dismissed by the Employment Court and the company/the director was ordered to pay an additional $9,799.00 in legal costs for their failed application.
  
  
• Checks on Queenstown Businesses: Teams from MBIE conducted a joint agency operation, visiting 11 hospitality and retail businesses in Queenstown following complaints. The checks resulted in some infringement notices being issued and deportation notices due to workers not complying with the conditions of their visas. Some of the investigations and/or enquiries are on-going.
  
  
• Labour Inspector v Alam Horticulture (2017) Limited and Anor: This company and its director were ordered to pay $32k and $16k in penalties respectively. In addition, the Labour Inspectorate’s report noted that the director had been banned from directorship and management of any business yet was involved in the day to day running and operations of the business.

You can find more information out about the above, including other cases here: https://www.employment.govt.nz/news-and-updates

The key takeaway from this information is usefully summarised by Katriona Ikenasio, Retail Sector Lead for the Labour Inspectorate:

• “Employers cannot afford to cut corners when it comes to adhering to this country’s employment law. These laws have been put in place to protect both employers and employees, so, it is important business owners and managers understand their responsibilities in this regard.”

Employers Assistance provides employers with tools, information and guidance to help them understand and comply with New Zealand employment law, put the correct processes in place and be informed about their legal obligations, so they can reduce the risk and stress associated with the employment law minefield & non-compliance.