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ARLA decision tips power balance for exploited workers in liquor retail

The decision to cancel liquor licences for five Canterbury liquor stores has been welcomed.

The Labour Inspectorate, part of the Ministry of Business, Innovation and Employment, welcomes the Alcohol Regulatory and Licencing Authority’s (ARLA) decision to cancel liquor licences for five Canterbury liquor stores owned by Nekita Enterprises Limited, and director Shereen Singh’s manager’s certificate, following worker exploitation uncovered by the Labour Inspectorate. 

In December 2020, the Employment Relations Authority (ERA) ordered Nekita Enterprises, and director Harjit Singh, to pay a combined total of $125,000 in penalties for operating a dual payroll system to avoid paying four employees the minimum wage for all the hours they worked and failing to keep accurate employment records for 59 employees. The case was taken to the ERA by the Labour Inspectorate, following employee complaints. 

The penalties were in addition to $21,390 that Nekita Enterprises had already paid out to those four former employees in outstanding minimum wage and holiday pay entitlements. 

Labour Inspectorate retail sector strategy lead Loua Ward says, “It is unacceptable for some employers to continually and intentionally breach employment law, undermining employees’ rights and undercutting other businesses. Poor treatment of workers should not provide a competitive advantage in any industry.” 

ARLA found that the employment law breaches by Nekita amounted to improper conduct and ruled that the business is unsuitable to hold a liquor licence. 

Director Harjit Singh who was found by ARLA to be the “directing mind and will of Nekita” had surrendered his manager’s certificate earlier. However, ARLA noted that if Mr Singh had not surrendered his manager’s certificate, it would have been cancelled. His wife and business partner Shereen Singh also had her manager’s certificate cancelled by ARLA. 

“This ARLA decision has shifted the balance of power as exploiters now risk being put out of business entirely. This decision sends a clear message that businesses that exploit their workers can lose their licences. We encourage liquor store workers who have been exploited by unscrupulous employers to come forward and seek advice from the Labour Inspectorate,” says Ms Ward. 

Immigration New Zealand applies a pragmatic approach for migrants who lose their jobs while on work visas that are tied to their employment and will work with them on a case by case basis to ensure that they can remain lawfully in New Zealand while they make alternative arrangements. 

Ms Ward says, “The Labour Inspectorate has been engaging with a group of liquor retail and supply leaders, including Liquorland, Super Liquor, The Bottle-O, DB, Lion and Asahi, to share ideas and information about worker exploitation within the sector, and how to work collectively and individually towards fixing this issue. 

“It is encouraging to see industry leaders taking a stand against exploitation and taking proactive steps to lift employment law compliance. For example, Super Liquor exited the stores run by Nekita Enterprises from their and have taken comprehensive steps to ensure there is no excuse for franchisees not meeting their obligations. 

“The majority of New Zealand employers want to do the right thing. Ensuring a level playing field is especially important for the labour market’s recovery from the effects of COVID-19.” 

The Labour Inspectorate encourages anyone concerned about their employment situation or the situation of someone they know to contact the Employment New Zealand service centre where concerns are handled in a safe environment.

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