Workers’ exploitation leads to hefty fines

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The Employment Relations Authority (ERA) has ordered a Waikato company and its sole director to pay respectively $25,000 and $12,500 for exploiting six staff.

The underpayment was more than $17,300.

A Labour Inspectorate investigation found that Jagran Property Services Limited (Jagran), owned by Jagendra Prasad, failed to pay minimum wage and holiday pay, keep accurate records and charged an employee a premium to have a work visa.

Employment Law breached

Jagran operates a Crew Care Commercial Cleaning and Green Acres Mobile Care Valet in the Waikato and differing employment breaches were found across six of Jagran’s employees.

Labour Inspectorate Regional Manager Natalie Gardiner said, “Our investigation into Jagran came from an employee’s complaint that she was not receiving wages that she had to make a payment to support her work visa.

“We then undertook an investigation into Jagran’s employment practices and found further breaches affecting five other employees. These breaches left employees out of pocket and one employee concerned about her visa status. While arrears have now been paid, the employee that made the complaint was made to survive for an extended period of time with little earnings for many hours of work. This non-compliant business model meant Jagran’s employees were exploited while his business benefitted.

Work ethos in New Zealand

Ms Gardiner said this also sends a strong message for larger companies or franchise operations. Non-compliant business models should be monitored from the very top of the supply chain. It is important that businesses are able to provide assurance to consumers that their operating model has its workers’ treatment at front of mind.

“Cleaners are around us every day but can often be an invisible and the most vulnerable workforce.  Cases like this should send a message to consumers to think carefully about worker pay and conditions when hiring a service such as home or office cleaning. Treatment of workers like this undermines the New Zealand ethos of a fair day’s work for a fair day’s pay. It also puts law abiding businesses at a disadvantage and they cannot compete on prices,” she said.

Vulnerable Section

Migrant workers are a particularly vulnerable section of the workforce, as they are less likely to be aware of their rights and entitlements and can be concerned regarding their visa status.

“Migrant workers have the same employment rights as all other workers in New Zealand, and the Inspectorate works with Immigration New Zealand and other government agencies as part of a whole-of-government approach to combat migrant exploitation,” Ms Gardiner said.

The Ministry of Business, Immigration and Employment (MBIE) encourages anyone who has information or is concerned about minimum standards or visa conditions not being met to phone the Ministry’s service centre handled in a confidential manner on 0800-209020.

Additional Reading: Our Editorial, ‘Exploitation of migrant workers must stop’ on Page 12.

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