A company which ran two South Canterbury dairy farms has been fined $30,000 for failing to comply with employment law after breaching minimum employment standards in relation to 24 workers.
The Employment Relations Authority (ERA) has ordered Greywacke Farms Limited and its director Dietmar Kopetschny to pay $20,000 and $10,000 respectively in penalties for failure to comply with employment law.
The company ran two dairy farms in South Canterbury that supplied milk to Fonterra while Kopetschny also operated as a sole trader, working as a share-milker, a statement from the Ministry of Business, Innovation and Employment (MBIE) said.
The Labour Inspectorate, part of MBIE, investigated the businesses in 2019, after receiving complaints from former and current employees.
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MBIE says the investigation revealed breaches of minimum employment standards in relation to 24 workers across the operations. About half of them were migrants on temporary work visas.
The inspectorate found the employer had a complicated rostering system and manually recorded payroll and leave data, the statement said.
This resulted in failures to keep compliant wage, time, holiday and leave records, failures to calculate and pay correct holiday pay to eight employees, and failure to pay minimum wage to at least one employee.
The employer also failed to obtain consent from one employee for making deductions from wages for providing the employee with accommodation.
The Employment Relations Authority (ERA) found the breaches caused significant material hardship to some of the low paid employees and gave the employer an unfair competitive advantage over businesses that comply with legal requirements.
The ERA determined the breaches were intentional and could have been avoided by using publicly available guidance from MBIE or Federated Farmers, or investing in a more efficient and compliant payroll system.
Kopetschny was made personally liable for $10,000 in penalties. Of this, $7500 will be paid out to three former employees.
Labour Inspectorate acting regional manager Callum McMillan said the dairy farming industry is a focus area for the Labour Inspectorate.
We have been working together with the dairy industry over a number of years to lift employment law compliance.
The industry made significant improvements to put assurance systems in place and have readily available support for farmers on matters of employment.
This makes it even more disappointing to find there are still dairy farmers that undermine minimum employment standards. Employers cannot cut their overheads by taking advantage of workers.
McMillan said the inspectorate had also engaged with Fonterra about promoting compliance within their supply chains.
Large brands like Fonterra have an important role to play in taking leadership to ensure a fair treatment of workers from the top down.
Failing to do so damages the reputation of the brand, the industry and of New Zealand as an exporter, McMillan said.