Kitchen nightmare: 5 breaches of the minimum employment standards

Late last year, an Italian restaurant found itself in hot water after breaching five minimum employment standards. In this article, we’ll explore what happened, what the breaches were, and the outcome of this case.

The cold-hard facts of the case

Dilkhush Pvt Limited (Dilkhush) operates as a restaurant and was first inspected by the Labour Inspectorate in August 2021 after an employee made a complaint that he had to pay for his employment – yes, you read that right – the employee reported that he had to pay the employer.

Upon investigating, the Labour Inspector identified five workers who had been affected by breaches of the business, four of whom were migrants. Two of whom were dependant on Dilkhush for their visa – making them especially vulnerable. There was also a suggestion that migrant employees were treated differently to staff not on visas.

During the investigation, Dilkhush were found to be in breach of five minimum employment standards.

What were the five breaches?

1. Seeking a premium: respondents sought out and received a premium of $16,900.
2. Not meeting minimum wage: the respondents made an employee repay $200 to $300 a week, totalling $8,900. They also requested a further portion of wages to be paid back as the respondents didn’t want to pay the $21 an hour required to meet visa requirements set by Immigration New Zealand.
3. They failed to keep and maintain accurate wage and time records.
4. They failed to adhere to Holidays Act: they breached the Holidays Act by:
   • Failing to pay or calculate annual holiday pay correctly.
   • Failing to pay staff for not working a public holiday on an otherwise working day.
   • Failing to provide alternative holidays.
5. Didn’t pay public holiday entitlements: the respondents failed to pay time and a half for working on public holidays.

What were the penalties?

The Labour Inspector applied to the Authority seeking an order for Dilkhush to pay wage arrears and penalties for the breaches. This decision mainly focused on penalties related to four migrant employees. Two directors of Dilkhush admitted they were involved in the breaches under section 142W of the Employment Relations Act and that they were jointly and severally liable for wage arrears totalling $26,407.88 (gross).

The final outcome

The company was ordered to pay wage arrears of $26,407.88 (gross) and additionally, a penalty of $40,000, while the directors were jointly and severally liable for a penalty of $20,000.

This case serves as a critical reminder that the rights of migrant workers are no different from any other employee. Through this ruling, the Employment Relations Authority has sent a clear and unwavering message to employers – intentional violations of minimum employment standards will not be met with leniency.

Don’t wait until it’s too late, get on-top-of record keeping now

Whether you’re a small business, a large enterprise, or part of a franchise network, ensuring compliance is essential. And while most business owners wouldn’t dream of intentionally breaching minimum employment standards, mistakes can and do happen – this is where Citation HR can help. Our workplace relations experts can complete a thorough HR Compliance Audit of your business – and the best part is that this service is included in our monthly, cost-effective subscription, which is designed to protect your business from costly risks.

If any of the information in this article has raised any questions or concerns about your workplace compliance, or if you have another employment matter you need assistance with, why not put our HR advice to the test? Arrange a complimentary workplace compliance consultation today.

About our author

Jessica Husband is an Employment Relations and Health & Safety Consultant at Citation HR. She assists clients with a range of employment relations and compliance matters via the 24/7 HR Advice Line. She has been helping businesses and employers with employment relations for over four years and counting.