December 2022
Worker Protection (Migrant and Other Employees) Bill
Executive Summary
The Restaurant Association of New Zealand (the Restaurant Association) welcomes the opportunity to make a submission on the Worker Protection (Migrant and Other Employees) Bill, and would like to make a verbal presentation to the committee in support of this submission.
The Restaurant Association shares the Government’s concerns around worker exploitation and works extensively to support efforts to combat this issue in our industry.
The Restaurant Association supports the Bill’s proposal to ensure better collaboration between the two regulators to undertake compliance and enforcement activity – to ensure cases of exploitation are not falling through the cracks.
However, it is our view that the lack of sufficient resourcing, particularly of the labour inspectorate, has meant that the Government is only ever reactive to exploitation – engaging after exploitation occurs.
We believe that without the proper resourcing in place, this piece of legislation will be merely another compliance burden on employers who are constantly having to familiarise themselves with the rapidly changing regulatory landscape.
As such, the Restaurant Association makes the following recommendations:
- Recommendation 1: that the defence under section 305(3) of the Act be retained.
- Recommendation 2: that a higher standard of proof for the defence under section 305(3) be specified and codified in legislation.
- Recommendation 3: that the timeframe to produce documentation be increased from 10 days to 15 days.
- Recommendation 4: that the Government partners with the Restaurant Association to upskill officials on the realities of the hospitality industry.
- Recommendation 5: that the Government partners with the Restaurant Association to expand the HospoCred scheme.
- Recommendation 6: that the Government partners with industry bodies such as the Restaurant Association to provide industry-specific education, support and resources for employers.
Introduction
The Restaurant Association of New Zealand (the Restaurant Association) welcomes the opportunity to make a submission on the Worker Protection (Migrant and Other Employees) Bill, and would like to make a verbal presentation to the committee in support of this submission.
The Restaurant Association shares the Government’s concerns around worker exploitation and works extensively to support efforts to combat this issue in our industry.
The Restaurant Association supports the Bill’s proposal to ensure better collaboration between the two regulators to undertake compliance and enforcement activity – to ensure cases of exploitation are not falling through the cracks.
However, it is our view that the lack of sufficient resourcing, particularly of the labour inspectorate, has meant that the Government is only ever reactive to exploitation – engaging after exploitation occurs.
We believe that without the proper resourcing in place, this piece of legislation will be merely another compliance burden on employers who are constantly having to familiarise themselves with the rapidly changing regulatory landscape.
New infringement offences
The Restaurant Association supports steps toward tackling exploitative behaviour as it not only places workers at risk, but also tarnishes Aotearoa New Zealand’s reputation as a destination of choice for migrant workers. However, we recommend that the introduction of new offences which are likely to disproportionately impact small and medium sized businesses should be fair, clear, and proportionate.
Thus, although the Restaurant Association is supportive of the principles behind the proposed changes, we believe the proposed offences must be amended to avoid the disproportionate impact they will have on small and medium-sized businesses—many of whom have struggled to keep up to date with the constant changes in the regulatory space over the past few of years, but are nonetheless attempting to do what is right.
Accordingly, we do not support the removal of the defence under s350(3) of the Immigration Act. An individual’s right to defend themselves is fundamental, particularly for business owners who are time and resource constrained.
- Recommendation 1: that the defence under section 305(3) of the Act be retained.
We understand it may have been the case that ‘bad’ employers attempted to rely on this defence, however we believe that rather than getting rid of the defence altogether, a higher standard of proof would be the effective way to mitigate a potential lack of sanction due to overreliance on the defence.
This could be achieved by defining what is meant by ‘reasonable due diligence’ and ensuring that any such definition is clear and unequivocal.
- Recommendation 2: that a higher standard of proof for the defence under section 305(3) be specified and codified in legislation.
10 working days requirement
The majority of the hospitality sector would fall into the ‘small’ category of business if defined by the proposed revenue scale of <$20m. Our sector is mostly comprised of owner-operators, who are personally involved in the day-to-day running of their businesses.
Our latest member survey shows that over 80% of hospitality businesses are under-staffed as a result of ongoing worker shortages.
This means that business owners’ access, time and resources are more limited than ever before, with owner-operators often having to fill roles in their business themselves. This leaves little time for business owners to stay up to date with the constant changes in regulations over the past few years.
In light of these factors, we believe that any potential requirement, especially one which involves a time element needs to be fair and proportionate to the industries it is likely to target.
We submit that the requirement to produce documentation is likely to lead to the sanctioning of small business owners in the hospitality sector who are busy trying to keep their business afloat, but are extremely time and resource constrained.
We acknowledge the need for a timeframe for employers to comply with requests from the labour inspectorate or immigration officers to ensure employers are not taking advantage of delays to create records to satisfy their legal obligations.
