ERA claims jurisdiction over unlawful premium paid on foreign soil
- 4 hours ago
- 2 min read
The Employment Relations Authority has ordered a lawn mowing service company called 7 Solutions Ltd to pay its former employee, Gurdeep Singh (GS) $44,750, plus a $8,000 penalty against its director, as reimbursement of an unlawful premium.
The Authority also ordered 7 Solutions Ltd to pay a $16,000 penalty to the Crown.
What the Authority assessed as being an unlawful premium was made up of five payments over a two month period in 2023, in a complex arrangement that must have been difficult for the Labour Inspectorate and Authority to unravel (the Inspectorate and the Authority both come under the Ministry of Business, Innovation and Employment).
The five payments to three different parties were $5,260, $16,000, $7,100, $13,415 and $7,485, a total of $49,260, of which $44,750 was found to be an unlawful premium. The first payment was found to be mostly unrecoverable because $4,510 of it appeared to relate to the cost of a work visa.
While the payments were made in rupees on Indian soil, the Authority found:
[46] Although the payment was from an Indian bank account, in and of itself this is not a jurisdictional impediment to the application of the [Wages Protection Act].
When determining the penalty, Authority Member Simon Greening noted:
[102] I have taken into account the fact that 7SL has not been subject to a Labour Inspectorate investigation previously… On the other side… I have considered who initially received the payments, which potentially goes to the issue of concealment.
The penalties awarded were 80% of the maximum.
If 7 Solutions Ltd does not, or cannot pay, then its sole director Kamal Jeet Singh is on the hook for repayment of the unlawful premium (but not the $16,000 penalty) under Section 142Y:
[126] (b) If 7SL does not pay the sum of $44,750 to the Crown (Labour Inspectorate) within 28 days of the date of this determination, then the Inspector can recover the sum of $44,750 from [Kamal Jeet] Singh personally.
We believe that a precedent has been set, and what this means is if a transaction happened in another country, and that transaction was found to be unlawful in New Zealand where the employment relationship started (and ended a year later in this case), then the transaction can be unwound under New Zealand employment law.
There will always be people keen to migrate to New Zealand for work. But just because some migrants are able to be exploited by unscrupulous employers at a particular time, it doesn’t mean that they can hold onto their ill-gotten gains, especially if the Labour Inspectorate gets called in.
And how many lawnmowers would $44,750 have bought, readers?
Tristam Price, Editor
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