Judge Holden said in her decision the couple showed little remorse for the compliance breaches and even falsified documents to justify some of their behaviour.
The judge found the Sharmas breached “numerous” minimum employment standards of the workers, who were all of Indian descent, between December 2017 and December 2018.
“Some employees spoke of feeling caged or like a slave,” she wrote in her decision. “Those employees were isolated from family, several were young and most were visa-dependent.”
She said the employees gave credible evidence of the stress they felt working for the defendants.
“The inherent inequality of power in the employment relationship helped make the breaches possible.”
An investigation by the Ministry of Business, Innovation and Employment (MBIE) found the Sharmas were not paying the correct minimum wage; not paying for work done; not paying for holiday, public holiday, sick and bereavement leave; making two employees “pay thousands of dollars in premiums”; and deducting money without the employee’s consent.
The investigation found staff at Prisha’s were forced to make payments to each other as “premiums” of around $150 per week.
The Sharmas’ counsel Paul Wicks, KC, submitted the payments weren’t a breach of the Wages Protection Act as Prisha’s itself hadn’t received any funds.
However, the judge found the payments were still for the restaurant’s benefit and the act extended to “indirect payments”, including when an employee was paying money to satisfy the debt of the employer.
Judge Holden said while she found the Sharmas unreliable on some points, she also found some of the evidence from employees unreliable. At times they exaggerated the hours they worked, so she relied on bank records or other documentary evidence available to come to her conclusions around how many hours each employee worked.
She found both husband and wife were involved in the breaches, and that despite Ajay Sharma being the director of both companies, Kavita Sharma exercised “significant influence or control”. Both were active and personally engaged in running the restaurants.
“Accordingly, they both had knowledge of the essential facts that established contraventions by the employers. They were both persons involved in those breaches.”
The Shamas were ordered to pay compensation of $104,500 and arrears of $43,522.
Pecuniary penalty orders were made against Ajay Sharma for $45,000, Kavita Sharma for $22,500, and against the Cambridge restaurant of $100,000 and the Whakatāne restaurant of $30,000.
The couple were also ordered to pay costs of $78,429, bringing the total amount they have been ordered to pay to $423,951.
If the owed monies couldn’t be paid by the companies, the Labour Inspector was allowed to recover it from the couple themselves.
The Labour Inspectorate had obtained a freezing order against the defendants, allowing it to secure funds from the couple to pay the arrears and compensation costs in full to the employees.
The Employment Court currently holds $225,000 plus interest, and Judge Holden ordered $36,937 initially be paid to the employees.
The monies will remain in the court’s control pending further orders.
MBIE’s Labour Inspectorate head of compliance and enforcement, Simon Humphries, said vulnerable workers had been “exploited and denied basic minimum employment standards”.
“As a result, they suffered considerable distress. Exploitation of workers is unacceptable. This was deliberate and systemic offending across two businesses,” Humphries said today in a statement.
“The penalties awarded demonstrates the serious nature of this offending and sends a very clear message to businesses who exploit vulnerable workers for their own financial gain. The consequences of such actions could be severe so it’s not worth the risk.”
Belinda Feek is an Open Justice reporter based in Waikato. She has worked at NZME for eight years and been a journalist for 19.