The Restaurant Association therefore recommends that the timeframe to produce documentation be increased from 10 days to 15 days. For an owner-operator in the Hospitality sector, this would in effect give three to five days where they are not on the floor of their restaurant or cafe and had time to catch up on administrative tasks – despite this being what in any other business would be considered a ‘weekend’.
- Recommendation 3: that the timeframe to produce documentation be increased from 10 days to 15 days.
Disqualify from managing or directing a company
The Restaurant Association supports the proposal to amend the Companies Act to disqualify those convicted of worker exploitation or people trafficking from managing or directing a company. Considering the vulnerability that migrant workers face to exploitation and human trafficking, it is only fair that we don’t allow offenders to operate businesses or continue to employ migrant workers.
Lack of adequate resourcing
Finally, although the Restaurant Association supports the intent of this bill, we are concerned that it will merely legislate an increased administrative burden on already overworked owner-operators without actually addressing the problem at hand.
There has been increasing media coverage of some of the shortcomings of the labour inspectorate system, namely, that only 10 percent of migrant exploitation complaints received by the labour inspectorate were investigated in the past year. Furthermore, it has been reported that labour inspectorate investigations have fallen by 70 percent since 2017.
Against this background, we believe that merely legislating an additional administrative burden on employers without addressing the underfunding of regulators is a futile attempt at passing the buck on to employers.
While we acknowledge the attempt to respond to the under-resourcing of the labour inspectorate by granting desk-based immigration officers document production powers, we are concerned that this would have significant knock-on effects, such as:
- Empowering individuals who are not familiar with the realities of running a business to impose requirements and sanctions, leading to inadequate and inaccurate enforcement;
- Further restraints and delays on the more key functions of Immigration New Zealand, such as visa-processing.
The Restaurant Association is always ready to work with MBIE to upskill officials on the realities of the hospitality industry and how migrant exploitation manifests itself in our sector, so they know what to look out for.
- Recommendation 4: that the Government partners with the Restaurant Association to upskill officials on the realities of the hospitality industry.
It is our view that labour inspectors are an ambulance at the bottom of the cliff approach to preventing worker exploitation, and we would like to see proactive efforts made to get ahead of the problem through expansion of the mandate of the inspectorate to be a unit that engages with employers to promote best practice, instead of acting simply as an investigative unit.
Our members are clear that we want to see the bad actors in our sector gone. However, we do not believe that merely relying on an already overworked and under-resourced public sector is the most efficient way to go about it.
The Restaurant Association earlier this year launched HospoCred, an industry-led accreditation scheme that was developed at the request of our members to show that our sector is committed to best practice, and we are eager to partner with the Government to expand the scheme to make it as effective as possible.
- Recommendation 5: that the Government partners with the Restaurant Association to expand the HospoCred scheme.
Businesses that achieve HospoCred-itation have displayed a commitment to best practice, increasing their impact and ultimately committed to ongoing development of themselves, their business and their team. The RestaurantAssociation firmly believes that with the Government’s partnership we can turn Hospocred into an expected qualification for businesses operating in the industry. This would not only lift standards for our sector as a whole but ensure migrant workers are treated fairly and paid transparently.
Expanding stand-down list
The Restaurant Association also supports the proposal to expand MBIE’s stand down list. In fact, almost two thirds of our members support this proposal.
However, government resources such as the stand down list are rarely kept in a single easy-to-access location, creating confusion and complexity within an already uncertain space for migrants and employers alike. This is reflected in MBIE’s Temporary migrant worker exploitation research programme: quantitative findings (January 2022) where migrants reported:
- The need for a proactive, ‘push’ approach to education, with more information both before and during their visa application; and
- The need for education that is better, more accessible and industry specific.
We believe that if the Government wishes to prevent worker exploitation at the outset, there needs to be a concerted effort and investment in developing and promoting tools that help all workers make informed decisions when applying to work in New Zealand. We believe HospoCred is that tool for our sector.
Workers can look for the HospoCred logo to be assured that their employer adheres to the highest standards of employment and safety. However, for HospoCred to be an effective and readily available tool for both domestic and migrant workers, we need the Government to help expand and promote this initiative.
Supporting the sector with education tools
The majority of employers strive to do right by their employees, but they struggle to keep up with all the changes to immigration law while running their business and as is the case for hospitality often at a miniscule profit margin of around 4 to 7 percent.
Given employers may face substantial fines should they find themselves in breach of the proposed offences, it is only fair and just that the Government provides business owners with adequate tools and resources to ensure they are aware of their newfound obligations.
To ensure employers are receiving accurate information relevant to their industry, the Government should partner with member organisations to develop these tools.
- Recommendation 6: that the Government partners with industry bodies such as the Restaurant Association to provide industry-specific education, support and resources for employers.