‘Master-servant’ ethos enables employer theft from staff: MP
New Zealand’s failure to criminalise wage theft by employers is a continuation of a master-servant “feudal” relationship, Parliament has heard.
Labour MP Camilla Belich is attempting to shepherd the Crimes (Theft by Employer) Bill into law, which would make it a crime for an employer to intentionally not pay or underpay workers.
An employer who intentionally decides not to pay a worker their entitlements can be chased for the money through the employment courts, but does not face criminal sanctions, Belich said at a hearing of the Education and Workforce Select Committee on Wednesday.
That contrasted with a worker caught stealing from an employer, who would face both civil penalties, including being fired, as well as being charged with theft by police, she said.
Belich said this was unfair, and harked back to the Victorian “master-servant” relationship, that persisted as an ethos underpinning employment law in New Zealand despite other countries like Australia and the UK criminalising it.
“Originally when people engaged people in their households, you had a master-servant relationship,” Belich said.
“You had a known unequal distribution of rights and powers. A lot of those traditional ideas about what’s acceptable in an employment relationship continue today, even though the nature of employment has changed.
“That’s one of the reasons we don’t have the same penalties for employers as we do for employees.”
Gayaal Iddamalgoda, legal adviser to the Council of Trade Unions, said: “The law has preserved feudal aspects of servitude in defining things that relate to employment.”
Not having criminal penalties for dishonest employers who intentionally underpaid workers was out of step with modern thinking, he told the select committee.
“Unlawfully withholding the things that workers are entitled to own and possess is theft in the most plain and literal terms as people understand it,” he said.
Professor Jeremy Finn from the New Zealand Law Society told the select committee that an employer who did not pay a worker for work done had not stolen anything.
They still retained the right to be paid, he said, even if the employer’s refusal to pay rendered it worthless.
“The core problem is this is not the theft of a tangible object; money. It’s a deliberate default on a promise to pay,” he said.
“The Law Society is deeply aware that this is a major problem, but is also of the view that this bill won’t solve it,“he said.
When challenged by Belich, Finn conceded it would be possible to draft a law that did criminalise wage theft.
He suggested one option could be to amend section 240 of the Crimes Act, which has criminal penalties for obtaining by deception.
The bill is a private members’ bill originally drafted by former Labour MP Ibrahim Omer before he lost his seat in Parliament at the last election.
Omer suffered wage theft as a new migrant to New Zealand 17 years ago, and told the select committee it was more widespread than many MPs believed.
“The evidence shows it is systematic. It’s deeply rooted. It’s a blood-stain on our country’s image,” Omer told the select committee.
Omer, who now works in the union movement, said: “It’s actually getting worse. It’s an every day practice. I spend about 40% of my time chasing up on lost wages for these low-paid vulnerable workers. It should not be the case.” Those most likely to suffer wage theft were migrant workers, and young workers, he said.
Non-unionised workers were unlikely to have the money, knowledge or skills to take a case to the employment courts to force their employers to pay, he said.
Without criminal sanctions for wage theft, there were effectively zero consequences for dishonest employers, he said.
National MPs have expressed concern that criminalising wage theft could result in employers being prosecuted for honest mistakes.