How fallout from the Burger King ban will impact NZ employment practices

One of NZ’s largest fast food chains has been banned from hiring migrant workers for 12 months for breaching the Minimum Wage Act in a sign the regulator is flexing its muscles – is your business in its sights?

Recently, news broke that Burger King has been banned from hiring migrant workers in New Zealand for 12 months for breaching the country’s Minimum Wage Act.

The ban has been imposed by the Ministry of Business, Innovation and Employment (MBIE) against the Antares Restaurant Group, which owns and operates Burger King New Zealand.

Reported by the NZ Herald, national secretary for Unite Union said it welcomed the ban as a warning against any business that considers exploiting its workers.

“This is a large high-profile corporation and shows that this is not just a problem for small restaurants and fruit pickers – it goes right across most sectors and company sizes,” Hehir said.

“If an employer is not able to guarantee the most basic minimum conditions allowed by law, they should not be able to hire vulnerable workers.”

The news follows on the heels of a spate of infringements of the country’s minimum employment standards, which the current government has identified as a priority for rectifying.


NZ’s 12-month revolution in employment practices


While the approach may seem heavy-handed to some, head of HR for MyHR Sylvie Thrush Marsh said the penalty has been on the books for some time.

“The MBIE has had the ability to place employers on stand-down from hiring migrant workers since April 2017; the measures were introduced under John Key’s National government, so this is not a new approach by any means,” said Thrush Marsh.

“Just like businesses are obliged to pay their taxes and follow health and safety laws, they are obliged to treat their employees fairly, including paying them above the minimum wage.”

The minimum wage should be seen as the norm, and not a target for business owners to aim for.

READ: Why a living wage is gathering steam

The aim, in fact, should be to offer even better terms of employment than the bare minimum required by law – especially for migrant workers that are particularly vulnerable to underhanded business practices.

“Migrant workers can be particularly vulnerable to exploitation because they are less likely to be familiar with our employment law, and their ongoing residence in New Zealand may be dependent on their employer, so they’re more likely to keep quiet about breaches of their terms and conditions for fear of retaliation,” Thrush Marsh said.


Labour Inspectorate’s naughty list grows longer


While the ability for the MBIE to place businesses on its stand-down list has been around for more than a year, it’s the Labour government under Prime Minister Jacinda Ardern that has been more proactive in applying it.

“There has been an increase in the number of employers placed on the stand-down list since Labour came into power, so it’s a measure that MBIE and the Labour Inspectorate (who maintain the list) seem to be more comfortable using,” said Thrush Marsh.

The full stand-down list is publicly available, with the most recent report (August) hosted here.

The number of businesses on the list is set to grow with number of Labour Inspectors slated to increase from 60 to 110 by the end of 2019.

Will this newfound willingness to put offending businesses in the naughty corner affect hiring practices in NZ?

“We know that businesses are worried not only about the financial penalties being applied in these cases, but also the impact on their reputation (anyone with an internet connection can see which businesses have been placed on stand down) as well as their ability to fill vacancies in our current tight labour market,” explained Thrush Marsh.

“Whenever the media draws attention to an employment decision, we’re flooded with enquiries from our clients about what the decision might mean for their business; this also happened with the recent Smith City case.”

READ: Employment law – how to do right by your workers

For employers, this is yet another timely reminder to make certain that their own practices are up to scratch.

As Thrush Marsh points out, those businesses already doing things by the book have nothing to worry about.

“Those who are failing to meet their employment obligations (intentionally or otherwise) are not only letting their people down, but also enjoying an unfair advantage over other businesses who are taking the time to make sure they’re doing everything by the book,” said Thrush Marsh.