A Christchurch company specialising in foreign labour made employees sign an illegal “bond document” requiring them to pay the firm nearly $5000 if they quit.
One World Resourcing apparently told one employee if he did not sign, his visa would be cancelled and he would have to return home to the Philippines.
The Employment Relations Authority (ERA) found One World’s actions breached the Wages Protection Act and exerted moral pressure on vulnerable foreign employees.
The firm may now lose its ability to recruit migrants.
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One World was set up in 2012 to supply foreign labour for the Christchurch rebuild. In 2015, it hired five Filipino glaziers and assigned them to a client’s project.
Upon arrival, One World required the workers to get a bank loan so they could repay the company $3248 for immigration services, visa costs, flights, a bicycle, a week’s rent and a wage advance.
There were no complaints about this payment, which the ERA decision said were “the kind of costs an employee would normally bear”.
In June 2015, One World chief executive Declan Clancy heard two of the glaziers planned to leave.
He was concerned the client’s project would not be finished on time if they left, and the firm would incur a penalty.
Clancy organised a meeting with the five employees and presented them with a “bond document” requiring them to pay $4968 if they left the company before the end of their contract.
This was to cover “costs to One World for recruiting the five glaziers”, such as postal fees, Department of Internal Affairs fees, Philippines Embassy fees and bank fees.
The ERA said this amounted to seeking a “premium” – the illegal practice of making employees buy a job.
One of the two employees who planned to leave said he was not happy working at One World.
“[Clancy] told me that if I did not sign this document my visa would be cancelled and I would have to go back to the Philippines. This made me feel afraid for my family, which is the reason I signed the bond.”
The ERA decision said the employer took advantage of its inherently greater bargaining power to make the employees sign the bond documents.
“In reality, there was pressure put on the glaziers to sign the agreement and it sought to limit their individual choice.”
The ERA fined One World $9000, of which $1500 would go to each of the two employees to compensate them for their stress and worry.
The fine was heavily discounted because One World co-operated with the Labour Inspector, the breach of the Wages Protection Act was inadvertent, and One World withdrew the bond agreements within a week of being told they were illegal.
Regardless, Immigration New Zealand may prevent the company from recruiting migrant labour for a year.
As of April 1 this year, Immigration NZ imposed a policy where it would issue companies with a “stand-down” on recruiting migrant labour if they were penalised for breaching employment standards.
The length of the stand-down depended on the size of the penalty imposed.
One World’s advocate argued would be the end of the business.
The advocate submitted the company’s business was “completely predicated on the sourcing of immigrant labour” and a year-long stand-down would be its demise.
He said One World’s 40 staff would lose their jobs if the company went under.
“I accept that my determination may have a consequence for One World beyond the mere payment of money,” says the ERA decision.
“However, that is a decision yet to be taken by a government agency applying government policy. My decisions must not be affected by government policy.”