Indian migrant worker exploited, $33,000 fine imposed

A Mt Maunganui bottle store owner has been fined a total of $33,000 after authorities found an Indian migrant worker was deliberately underpaid and exploited over a three-year period, Stuff has reported.

The Employment Relations Authority ordered liquor store owner Inderpreet Singh to pay an $11,000 penalty, while his company, Hot Spot Liquor Ltd, was fined $22,000, following what the authority described as “egregious” treatment of a vulnerable worker. Of the total penalty, $8,250 is to be paid directly to the employee.

Indian migrant worker Diwakar Pandey was employed as a store manager at Singh’s Thirsty Liquor store in Mt Maunganui and held a series of temporary, employer-specific visas during his employment. After Pandey lodged a complaint with a Ministry of Business, Innovation and Employment (MBIE) Labour Inspector, an investigation was launched.

The inquiry found Pandey had been required to work at another bottle store owned by Singh and had not been paid on multiple occasions. He was also underpaid overall, did not receive correct public holiday pay, and was denied proper holiday entitlements. In total, the underpayment amounted to $35,549, Stuff report mentioned.

Following the investigation, Singh and his company accepted that the alleged breaches had occurred and repaid the full amount owed to Pandey in January last year. The Labour Inspector then applied to the Employment Relations Authority seeking penalties.

The Labour Inspector argued that exploitation of migrant workers had no place in New Zealand and said penalties were necessary to send a clear message that breaches of the Employment Relations Act would not be tolerated, Stuff reported.

Authority member Jeremy Lynch, who heard the case late last year, said the offending was clearly intentional rather than accidental and involved sustained failures over more than three years. He noted Singh was an experienced business operator who had ample opportunity to understand and comply with employment law, and that Pandey had suffered real and measurable loss.

Lynch also accepted the Labour Inspector’s submission that Singh and his company had gained an unfair advantage over competitors by retaining wages and holiday pay that should have been paid to the worker.

While Singh and his company submitted that their early acceptance of responsibility and repayment of wage arrears should result in a significant reduction in penalties, Lynch said only a limited reduction was appropriate. He accepted that Pandey was a highly vulnerable migrant worker, pointing to the inherent power imbalance in the employment relationship, which was further amplified by Pandey’s reliance on his employer for immigration support.

Stuff reported, Lynch noted that Pandey’s employer-specific visa restricted him to working only for Singh’s business and that Pandey claimed he faced threats of visa cancellation. Although neither Singh nor his company had previous adverse findings, Lynch said a deterrent penalty was required given the egregious nature of the conduct.

Labour Inspectorate Northern Region investigations manager Katriona Ikenasio described the case as a serious example of exploitation, involving the intentional failure to keep compliant employment records in order to conceal true hours and work patterns. She said this conduct was aimed at gaining a financial advantage and depriving the worker of minimum entitlements.

Ikenasio said the Labour Inspectorate had been working closely with liquor retailers since 2022 to remove non-compliant operators from the market and that there was now strong alignment across the industry that businesses exploiting vulnerable workers had no place in the sector.