Investigation and findings
Dosanjh Horticulture Limited (DHL) was ordered to pay $90,000 in penalties and its director, Jatinder Singh, was ordered to pay $45,000.
As part of its decision, the Authority ordered that $20,000 of the penalties be paid directly to the 4 affected workers.
The Labour Inspectorate became aware of the breaches after workers complained to Zespri, the industry body that markets kiwifruit internationally.
Following the Inspectorate’s investigation, Zespri cancelled DHL’s Compliance Assessment Verification.
This made it impossible for the company to operate in the kiwifruit industry because Zespri would not market any fruit from orchards for which DHL had supplied labour.
Employment breaches
The case involved a wage "banking" arrangement that resulted in workers not receiving all of their lawful entitlements, as well as 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.
The total amount of arrears owed to the four workers was $61,312, which the company agreed to pay prior to the ERA hearing.
Labour Inspectorate response
Kevin Finnegan, the Labour Inspectorate’s Lead Inspector, Strategic Alignment, said the ERA decision highlights 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".
"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".
Consequences for the company
Mr. Finnegan said the failure to comply with New Zealand’s employment standards had serious consequences for the company and Mr. Singh.
“Not only did they lose the ability to operate in the kiwifruit sector, they have also been ordered to pay significant penalties."
“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”.
Authority findings
- Authority Member Sarah Kennedy-Martin found that the breaches were serious and affected vulnerable migrant workers over an extended period.
- She said one worker was made to pay a premium of $4,500 for his employment with the company, describing this as a further feature demonstrating the extent of the employer’s non-compliance with minimum employment standards.
Impact on migrant workers
She said the workers were in a vulnerable position due to having their visas tied to the employer. “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."
“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".
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