Two construction companies learn lessons on migrant workers’ rights

Construction businesses have been reminded of the laws around accommodation conditions and wage deductions for staff, following two companies being fined over poor treatment of migrant workers

In March this year, Tiger Construction NZ Limited, trading as Tiger Scaffolds, was ordered by the Employment Relations Authority (ERA) to pay MBIE $21,000 for unlawfully deducting three migrant employees’ wages. Tiger was also ordered to reimburse $21,692 to the three employees.

The Lower Hutt residential and commercial scaffolding company was investigated by MBIE’s Labour Inspectorate following complaints received by the Philippines Embassy in February 2019, alleging deductions were made from their wages without their knowledge.

The employer made deductions related to workers’ accommodation and for training which they never attended.

Labour Inspectorate construction sector strategy lead Jeanie Borsboom said that, while employers can make deductions from employees’ wages in certain cases, these deductions must be agreed to by the employee and must be considered reasonable.

Borsboom said having a deductions clause in an employment agreement is not enough.

“Even then, the deductions must be reasonable. For example, employers cannot charge employees for operational costs that should be covered by the business.”

Employees can take a case to the ERA for as far back as six years, Borsboom said.

Tiger is to be put on the Immigration Stand-down list, which prevents a company from hiring new migrant workers typically for around two years.

“Migrants are entitled to the same rights as New Zealand workers,” Borsboom added.

Further prosecutions follow fines for substandard migrant worker housing

Meanwhile, the Manurewa labour hire company fined for creating substandard housing for migrant construction workers (featured in Under Construction here) has gone into liquidation. This follows insolvency after one director and the company were fined by Auckland Council.

Reuben Sims Labour Ltd, also known as Radius Contracting Limited, was fined $112,000 in January 2021 over Filipino migrant workers being housed for years in a renovated bingo hall and container-type buildings, dating back to 2017. Auckland Council issued a Dangerous Building Notice in 2019 and, in 2021, brought a successful prosecution over two breaches of the Resource Management Act and Building Act. Prosecutions of landlords 4 Corners Investment Ltd and Paul Knights have been referred to the Crown Prosecutor and the defendants have elected trial by jury, Auckland Council says.

The property had been zoned to allow workers’ accommodation as a permitted activity, but needed to comply with requirements and standards for the zone. Its 21 portable cabins for 42 tenants posed a serious fire risk, Auckland Council found.

Targeting temporary migrant worker exploitation

MBIE’s Labour Inspectorate has been targeting industries with compliance issues, with the ministers of Immigration and Workplace Relations and Safety leading a 2020 review into temporary migrant worker exploitation. The review found there are an estimated 235,000 temporary migrant workers in New Zealand at any one time, and suggests they are more at risk of exploitation than other workers.

Employment NZ has seen an increase in reports of exploitation occurring during COVID-19.

MBIE said in July 2020 it will release $50m over four years to address temporary migrant worker exploitation in NZ workplaces.

Information about making deductions from pay can be found at https://www.employment.govt.nz/hours-and-wages/pay/deductions/.

 

Photo caption: Substandard accommodation operated by Radius Contracting Ltd. Photo supplied by Auckland Council