Holiday park and owner fined for gross worker exploitation

Media Release

16 December 2019

Holiday park and owner to pay $680,350 for gross worker exploitation

A North Island holiday business and its owner have been banned as employers, and will pay a record $680,350 in penalties and unpaid wage arrears to three migrant workers, who described their situation as being “like a nightmare”, and a “prison”.

New Zealand Fusion International LTD and its owner Shenshen Guan, which operates a holiday park in Reparoa, is required to pay this amount within 28 days.

“This judgement sends a strong message that employers who exploit their workers will be put out of business, and charged penalties far in excess of what they may have gained,” says Labour Inspectorate National Manager Stu Lumsden.

“The Chief Judge of the Employment Court also reinforced that such conduct requires firm denunciation to drive home that worker exploitation is totally unacceptable in New Zealand.”

Following a Labour Inspectorate investigation into New Zealand Fusion, the Court heard two of the workers mortgaged a house and withdrew their children’s university funds in China to each pay a $45,000 premium “bond” to Ms Guan before coming to New Zealand to work at the holiday park. They arrived on visitors visas and began working unlawfully under false promises of being paid.

The Court heard the three workers worked on various jobs at the holiday park seven days a week for no wages. Ms Guan had changed their employment contracts and then used the fact that they had no working visas as a reason not to pay them. She also said their “free” food and accommodation while staying onsite should also offset any expectation of payment.

The Court heard the workers referred to their time at the holiday park as being “a nightmare”, felt it was like living in a “prison”, and one of them said they “wanted to die”.

“Any worker is lawfully entitled to minimum employment standards. Any employer who thinks they can flout these laws, especially by being in a rural environment where they think isolating workers is sight unseen, can expect to be heavily penalised.”

Fusion has been ordered to pay $300,000 in penalties, with Ms Guan ordered personally liable for a further $150,000. Each of the three workers will receive $100,000 of this total, on top of between $69,000 and nearly $92,000 they are to receive in unpaid wages and compensation. New Zealand Fusion and Ms Guan have also been banned from employing staff for 18 months.

“None of us want to believe that this sort of thing can happen in New Zealand. But it is happening and we have to deal with it if we want to maintain our reputation as a fair country to work in and to trade with,” Mr Lumsden said.

“Our tourism sector, like other export sectors, is especially vulnerable to consumer concerns about the treatment of its workers. Increasingly the Labour Inspectorate is seeing a range of industries taking deliberate and systematic steps to assure they’re treating their workers properly, including protecting industry reputation. This is a positive development and the Inspectorate encourages and supports these moves by industry leadership,” Mr Lumsden said.

The Government has also committed to making policy changes to address migrant exploitation in New Zealand. MBIE is leading the Temporary Migrant Worker Exploitation Review, and recently consulted on a set of proposed changes that will prevent migrant exploitation, protect exploited migrants, and better enforce appropriate working conditions and immigration obligations. Any changes as part of the Review will be implemented in 2020 and beyond.

MBIE encourages anyone concerned about the employment situation of themselves or someone they know to call its contact centre on 0800 20 90 20, where their concerns will be handled in a safe environment. Migrant workers and those new to the workforce are also encouraged to assess their employment rights knowledge with this online tool on the Employment New Zealand website.

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