Marlborough wine business fined $120k for exploiting vulnerable migrant workers

Double Seven Services ran a viticulture labour contracting firm and paid its employees based on each piece of work completed. Photo / Getty images

A Marlborough wine business and its owner have been fined more than $120,000 for exploiting "vulnerable migrant workers" and failing to pay minimum wage.

Double Seven Services ran a viticulture labour contracting firm and paid its employees based on each piece of work they completed.

During a spot visit by the labour inspector amid a wider probe into vineyards, the regulator believed some of Double Seven's employees might not be receiving the minimum wage due to the piecemeal rates they earned.

Some workers, too, complained they were not completing enough pieces of work each hour to be paid the minimum wage and the inspector subsequently requested records from the company.

After identifying what it believed minimum wage and holiday pay breaches, the inspector interviewed Double Seven's director and owner Qin Zhang and he was unable to provide an adequate response to the alleged breaches or what appeared to be false entries in company records.

An investigation report was then served on Zhang but he had no further involvement with the case, which the inspector took to the Employment Relations Authority (ERA) last year.

Neither Zhang nor Double Seven appeared at the ERA meeting, which proceeded in their absence.

ERA member Peter van Keulen, in his decision released just before Christmas, said he was satisfied that Double Seven had:

• Failed to keep wage and time records.

• Failed to keep holiday and leave records.

• Failed to provide employment agreements for 104 staff.

• Failed to pay minimum wage to 21 employees, which minimum arrears totaling $7047.

• Failed to calculate or pay leave entitlements to 21 workers.

• Failed to pay 13 workers minimum daily pay for a public holiday.

• Charged a worker a $5065 premium for working.

As well as being the company's director, Van Keulen said that Zhang had been running Double Seven as its general manager or chief executive.

"I am satisfied, on the evidence I received that Mr Zhang has aided, abetted, counselled or procured the breaches and that he was knowingly concerned in or party to, the breaches of minimum standards," van Keulen said.

Van Keulen ordered Double Seven to pay $12,675 to affected workers and said the inspector had permission to come back before the authority and seek the money from Zhang if necessary.

The ERA then considered penalties and said the maximum the company could be fined was $1.2 million. Based on the breaches, Zhang could also have been fined $590,000.

"Double Seven has failed to pay minimum standards, failed to keep mandatory records and has charged a premium to an employee," van Keulen said. "These are all serious breaches.

"Further, Double Seven has exploited vulnerable migrant employees, employees who will have had little knowledge of their rights or, if they did know their rights, little power or ability to enforce their rights.

"And then when faced with an enquiry into its employment practices and its compliance with employment obligations Double Seven initially participated but it appears only to the extent that it put forward information that it believed would wrongly show it had complied, including providing amended information that was clearly incorrect. Once it became clear to Double Seven that the labour inspector was not going to be misled by its information, Double Seven and Mr Zhang stopped assisting and then did not engage at all in this action," the ERA member said.

Van Keulen fined Double Seven $85,000 and Zhang $42,500.

The company was also ordered to pay costs for the ERA hearing.