Migrant worker exploitation – not in our back yard

24 Feb 17

Employers of migrant workers, beware. From 1 April 2017 even a minor failure to comply with minimum employment standards could result in a ban on hiring migrant workers for between six months to two years.

The announcement by Immigration Minister, Michael Woodhouse should come as no surprise; as the Government works hard to bolster employment standards in New Zealand. Recent exploitation of migrant workers has been highlighted and the Government has taken action. Quite simply, the Government has made it clear that we will not tolerate exploitation in our backyard – and for good reason.

As a place to live, work and study, New Zealand is promoted as a “safe and secure;” “family friendly;” “clean and beautiful;” place to live where you can achieve a “balanced lifestyle.”[1]

With New Zealand’s ever changing demographic and economic reliance on tourism as a key market sector, looking after our migrant workers is not only the right thing to do and consistent with New Zealand’s international image – it is good business.

The latest MBIE reports show we are still struggling to recruit qualified labour in key growth sectors, such as construction, health services, and tourism.[2] New Zealand employers in these sectors are unable to meet the demand for growth with New Zealand employees. For New Zealand to continue to grow its economy, the reality is we need to look to fill skills shortages with migrant workers.

Most New Zealand employers would find it ethically reprehensible to exploit migrant workers. The issue for our economy comes when those that don’t adhere to minimum standards gain a commercial advantage over other businesses that do, with lower employee-related costs. Enforcing compliance of minimum standards across all businesses therefore is commercially imperative.

As Minister Woodhouse said, “If you have been subject to an employment law breach, you just don’t get access to the international labour market. That’s a privilege and if you abuse the privilege you lose it.”[3]

Exploitation of Migrant Workers in New Zealand

A study published by the University of Auckland in 2016 identified exploitation of workers across a “widespread” range of industries including: construction, dairying, horticulture and hospitality.[4] The Report found the most common forms of exploitation in New Zealand are:

  • excessive working hours without breaks;
  • no pay or severe underpayment;
  • no holiday pay;
  • no employment contracts;
  • taxes deducted but not paid to IRD;
  • degrading treatment and even restrictions on being able to leave the business premises when not working; and
  • workers paying significant amounts of money to employers for their efforts to secure residency.

The author of the report, Dr Christina Stringer, notes: “This research uncovers widespread abuse that’s normally hidden. These workers’ contribution to our economy must be valued, and the vulnerable among them must be properly protected.”

Regrettably, New Zealand cannot claim a totally clean record for the worst form of migrant worker exploitation. Human trafficking in New Zealand has largely gone undetected for a number of years – however, the US Government noted New Zealand was a “destination” for human trafficking in 2004.[5] A recent amendment to the Crimes Act has also given the impetus for investigation of what our Supreme Court Judges called a “modern day form of slavery.”[6]

On 15 September 2016, New Zealand’s first conviction for human trafficking was entered in the High Court at Auckland. Faroz Ali was found guilty of 15 counts of human trafficking after luring Fijian workers to New Zealand with promises of decent wages and working visas. The reality for those workers was grim: long working hours for little to no pay; sleeping in overcrowded basements; $4,000 fees paid to Ali for “administration fees” – many had sold personal property in Fiji to cover these costs.

The High Court handed down a lengthy 9 years and six months term of imprisonment, in what it hopes will be a deterrent to others.

In addition to the criminal offence for human trafficking, the Human Rights Review Tribunal can award civil pecuniary penalties in relation to a breach of human rights and in particular where migrant workers are discriminated against in the workplace.

What employers of migrant workers need to know

  • Minimum employment standards are contained within the following Acts of Parliament:
    • Employment Relations Act 2000;
    • Minimum Wage Act 1983;
    • The Parental Leave and Employment Protection Act 1987;
    • Holidays Act 2003; and
    • Wages Protection Act 1983.
  • The potential to be banned from employing migrant workers for a breach of minimum standards will have broad application. It will capture:
    • employers who are: supporting work visa applications and approvals in principle;
    • employers seeking accredited employer status or supporting residence class visa applications based on employment; and
    • employers who are part of the Recognised Seasonal Employer scheme.
  • A “non-compliant” employer will be anyone who is handed down an employment standards-related penalty, which includes:
    • formal infringement notices issued by the Labour Inspectorate (following a Labour Inspectorate investigation)
    • penalties issued by the Employment Relations Authority or the Employment Court; and
    • declarations of breach or banning orders issued by the Employment Court.

This will include any penalties handed down as part of a personal grievance raised by an employee proceeding to the Employment Relations Authority or the Employment Court.

  • Non-compliant employers does not include very minor breaches where an employer’s conduct is mostly compliant and it has demonstrated a desire to comply with standards, such as by entering into an enforceable undertaking to achieve compliance and rectify any breaches.
  • If you are found to be a “non-compliant” employer when you already have migrant works in your employment, you will be permitted to allow the workers to work the duration of their visa, but those employees will not be granted any further work visas to work for you.

If you are an employer of migrant workers and you would like to ensure you are complying with all minimum standards legislation, please contact Nic Soper or Jenna Riddle.

Pdf version: Migrant Worker Exploitation – Not in Our back Yard


  1. https://www.newzealandnow.govt.nz/why-choose-nz.
  2. http://www.mbie.govt.nz/info-services/employment-skills/labour-market-reports/forecasting/short-term-employment-forecasts/short-term-employment-forecasts-2016-2019-nov-2016/document-image-library/short-term-employment-forecast-2016-2019-november-2016.pdf.
  3. https://www.beehive.govt.nz/release/clampdown-rogue-employers.
  4. https://www.auckland.ac.nz/en/about/news-events-and-notices/news/news-2016/12/worker-exploitation-widespread-study.html.
  5. http://www.refworld.org/docid/4680d800c.html.
  6. https://www.courtsofnz.govt.nz/speechpapers/NZ%20trafficking%20Paper%20-%20final%20-%203%20Feb.pdf/at_download/file.