Dairy firm deceiving authorities in underpaying workers: ERA

The Employment Relations Authority (ERA) has determined that Rural Practice Ltd (RPL) attempted to deceive officials regarding underpaid Indonesian workers.

The dairy company, owned by Reza Abdul-Jabbar, employed three Indonesian workers from December 2017 to February 2022, with one raising a complaint that he had not been paid the salary as stipulated in his employment contract.

The Labour Inspectorate took on the case and found that the employer submitted to Immigration NZ that the employee would be paid a salary of $55,000 per annum.

But the individual employment agreement (IEA) presented by the employee showed a stipulated salary of only $45,000, which the employer advised was the "correct one" and that the employee was paid such wages.

According to the inspector, the Indonesian workers were on annual salaries rather than hourly wages, with the variability of their work hours making it a challenge to determine when their pay fell below minimum wage requirements.

The inspector applied to the ERA alleging that employees weren't paid in full in terms of both contractual and statutory pay entitlements, including holiday pay. There were also deductions made unlawfully and premiums had been sought and received unlawfully. 

Labour officials are pursuing penalties of up to $230,000 for the company and up to $130,000 for Abdul-Jabbar, pending final determination.

ERA decision on underpayments

ERA member Alastair Dumbleton expressed concern over the presence of multiple employment agreements for the same position.

The employer did not explain the situation and submitted that there is no purpose in doing so since the arrears claimed have now been paid.

"The Authority's attention is not diverted by that occurrence," Dumbleton said in the ruling.

"The circumstances of multiple IEA's and how that came about goes beyond the arrears claims made against RPL and their subsequent settlement, and they raise further serious concerns for the Authority about the probity of the respondents."

The absence of explanation for the difference in payslips also meant that the RPL "set out to mislead or deceive INZ or the Inspector, or both," the authority added.

The ERA has directed the company to pay $52,000 in holiday pay arrears to two individuals, following the inspector's conclusion that payslips were fabricated for immigration purposes rather than for the workers' benefit. 

The authority will also further deliberate on the penalties, considering submissions from all parties involved.