Employment Court – Breaches of minimum employment standards – Penalties – Banning orders
At issue was:
- Whether the Court should impose penalties on the four employer companies (the employers) and their director for breaches of minimum employment standards, and if so, for what amount.
- Whether the Court should impose banning orders against the employers and the director, and if so, for how long.
The four employers operated multiple liquor stores in Bay of Plenty. The employers all had the same director. A Labour Inspector investigation found that the employers had committed numerous breaches of minimum employment standards against four employees during a four-year period. The employers breached the Employment Relations Act (Act), the Holidays Act 2003, the Minimum Wages Act 1983 and the Wages Protection Act 1983. The breaches included:
- failing to pay the employees their minimum wages for all hours worked
- seeking unlawful premiums
- breaching employment record keeping requirements
- failing to consistently provide statutory leave and holiday entitlements
- failing to pay the statutory entitlements for working on public holidays
- failing to provide compliant individual employment agreements
In an earlier decision, the Court made declarations of breaches of minimum employment entitlements against the employers and the director:
The employers had since paid all the arrears owed to the employees.
In this decision, the Court considered whether to impose penalties and banning orders against the employers and the directors, for the same breaches. The Labour Inspector sought total penalties of approximately $3.2 million and banning orders against the employer and the director.
The Court held that the penalties against the employers and the director were warranted (see para 19). In determining the final amount, the Court explained:
- The case involved serious and sustained breaches of minimum employment standards over a period of four years. The evidence showed the breaches were “the result of a deliberate course of conduct” (see paras 108, 257).
- The case involved “systemic and deliberate exploitation of migrant workers”. The director “had showed no remorse or insight into his actions” (see paras 120, 254).
- The payment of arrears “was not evidence of contrition” (see para 119).
- The employer “obtained significant commercial benefit from their unlawful conduct and caused material loss and harm to the employees involved” (see paras 257).
- The record keeping failures “significantly contributed to the financial disadvantage suffered by the employees” (see para 115).
- Imposing banning orders was “appropriate” in light of the severity of the breaches and the risk of repetition. Prospective employees should be protected from the employers and the director (see para 254).
The Court imposed:
- $1,544,075.00 in penalties on the employers and the director (see paras 220, 259)
- two-year banning orders against the employers (see paras 256, 261)
- a three-year banning order against the director (see paras 256, 261).
Labour Inspector v Samra Holdings Ltd t/a Te Puna Liquor Centre [2022] NZEmpC 234 [PDF