New Zealand Law Society - Employment law "how it is in Japan" doesn't work

Employment law "how it is in Japan" doesn't work

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Penalties totalling $70,000 have been imposed by the Employment Relations Authority on Japan Power Ltd, which operates two Japanese restaurants in Christchurch.

Labour Inspectors found the company, which trades as Samurai Bowl, had not correctly paid annual leave, alternative holiday pay and public holiday, and paid employees on the basis of minimum wage rates rather than their agreed hourly rate, MBIE says. It says the company breached the rights of 25 employees.

MBIE says the director of Japan Power, Masakazu Takeuchi, said he did not agree with New Zealand employment law, and ran his business "how it is in Japan".

In its determination, Labour Inspector v Japan Power Ltd [2018] NZERA Christchurch 44, Japan Power did not dispute that it had breached sections 16, 18 and 81 of the Holidays Act 2003.

The Authority accepted mitigating factors in that it cooperated with the Inspectorate, fixed its systems, and paid the $23,927 owed to the affected employees. It discounted the penalties by 60% to a total of $228,800 and then applied a further discount of 60% to a total of $80,080 was applied after considering the financial circumstances of Japan Power. A final discount to recognise the proportionality of outcome was applied to take the total penalties to $70,000.

“We are glad to see these employees receive their arrears, particularly as they were vulnerable migrant workers in a company which made an intentional business decision to not provide holiday pay or keep adequate holiday and leave records for its staff,” says Labour Inspectorate regional manager Jeanie Borsboom.

“The significant penalty awarded in this case should send a clear message that you cannot ignore New Zealand employment law, and that the Inspectorate will not let companies off the hook which seek a competitive advantage by shirking their obligations," she says.

“Every employer must keep wage, time, holiday and leave records and meet all minimum standards, which is an important part of running a business in New Zealand.”

The penalties mean Japan Power is on a stand down list preventing them from sponsoring visas for migrant workers for 24 months.