Hospitality Business Magazine

Restaurant pays out after MBIE’s freezing order

rsz_taste_of_egyptThe Taste of Egypt Ltd paid $91,000 in penalties and arrears owed to two workers to the Employment Court, pending their appeal, after the Ministry of Business, Innovation and Employment’s (MBIE) Labour Inspectorate issued a freezing order against the company and its directors.

An extensive investigation by the Labour Inspectorate last year found the Taste of Egypt’s Nelson restaurant failed to pay minimum wages or statutory holidays, and failed to provide annual leave to two migrant employees from India.

The two chefs worked in excess of 70 hours and were only paid for 30. The company also failed to keep adequate time and wage records in accordance with the Employment Act.

The Employment Relations Authority (ERA) ordered Taste of Egypt Ltd to pay more than $91,000 in penalties and arrears owed to workers in a decision last November.

The Nelson restaurant has since been sold and the decision is being appealed by the company.

After becoming aware the company had sold their remaining Christchurch business, the Labour Inspectorate believed the directors were preparing to leave the country permanently or dissipate their assets. An application was made to the Employment Court and a freezing order was granted on 5 April 2016.

The bank accounts of the company and the directors were frozen along with the assets owned and controlled by both, to the value of the outstanding debt. Since paying the outstanding debt to the Employment Court, the freezing order has been lifted from the company and its directors.

Labour Inspectorate Wellington Regional Manager Kevin Finnegan says exploitation of workers, such as paying less than the minimum wage, will not be tolerated.

“The Inspectorate will use all legal avenues available to ensure those determined to escape their financial and legal responsibilities are held to account. MBIE is pleased that this action has seen the funds currently owed paid to the Court.

“MBIE takes employment law breaches very seriously and is working proactively to crack down on it throughout the country.”

Employers who breach employment law will be subject to enforcement action. From 1 April 2016, most serious breaches can carry penalties of up to $50,000 for an individual and the greater of $100,000 or three times the financial gain for a company.

MBIE encourages anyone in the situation of being exploited or who knows of anyone in this situation, to call its contact centre on 0800 20 90 20 where their concerns will be handled in a safe environment.