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BP franchisee owes $250,000 for breaching employment law

11 April 2018

BP franchisee owes $250,000 for breaching employment law

Pegasus Energy Limited, which operated as a BP station in Hastings has been ordered to pay upwards of $132,000 in arrears to two ex-staff and $120,000 in penalties following a Labour Inspectorate investigation.

Labour Inspectorate regional manager Loua Ward says, “It’s alarming to see a franchisee operating under such a well-established brand mistreat and underpay their staff. Whether a company is a small business or a larger one such as this, the Labour Inspectorate will hold employers to account.”

“These employees were not paid the minimum wage, or holiday pay by sole director Jag Rawat. They were subjected to unlawful premiums being deducted from their pay and were at times working up to 16 hour shifts, with lesser hours falsely recorded in the business’s records.”

The seriousness of the breaches resulted in Mr Rawat being personally liable for a further $24,000 in penalties.

“The pair was made to live in accommodation provided by the employer and pay excessive amounts in rent, despite poor living conditions where they were required to sleep on the floor.

“The employees continuously received threats from Mr Rawat saying that he would cancel their visas and they’d be forced to leave New Zealand if they spoke up about the mistreatment. Mr Rawat also threatened trouble in the employees’ home countries on return,” says Ms Ward.

In evidence given to the Labour Inspector, the employees said they were subjected to working conditions that verged on slavery.

“We are always disappointed to find such blatant abuses of employment and immigration law in franchises such as this, and surprised these businesses aren’t doing more to protect their brands.”

“Underpaying and mistreating staff can reflect poorly on a business’s brand for years to come. Franchisors must take a stronger approach in ensuring those who they lend their company name to are paying their staff behind the counter what they are entitled to under New Zealand employment law.

“Migrant workers are vulnerable in New Zealand and may not always be aware of their rights, or may be taken advantage of, which we’ve seen in this case. Mr Rawat saw himself in a position of power, and used this to his employees’ detriment,” says Ms Ward.

Mr Rawat previously pleaded guilty to eight charges in the Napier District Court relating to falsifying immigration documents and misleading Immigration New Zealand.

MBIE encourages anyone concerned about their employment situation, or the situation of someone they know, to call 0800 20 90 20 where their concerns will be handled in a safe environment.


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