Canterbury backpacker hostels fined over use of volunteer labour

Friday, 16 March 2018

The Labour Inspectorate is expanding its crack down on accommodation providers who exploit young travellers through work for a bed deals that pay below minimum wage.

A clamp down on freebie labour has seen three Canterbury backpacker hostels hit with fines for breaking the rules and other tourist hot spots can expect scrutiny from the Labour Inspectorate.

Chez La Mer and Bon Accord backpacker lodges in Akaroa, and Jack in the Green in Hanmer Springs received fines ranging from $2000 to $4000 for failing to comply with employment standards.

Volunteer work by young travellers has been common practice in hostels which allowed them to stay for free in return for carrying out duties, such as bed making or cleaning.

But failure to provide written employment contracts, and pay minimum wages and holiday pay led to new guidelines spelling out the difference between true volunteering and real jobs.

* Illegal 'volunteer' labour rife in NZ's accommodation industry

* MBIE investigates exploitation of backpacker labour in beds for wages deals

* Freebie labour has fish hooks for the tourism industry**

Labour Inspectorate regional manager David Milne said hostels in the south were starting to toe the line.

Of the 12 visited in Canterbury recently, most had legal arrangements where the weekly accommodation rate was deducted from wages with written agreement from the employee.

But there were still some poor performers and it was disappointing to find that the three hostels fined had made no effort to abide by the rules.

Such employers were unfairly treating their employees, undermining fair competition in the market, and doing New Zealanders out of jobs, said Milne.

Inspectors involved in the Christchurch operation had noted that hostels were employing more locals and fewer tourists.

'If we can emulate that through out the rest of the country, that's a really good outcome.'

From about mid year inspectors would start visiting Nelson, Marlborough, Napier, Taupo and Rotorua and that would give an indication of how big the problem was nationally.

'I'm really not confident the message is reaching the tourist areas, so we're going to go out and test that,' said Milne.

Adjusting to the new rules around use of traveller labour has been a struggle according Base Auckland manager Darelle Jenkins, who is also a spokesperson for the Backpacker, Youth and Adventure Tourism Association (BYATA) which covers about 30 hostels.

Her 530-bed hostel, the biggest in the country, had ended up contracting a cleaning company with 20 staff to do their cleaning and the 'quite huge' impact on running costs had to be absorbed.

'We haven't been able to put our prices up, we were already charging what we could.

When the Labour Inspectorate began fining hostels last year, BYATA stepped in and negotiated a grace period so they could get their systems sorted.

'It's not a quick overnight fix to be completely law abiding,' said Jenkins.

Industry stalwarts predicted hostels would close because they could not afford to operate without volunteer staff.

Jenkins isn't aware of that occurring yet, 'but I can see if happening in future …hopefully people can find a way to get more revenue and save on costs elsewhere … you don't want to be cutting corners on customer service or cleanliness.'

She said backpacker boards were still rife with advertisements offering labour for accommodation swaps and it was only fair that other businesses breaching the rules came under scrutiny too.

Milne said the focus was on the accommodation sector because that's where 'it's most endemic,' but enforcement action could be extended to other industries that were exploiting workers in this way.