Workers who pay to have a job
Exploitation of vulnerable staff in this way is all too common.
OPINION: It seems pretty simple that the wage-work bargain means that an employer pays an employee to provide services for them.
Unfortunately, there are some employers who do not appear to understand this straightforward transaction.
One such employer is Educasia Media, the owner of a small Hamilton newspaper called the
which demanded a $50,000 premium from a prospective employee, Huizi Shu, in return for a job.
Shu agreed to pay the money, which she obtained from her parents in China. The money was then used by the company to cover Shu’s wages. This effectively meant that Shu was paying herself to work for Educasia.
A year into the employment relationship, Shu resigned and asked for the premium to be refunded. The company refused and said it was only prepared to pay Shu $17,000 if she could find another employer to pay a premium for her.
Educasia’s actions came to the attention of the labour inspectorate which pursued a number of claims against the company in the Employment Relations Authority.
It should come as no surprise to learn that Educasia’s requirement for a $50,000 premium was found to be unlawful.
And as all of the wages received by Shu came out of that premium, the authority also concluded that the company had not paid her the minimum wage or holiday pay.
The authority also found that a number of other employees of Educasia had not been paid correctly.
All told, Educasia was ordered to pay $54,000 in penalties,
$37,149.99 in backpay ($27,766.80 of which was to Shu) and to repay the
$50,000 premium.
It was also banned for two years from sponsoring new visas to recruit migrant labour.
This case is one of the more extreme examples of an employer exploiting a vulnerable worker, and the authority’s view of Educasia’s conduct was clearly reflected in the level of the penalties ordered.
Sadly, situations where employers seek to extract premiums from employees in return for employment are far too common.
And with the number of labour inspectors expected to swell under the new Government, it is likely that cases of this nature will continue to be exposed over the next few years.
Although cases involving vulnerable or migrant workers tend to attract a lot of attention, they are not the only situations where employers have sought to extract unlawful premiums.
One such case involved LJS Employment, which operated a fish and chip shop, and its employee, Janine Matthews.
Matthews was not required to pay anything to the company to get her job.
However, her employment agreement with LJS provided that if she left within two months, she would repay one week’s ordinary pay as a reimbursement towards training costs.
Matthews resigned after just over a month.
In reliance on its employment agreement, LJS brought a number of claims against her in the Employment Relations Authority including a claim for reimbursement of the training costs.
LJS told the authority that the training costs it was seeking reimbursement of related to teaching Matthews to cook fish and chips the ‘‘company way,’’ as well as training she received in cutting fish, preparing food, opening the shop, cashing up, cleaning and serving.
The authority did not have much sympathy for LJS and took the view that the training was simply normal, on-the job training. It concluded that the clause in the employment agreement requiring repayment of training costs amounted to an unlawful premium and could not be enforced.
That is not to say that an employer can never enter into, and enforce, an agreement with an employee to repay training costs.
However, the cases where employers are successful all tend to involve the employer paying for the employee to undertake specific external training, which the employee receives some personal benefit from.
The fish and chip case is obviously nowhere near as bad as Educasia’s blatant exploitation of its workers.
Nonetheless, it is genuinely shocking that some employers think that they can get away with this type of behaviour.
It is genuinely shocking that some employers think that they can get away with this type of behaviour.
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