Liquor stores across New Zealand running on the labour of exploited migrants

Friday, 21 June 2019

Aarav doesn't know whether he is going to be able to stay in New Zealand.

For almost four years Aarav (not his real name) worked 65 hours a week at a liquor store in the Manawatu and earned, on average, $6.92 an hour. The legal minimum wage is $17.70 an hour.

Aarav said he worked for the low wage because his boss promised to support his residency application and his dream to create a life here.

But eventually he realised there would be no support, no pay rise and no improvement in work conditions if he stayed, he said.

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In January, he handed in his resignation and filed a personal grievance against his boss.

'I felt frustrated. When I first applied for the work visa he promised he would pay me proper, he promised he would do everything right,' Aarav said.

'But when I got the visa he said, you have to either remove the application or work like this. The conditions of my visa mean I was tied to him.'

Migrant exploitation has become a significant issue in New Zealand.

Around 53 per cent of all cases investigated by the Labour Inspectorate involved migrant labour.

Immigration Minister Iain Lees-Galloway announced a review in November into the exploitation of migrant workers.

Liquor stores across the country have emerged as significant offenders.

Since 2012, the Labour Inspectorate has completed 66 investigations into liquor retail businesses.

Stuart Lumsden, national manager of the Labour Inspectorate said it was time to use mechanisms, such as revoking liquor licences, against liquor store owners who knowingly breach basic employment standards. 

But according to police, working conditions don't form part of the vetting processes for liquor licences and duty managers certificates.

Smoke and mirrors

Aarav initially signed a contract with his employer In November 2015, for 40 hours a week at $17.50 an hour, or $570 a week after tax. 

But Aarav ended up working upwards of 65 hours in the bottle store.

Three months into the position, his boss said he could help Aarav with residency in the future.

The trade-off was to agree to a pay cut. Aarav would continue to be paid $570 a week into his bank account but he had to return $120 of that to his employer.

'What could I do? My visa tied me to that business,' Aarav said.

Over $5000 of holiday pay paid to Aarav by the company had to be returned through a friend's bank account to avoid being traced by regulators. 

Aarav said he knew he was being exploited but felt powerless to do anything else.

A systemic issue

Lumsden said there was a high rate of breaches at liquor stores which was made worse because staff were often on work or temporary visas.

Migrants were more vulnerable than your average New Zealand workers, Lumsden said. 

'They feel beholden to the employer because of the visa or alternatively, it might be a cultural thing if they come from a culture where the employer is god and workers don't have the right to go against them,' he said.

But investigations weren't enough.

Lumsden said the licensing authorities had a large part to play in ensuring liquor store owners followed the law.

'They shouldn't be issuing liquor licences to people who are not of good character. If you are exploiting your workers you can't possibly be of good character,' he said.

Auckland Council's alcohol licensing manager Peter Knight said it wasn't a straight forward process.

There are three agencies involved in the licensing process and employment tribunal decisions didn't have to be disclosed, Knight said.

In some cases the council was able to block liquor licence renewals on the basis of tribunal decisions. 

'On the other hand when in 2016 we made an application to the Alcohol Regulatory and Licensing Authority to have the licences of several premises cancelled for [employment breaches] the authority refused to cancel them saying that we needed to prove that there was a link between the breaches of employment law and any alcohol related harm,' Knight said.  

'This is virtually impossible to do.'

A franchise problem

The issue of employment breaches at liquor stores garnered attention recently with the $100,000 fine issued against the owner of Shalini Limited.

Venu Mohan Reddy Beerapu, sole director and owner of Shalini was ordered by the Employment Relations Authority to pay $96,542 in minimum wage and holiday pay arrears to seven migrant workers as well as $100,000 in penalties.

One of the stores owned by Beerapu belonged to the Bottle-O franchise. 

Lumsden said franchises also needed to be involved in ensuring the working conditions of stores carrying their name.

There were currently 12 Bottle-O stores under investigation for breaches of minimum labour standards, Lumsden said.

General manager for Bottle-O New Zealand Grant Simpson said Beerapu's store was no longer part of the franchise however, he had not been aware of the employment breaches when it was.

Simpson said the company had not been made privy to the details of the 12 ongoing investigations into franchisees.

'We will be conducting further investigations into the allegations, as well as reviewing our processes and systems,' he said.

Aarav said a lot needed to change to protect migrants from exploitation. 

'But first, they need to stop tying visas to employers, stop tying us to them,' he said.