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Penalties For Employment Breaches Upheld In Court

The Employment Court dismissed the challenge by Shalini Limited against penalties of $100,000 imposed by the Employment Relations Authority (ERA) for migrant exploitation.

Shalini was taken to the ERA by the Labour Inspectorate following employment standards breaches against seven migrant employees who worked as retail assistants at two liquor stores and one dairy owned by the business. In June 2019, ERA has ordered Shalini to pay $100,000 in penalties.

Shalini challenged the determination on three grounds. They claimed that the ERA suggested that Shalini’s director, Mr Reddy, was also a landlord, when in fact they were only a “go-between” the workers and the landlord, that ERA interpreted the company’s financial position and ability to pay incorrectly and that the ERA did not give considerable weight to the fact that Shalini has separately agreed to repay nearly $97,000 in minimum wage and holiday pay arrears to seven workers.

The Employment Court dismissed the challenges. It found that the penalties were appropriate given Shalini derived financial benefit from depriving vulnerable workers of their legal entitlements over a number of years.

“Many business and workers are finding themselves in difficult circumstances due to the effects of COVID-19. However, worker exploitation can never be justified,” says Labour Inspectorate Regional Manager Loua Ward.

“Not only does exploitation violate worker’s rights and their personal dignity, it also allows some businesses to gain a commercial advantage over employers who are committed to doing the right thing by their people and meeting their legal obligations. It also undermines New Zealand’s reputation as a good place to work and to trade with.

“The Inspectorate is concerned about non-compliance in the liquor retail industry and is working with sector leaders such as franchisors who need to audit and monitor their franchisees to uphold compliance with the law from the top down. The Inspectorate is also engaging with licencing authorities and liquor suppliers about their ongoing role to prevent exploitation within the industry,” Ms Ward says.

If you’re concerned about your employment situation or someone else’s employment situation, contact Employment New Zealand where your concerns will be handled in a safe environment.

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