A New Plymouth restaurant business and its two directors have been ordered to pay $86,500 in wages arrears and penalties by the Employment Relations Authority (ERA) after breaching numerous minimum employment standards.

The order made by Authority Member Geoff O’Sullivan followed an investigation by the Labour Inspectorate in August 2021 after a worker complained he had been made to pay for his job at the restaurant.

During the investigation, the Labour Inspector identified five workers – four of whom were migrants  – who had been affected by the breaches committed by the business, Dilkhush Pvt Limited (trading as Area 41 Restaurant and Bar), and its directors Jaswant Singh Dham and Pushkar Tunnare.

The affected employees were on visas, two of whom were visa dependent on Dilkhush Pvt Limited (DPL).

Among the breaches were:

• demanding a premium of $16,900 from a worker
• underpayment of holiday pay
• not paying minimum wage
• making a worker repay a portion of his wages each week
• inadequate record keeping.

Between 31 January 2020 and 29 July 2021, the directors forced one of the workers to repay between $200 and $300 a week from his wages because they were not prepared to pay him the $21 an hour required to meet visa requirements set by Immigration New Zealand. The total amount the worker repaid to his employers was $8,900.

The worker also told the inspector he had been paid for 40 hours work per week but often worked more hours for which he had not been paid.

Exploited workers

Simon Humphries, Head of the Labour Inspectorate, said DPL and its two directors “had taken advantage of their relationship with the vulnerability of the workers’ situation by intentionally failing to provide them with their minimum entitlements, thereby gaining financial advantage.”

DPL, Dham and Tunnare accepted they were guilty of the breaches and responsible for repaying the workers the outstanding amounts owed to them. They also accepted that they had failed to keep wage, time, holiday and leave records for two of the workers.

Mr O’Sullivan said the wages arrears owed were significant. “Indeed, they are higher than the amount now claimed because DPL has repaid some of the illegal premium and some of the other arrears, however there is still outstanding arrears of some $26,587.88.”

He ordered:

• DPL and its directors to pay the arrears of $26,587.88
• DPL pay a penalty of $40,000
• Dham and Tunnare jointly pay a penalty of $20,000.

He also ordered that $3,000 of the penalty amount was to be paid to the worker forced to pay a premium for his job.

Egregious example

Mr Humphries said that forcing an employee to pay a premium for the right to have a job was an “egregious” example of an employer exploiting the power imbalance of an employment relationship.

“The fact these employers accepted they had broken the law and have repaid some of what they owe these workers does not excuse their exploitative behaviour.”

• MBIE encourages anyone who thinks they or someone else has been treated unfairly in the workplace to contact our 0800 20 90 20 contact centre number where their concerns will be handled in a safe environment.

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