Profits from exploiting migrant workers outweigh the cost of fines, says union

Tuesday, 25 June 2019

Migrant workers (left to right) Andrew Doromal, Ric Bayoneta, William Guiro, Ian Chavez, Ryan Magbanua, Renilo Cano, Miguel Dela Cruz, and Albert Vidaha. Guiro says he ended up paying too much for housing and car rental as part of a settlement package on arrival in New Zealand.

Employer don't fear being caught exploiting migrant workers because its makes them more money than the cost of fines, a worker advocate says.

Employers can make hundreds of thousands of dollars by exploiting workers, by not paying minimum entitlements and asking for cash to be paid back to the employer. However, fines are usually only in the tens of thousands of dollars.

Some Auckland migrant workers ended up living in a warehouse. (Video first published June 2019).

Mandeep Singh Bela, coordinator of the Union Network of Migrants and the Indian Workers Association, said that some employers view the fines as simply the cost of doing business and the fines should be higher.

Companies that breach minimum employment standards are either fined, or put on a stand-down list by the Labour Inspectorate and can't sponsor the visas of migrant workers for a specified time.

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The Labour Inspectorate's national manager, Stuart Lumsden said fines had been increased in 2016.

Cases of exploitation were serious and could be heard at the Employment Court, where they would carry a maximum penalty of $50,000 for an individual. For a company fines could reach $100,000 or three times the financial gain for the company.

'Previously the maximum fine was $10,000 for an individual and $20,000 for a company,' he said.

The inspectorate investigated 676 cases last year, with more than half involving the exploitation of migrant workers, Lumsden said.

Migrant workers are considered more vulnerable because they are less aware of their rights, have limited English skills, lack independent financial means of support, face high expectations from family members back home, and are often reluctant to report exploitation for fear of losing their job or being deported, he said.

Bela said exploitation frequently stems from work visas based on employment sponsorship, which tie workers to the employer. If workers are exploited they are unable to seek alternative employment.

The issue was also mentioned in this week's OECD economic survey of New Zealand.

Union Network of Migrants and Indian Workers' Association co-ordinator Mandeep Bela says making all visas open would prevent migrant exploitation.

Decoupling visas from employers and placing harsher penalties on those who were caught were key to improving the plight of migrants in this position, Bela said.

'If the employer is taking cash out from the migrants pay, there's no way of telling if the worker is being exploited. The only way to find out is to empower migrant workers by detaching the visa and giving them a fair go at employment in New Zealand.'

The Union Network of Migrants wants a new division set up within the Ministry of Business, Innovation and Employment (MBIE) to facilitate interim visas for migrants who's employers are being investigated.

'What usually happens is that the employment dispute goes on for so long that their visa runs out. Because it's attached to the employer, the worker ends up leaving the country,' Bela said.

But the Government, which has undertaken a 'deep review' of the issue through MBIE, said it was working to combat migrant worker exploitation, including encouraging workers to report exploitation.

Immigration Minister Iain Lees-Holloway said he would be advised on options resulting from the review and look to implement changes from 2020.

Immigration Minister Iain Lees-Gallowayhas commissioned a 'deep review' of migrant exploitation.

In cases of 'serious workplace exploitation', migrants who come forward may be able to remain while their visa application goes through, without being bound to the employer that exploited them.

Immigration NZ visa services manager Michael Carley, said that it recognised that migrants who had been exploited may be reluctant to come forward, especially if they had been overstaying.

'We encourage anyone currently being forced to work in New Zealand illegally for less than the minimum wage, or excessive hours to contact Immigration New Zealand or the Labour Inspectorate, where their concerns will be handled in a safe environment. People can also contact CrimeStoppers anonymously,' he said.

The inspectorate was targeting industries with compliance issues, Lumsden said.

The worst offenders were small franchise businesses like liquor stores and petrol stations, followed by hospitality, dairy farming, fruit picking and construction, general secretary of First Union, Dennis Maga said.

Work already done to minimise exploitation of international students provided a good blueprint for how migrant visas might be re-workedm he said. .

First Union general secretary Dennis Maga says its important to strengthen accreditation of of legal hire companies.

'There is some freedom of movement for international students now. It helped them look for other employers and not be desperate in their situation.'

Migrants needed an open work scheme too, tied to skill sets and specific regions. Most exploitation was clustered in urban areas, Maga said.

The Labour inspectorate needed to increase the number of inspectors to run thorough investigations of companies responsible for employing migrant workers, 'to separate the good ones from the bad', he said.

The 2018 Budget allocated $8.8 million over four years to increase the number of inspectors and staff. There are currently 71 inspectors, Lumsden said.

The Labour Party wanted the number to increase to 110, according to its election manifesto.

Lumsden said that since June 2017, 11 inspectors had left.

Maga said strengthening the accreditation of legal hire companies was another important strategy.

First Union worked with one employer, Extra Staff Management, to negotiate a fair migrant labour agreement, which took about a year.

The company was able to use the agreement to promote itself to clients, and the union was now being chased by seven other labour hire companies keen to sign.

Maga said he was conscious that companies could use their support of the agreement to bolster applications to Immigration NZ to become accredited employers, allowing them to fast track recruitment of migrant workers.

The union would carefully vet potential signatories to ensure they met the required ethical standards, and were not simply out to improve their public image.

'We don't want to authorise other companies and have them basically use us for a competitive advantage in the labour market,' he said.