Unlawful premium paid overseas is within NZ’s employment jurisdiction
Four directors of two in-liquidation companies are on the hook as alleged migrant exploiters. A judgment of the full Employment Court found that:
“[Section] 12A of the Wages Protection Act 1983 appl[ies] in respect of a premium sought or received by an employer (prospective or otherwise), or a person engaged on behalf of an employer (prospective or otherwise), for the employment of a person in New Zealand, if all or any part of that transaction is made outside of New Zealand."
We published an article about a similar matter in June:
That matter [2026] NZERA 330 Labour Inspector v 7 Solutions Ltd & Singh was cited in the latest judgment of the full Court.
A 2003 matter that was also cited, Mehta, went the other way. But a lot has changed since then:
[60] In general, we agree with counsel for Community Law and the Labour Inspector that the Court must take an ambulatory approach to interpreting s 12A, and consider that Mehta may best be seen as a creature of its time. As the Legislation Act 2019 states explicitly, legislation applies to circumstances as they arise. Mehta was decided in 2003. Modern circumstances, such as offshore pay-to-work schemes, international recruitment pipelines, and debt bondage, were less prevalent and not considered in that judgment. Those circumstances require a different approach to the interpretation of s 12A than may have been appropriate in 2003.
The term “migrant exploiter” is not used flippantly – as the Court found:
[9] The way in which offshore payment arrangements operate in practice is to secure debt bondage. As one deponent says, the geographical location of a premium payment is not an accident; it is a calculated feature of the exploitation model, designed to evade domestic regulation and to trap vulnerable workers in debt bondage before their employment even begins. In this regard it is not uncommon for payment to be made offshore, in cash or by bank deposit, often in instalments, and received by a third party intermediary rather than the employer directly. The intermediary is often a relative, associate, or informal contact of the employer (or its director), or a person operating through family, regional, or community networks in the worker’s home country. Payments are commonly made by bank deposit to the employer’s offshore accounts, or to accounts held by the employer’s relatives, in order to avoid tracing.
We don’t have a crystal ball, but it looks like Messrs. Bains, Singh, Khanna and Saif are cooked.
Tristam Price. Editor
Comments