A Te Puke horticultural services company and its director have been ordered to pay $135,000 in penalties after "flouting" minimum employment standards for four migrant workers.
Dosanjh Horticulture Limited was ordered to pay $90,000 in penalties and its director, Jatinder Singh, was ordered to pay $45,000 after the Employment Relations Authority found the company in breach of the minimum standards.
As part of its decision, the authority ordered that $20,000 of the penalties be paid directly to the affected workers who had been contracted by the company.
The company and its director were involved in a wage "banking" arrangement resulting in workers in the kiwifruit sector not receiving all of their lawful entitlements, The Ministry of Business, Innovation and Employment said.
There were also failures to keep accurate employment records and correctly calculate leave entitlements. Workers with contracts guaranteeing them minimum hours were routinely required to work unpaid hours to offset time they had previously been paid for but not worked.
In addition, one worker was made to pay a premium of $4500 for his employment with the company.
Employment Relations Authority member Sarah Kennedy-Martin said the breaches were serious and affected vulnerable migrant workers over an extended period.
"Migrant workers are entitled to be treated with respect in the New Zealand workforce and they can be particularly vulnerable because of their migrant status," she said.
"The workers’ dependency on the employer was high and the employer controlled all aspects of the employment relationship. This included the structuring of payroll and record-keeping systems to obscure underpayments, coupled with unlawful deductions and failure to meet basic entitlements such as sick leave and public holiday pay."
The total amount of arrears owed to the four workers was $61,312, which the company agreed to pay prior to the Employment Relations Authority hearing.
Investigation prompted after complaints to Zespri
The Labour Inspectorate was alerted to the breaches after workers complained to Zespri, the industry body that markets kiwifruit internationally.
Following an investigation, Zespri cancelled Dosanjh Horticulture's Compliance Assessment Verification, making it impossible for the company to operate in the kiwifruit industry because Zespri would not market any fruit from orchards for which they had supplied labour.
The Labour Inspectorate's lead inspector, strategic alignment Kevin Finnegan said the case highlighted the importance of employers meeting their legal obligations and ensuring workers receive everything they are entitled to under New Zealand law.
"This company and those who owned it are well-known in the kiwifruit industry, which makes their flouting of minimum employment standards all the more unacceptable," Finnegan said.
"These were vulnerable workers and they were entitled to be paid correctly and to have accurate employment records maintained. Instead, a system operated that resulted in minimum employment standards not being met.
"While the arrears were repaid, employers cannot contract out of minimum employment standards. Record keeping, leave calculations and wage payments must all comply with the law."
Finnegan said the failure to comply with New Zealand’s employment standards had serious consequences for the company and Singh.
"Not only did they lose the ability to operate in the kiwifruit sector, they have also been ordered to pay significant penalties," he said.
"This should serve as a warning to others in the industry. Employers who fail to meet their obligations under New Zealand employment law risk significant financial, commercial and reputational consequences."
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