Ban on hire of migrants affects 70 businesses

"The onus is on employers to correctly provide their employees with all their minimum entitlements – ignorance is not an acceptable excuse."

Loua Ward, Labour Inspectorate

Car dealers, restaurants and seasonal employers are among 70 businesses banned from hiring migrant workers for breaching labour laws in the past six months.

Businesses that fail to comply with employment rules face a stand-down period preventing them from employing migrant workers for up to two years, following a law change that took effect in April.

Breaches include failing to give employment contracts, underpaying staff and breaching the Holidays Act.

Transport giant Mainfreight suffered a six-month ban that will end later this month for failing to provide employment agreements to three employees.

Mainfreight managing director Don Braid criticised the Labour Inspectorate’s investigation because none of the three employees were migrant workers.

Braid said Mainfreight had to suspend an exchange programme under which it brought overseas team members to New Zealand – despite the affected employees being New Zealand citizens – because of the stand-down.

Employment law advocate Nathan Santesso said the law change was an improvement, but there were numerous cases that regularly went under the radar because of a shortage of Labour inspectors.

‘‘There are so many cases of exploitation that happen non-stop. What I’d really like to see is Labour inspectors having systematic checks of businesses rather than waiting for complaints.’’

A spokesperson for the Ministry of Business, Innovation and Employment said inspectors did regular checks on businesses if they had reason to believe an employer had breached labour laws.

One of the cases Santesso advocated for was a former employee of Urban Turban who was paid $2 below the minimum wage.

In June the Auckland restaurant was ordered to pay $40,000 and has been banned from employing migrant workers for one year.

Repeat offenders BBS Horticulture and Direct Auto Importers incurred the longest stand-downs.

BBS Horticulture was fined $57,000 for failing to keep correct wage and time records.

The inspectorate first visited BBS in 2013 and found workers were in breach of their visa conditions, and without records of employment.

When the inspectorate visited in 2015 for a follow-up audit, it found the company was again unable to supply wage records.

A third visit in 2016 found 11 Chinese workers – one working in breach of a visa – who had no individual employment agreements or timesheets.

Hamilton car company Direct Auto Importers was ordered to pay more than $65,000 in penalties over employment breaches.

Sole director Vishaal Sharma claimed that employees were contractors and denied he owed them their minimum entitlements – a claim rejected by the inspectorate and the Employment Relations Authority (ERA).

Sharma was unavailable for comment but told in July he was in talks with his lawyer about an appeal. ’’We’ve heard some of the points in the decision and don’t think they line up,’’ Sharma said then.

Labour inspector Loua Ward said Direct Auto Importers had previously been taken to the ERA last year by an employee who successfully claimed $17,996 in arrears. ‘‘The onus is on employers to correctly provide their employees with all their minimum entitlements – ignorance is not an acceptable excuse.’’