Home Detention for Business Owner Guilty of Exploiting Immigrant

There has been a number of cases recently taken against employers who have failed to meet the minimum employment law requirements – mainly failing to ensure they pay minimum wage and comply with holiday leave entitlements.  Two such notable cases are BP2Go Service Station in the Hawkes Bay owned by Mr Rawat, and Manukau Auto Valet Ltd in Auckland owned by Mr Kumar.

BP2Go service station case involved two Indian immigrant workers in the Hawkes Bay who worked for Mr Rawat for two years. Mr Rawat, was prosecuted in the District Court on four counts of providing false or misleading information to the workers and two charges of exploitation.  Mr Rawat was sentenced to five month’s home detention after pleading guilty to the charges.   In addition to the charges in the District Court, Mr Rawat is still to appear in the Employment Relations Authority regarding the minimum employment standards where he will likely be required to pay back the money owed to the two employees and possibly face fines on top of the five-month’s home detention.

The second case, Manukau Auto Valet Ltd, involved 122 employees over a six-year period where Mr Kumar failed to ensure the minimum wage was paid to employees along with holiday pay when employees finished working for him. Mr Kumar has paid $96,451 to the Ministry of Business, Innovation and Employment to pay to the affected employees. On top of that the Employment Relations Authority imposed a penalty of $145,000.

There are a number of learnings from these two cases:

• The Ministry of Business, Innovation and Employment is serious about prosecuting employers who do not meet the minimum employment standards. The Labour Inspectorate Regional Manager, Loua Ward, said “The Labour Inspectorate takes these kinds of breaches very seriously as not only did the employer breach the rights of the people working for them, they also attempted to gain an unfair advantage over their law abiding competitors.”
• Ignorance of the law will not help an employer escape from repayments or fines. The Employment Relations Authority member who heard the Manukau Auto Valet Ltd case stated: “it is the obligation of all employers to understand and adhere to the law.” Accordingly, ignorance is not a mitigating factor.
• Migrant workers have the same employment rights as all other workers in New Zealand. It should also be noted that the Ministry of Business, Innovation, and Employment recognises that migrant workers are a vulnerable group of workers and addressing exploitation of them is a priority for the Ministry.
• Avenues for addressing the exploitation of vulnerable employees and the failure to meet the legal minimum employment standards can be through both the District Court and the Employment Relations Authority.

If you have any questions regarding minimum employment standards, please don’t hesitate to contact us at ChapmanER.