An employer who breaches minimum employment entitlements (called “employment standards”) can become a non-compliant employer and be included on the Labour Inspectorate’s “Stand Down List” (otherwise known as the “black-list”). Once black-listed, the employer is prohibited from hiring migrant employees for the specified period of time.
The minimum employment entitlements, or employment standards, that must be complied with in order to stay off the black-list are as follows:
- the requirement to retain copy of individual employment agreement or individual terms and conditions of employment (section 64 Employment Relations Act 2000 (“ERA 2000”);
- the requirement to provide appropriate facilities in the workplace, and breaks, for an employee who is, and wishes to breastfeed (section 69Y ERA 2000);
- the requirement to provide employees with appropriate rest and meal breaks (section 69ZD ERA 2000);
- the requirement to maintain, and provide employees with access to, a wages and time record (section 130 ERA 2000);
- the provisions that relate to bargaining for an individual employment agreement or individual terms and conditions of employment (section 63A ERA 2000);
- the provisions of the Equal Pay Act 1972;
- the minimum entitlements and payment for those under the Holidays Act 2003;
- the requirement to maintain, and provide employees with access to, a holiday and leave record (sections 81and 82 Holidays Act 2003);
- the minimum entitlements under the Minimum Wage Act 1983; and
- the provisions of the Wages Protection Act 1983.
An employer becomes “non-compliant” when they have:
- had a penalty ordered against them by the Employment Relations Authority or the Employment Court for breaching employment standards;
- been subject to a declaration of breach by the Employment Court and had a pecuniary penalty ordered against them for breaching employment standards;
- been issued with an infringement notice by a Labour Inspector; and/or
- been issued with a banning order.
The Stand Down Period
The length of the stand down period increases in accordance with the severity of the breach, as follows:
- 6 month stand-down for a single infringement notice.
- Each subsequent infringement notice incurs a further stand-down of 6 months.
- The maximum stand-down for multiple infringement notices issued at one time is 12 months.
|Penalties ordered by the
Employment Relations Authority or
by the Employment Court for
breaching employment standards
- 6 month stand-down when the total amount of penalties ordered in a case is up to and including $1,000 for individuals and companies.
- 12 month stand-down when the total amount of penalties ordered in a case is:
- over $1,000 but less than $10,000 for individuals
- over $1,000 but less than $20,000 for companies.
- 18 month stand-down when the total amount of penalties ordered in a case is:
- $10,000 and above, but less than $25,000, for individuals
- $20,000 and above, but less than $50,000, for companies.
- 24 month stand-down when the total amount of penalties ordered in a case is:
- $25,000 and above for individuals
- $50,000 and above for companies.
|Declaration of breach ordered by the
Employment Court and any
subsequent order of pecuniary
- 12 month instant stand-down when declaration of breach issued, adjusted up to 24 months if a pecuniary penalty is issued following a declaration of breach.
- Pecuniary penalties are those penalties ordered under section 142E of the ERA 2000 (against a person in respect of whom the court has made a declaration of breach).
- 12 month stand-down from recruiting migrant workers for employers incurring a banning order of less than 5 years, to be added at the end of the ban period.
- 24 month stand-down from recruiting migrant workers for employers incurring a banning order of 5 years and over, to be added at the end of the ban period.
Where a totality approach to penalties is applied by the Employment Relations Authority or the Employment Court, without necessarily identifying a penalty for each breach, the stand-down period is set according to the total dollar amount for penalties ordered for breaching employment standards.
If an individual or company incurs several penalties, a maximum stand-down period of 24 months applies at that time. However, this does not prevent another stand-down period applying if further non-compliance triggers another stand-down.Where a totality approach to penalties is applied by the Employment Relations Authority or the Employment Court, without necessarily identifying a penalty for each breach, the stand-down period is set according to the total dollar amount for penalties ordered for breaching employment standards.
Avoiding the Stand Down List
The best way to avoid being on the stand down list is to ensure compliance with the employment standards listed above. To carry out an audit of your organisation’s compliance, go to: https://www.enablehr.co.nz/health-check/
However, if a breach does occur, then the best way to avoid being on the stand down list is to try and resolve the breach without going to the Authority or the Court. If the breach has been raised by one or more employees, then try and resolve the matter with the employees. MBIE’s Mediation Services may be of assistance. If the breach has been raised by a Labour Inspector, then consider entering into an enforceable undertaking with them, in order to demonstrate to the Labour Inspector the organisation’s commitment to correcting the breach.
Being on the Stand Down List
If a stand down period is imposed, non-compliant employers can challenge the Employment Relations Authority determination or appeal the Employment Court decision relating to the penalty or banning order that resulted in them being named in the stand down list. Or, if being listed was a result of an infringement notice, then that can be challenged through the District Court.
A request can also be made by an employer to the Minister of Immigration for a “special direction” to allow them to hire migrant employees under section 378 of the Immigration Act 2009. The Minister will only grant such an exemption in rare circumstances.
For more information, and web-links to all of the employment standards sections referred to above, see Appendix 10 of Immigration New Zealand’s Operations Manual “Rules for non-compliant employers”: https://www.immigration.govt.nz/opsmanual/#64502.htm
Reproduced with the kind permission of Langton Hudson Butcher.