"Those employees were isolated from family"
A New Zealand couple who formerly owned two restaurants have been ordered to pay $423,000 for exploiting migrant workers.
Ajay and Kavita Sharma underpaid seven of their employees.
Employment Court Judge Joanna Holden ruled that they exploited migrant workers and violated multiple employment standards.
The couple formerly owned Prisha’s Royal Cambridge and Roquette Restaurant.
The restaurants are no longer under their ownership, with Prisha’s Royal Cambridge burning down in December 2018, and Roquette Restaurant being sold in September 2021.
In her ruling, Judge Holden noted that the Sharmas displayed minimal remorse for compliance breaches and even fabricated documents to rationalise certain actions.
The judge determined that between December 2017 and December 2018, the Sharmas violated “numerous” minimum employment standards for workers, all of Indian descent.
In her decision, she wrote: “Some employees spoke of feeling caged or like a slave.
“Those employees were isolated from family, several were young and most were visa-dependent.”
She said the workers gave credible evidence of the stress they felt working for the couple.
Judge Holden added: “The inherent inequality of power in the employment relationship helped make the breaches possible.”
An investigation by the Ministry of Business, Innovation and Employment (MBIE) found the couple were not paying the correct minimum wage, not paying for work done, not paying for holiday, public holiday, sick and bereavement leave, making two employees “pay thousands of dollars in premiums” and deducting money without the employee’s consent.
Staff at Prisha’s were forced to make payments to each other as “premiums” of approximately $150 per week.
Paul Wicks KC, the Sharma’s counsel, said the payments did not breach the Wages Protection Act as Prisha’s had not received any funds.
However, the judge found the payments still benefited the restaurant and the act extended to “indirect payments”, including when a worker was paying money to satisfy the debt of the employer.
Judge Holden admitted that some of the employees’ evidence was unreliable.
At times, they exaggerated their work hours. As a result, she relied on bank records or other documents.
Both the husband and wife were involved in the breaches and despite Ajay being the director of both restaurants, his wife had “significant influence or control”.
Both actively ran the restaurants.
The Sharmas were ordered to pay compensation of $104,500 and arrears of $43,522.
Pecuniary penalty orders were made against Ajay Sharma for $45,000, Kavita Sharma for $22,500, and against the Cambridge restaurant of $100,000 and the Whakatane restaurant of $30,000.
The couple were also ordered to pay $78,429, bringing the total amount to $423,951.
If the money cannot be paid by the companies, the Labour Inspector can recover it from the couple.
The Labour Inspectorate had obtained a freezing order against the couple, allowing it to secure funds from the couple to pay the arrears and compensation costs in full to the employees.
The Employment Court currently holds $225,000 plus interest, and Judge Holden ordered $36,937 to be initially paid to the workers.
Pending further orders, the owed money will remain in the court’s control.
MBIE’s Labour Inspectorate head of compliance and enforcement, Simon Humphries, said vulnerable workers had been “exploited and denied basic minimum employment standards”.
“As a result, they suffered considerable distress.”
“Exploitation of workers is unacceptable. This was deliberate and systemic offending across two businesses.
“The penalties awarded demonstrates the serious nature of this offending and sends a very clear message to businesses who exploit vulnerable workers for their own financial gain.
“The consequences of such actions could be severe so it’s not worth the risk.”