Trouble at the Chateau: MBIE is investigating "minimum employment standards" at one of the country's most iconic hotels. Photo / Alan Gibson
A Government investigation is probing allegations of staff mistreatment, including labour law abuses, at the Chateau Tongariro Hotel.
The Ministry of Business, Innovation and Employment (MBIE) has confirmed an ongoing investigation into "minimum employment standards" at the Chateau, one of the country's most iconic hotels.
Workplace health and safety regulator WorkSafe New Zealand has also been on-site at the hotel in recent months and issued three improvement notices.
Staff and former staff who spoke to the Herald on condition of anonymity fearing reprisal (referred to hereafter as staff) accused managers at the hotel, some of them recently departed, of "stealing hours" from workers by deleting records so that work went unpaid, and also of "forcing" staff to sign out after working a shift, only to require them to perform further duties unpaid.
Staff told the Herald that they believe that, during some periods, managers were docking employees hundreds of hours of work per month. They also allege that some hotel staff felt pressured into working extra hours for two restaurants in the region, owned by one of the Chateau's managers who recently resigned.
Staff also allege the removal of hotel supplies and equipment by some managers. And they described what they felt was an effort to cover up an incident of worker distress and self-injury and recast it as an accident.
Those who spoke to the Herald said that many employees who had secure rights to work in New Zealand resigned their positions at the hotel over the past several years.
However, they said that some of the workers were "vulnerable" to the loss of employment because of the terms of their work visas, and that these workers were reluctant to challenge managers for fear it would endanger their right to live and work in New Zealand.
The Chateau, located in the Central North Island's Tongariro National Park, is owned by KAH New Zealand, in turn owned by Singapore-based parent company, KAH Motor, and controlled by the Loh family.
KAH owns both the Chateau Tongariro and the Wairakei Resort in Taupō. The company's only New Zealand-based director Atif Khan is on leave until October 27.
Peter Pysk, vice president of operations - Oceania for KAH's sister company Bayview International has been on-site in New Zealand in recent months. He declined to comment on either the Chateau staff allegations or the MBIE investigation. KAH financial statements say Bayview provides management and marketing services to KAH and is also a subsidiary of KAH Motor.
A spate of change has occurred at the company in recent months. On April 5, Atif Khan, hotel manager at the Wairaki Resort, became a director of KAH; on the same date Taupō-based Jerome Dyer ceased to be a director.
Several key managers, including hotel general manager Saif Rashid, have also left. Rashid, now a manager at the Stamford Plaza Auckland, declined to speak to the Herald about allegations made by Chateau staff relating to the period when he was general manager.
"I have nothing to do with that company [Chateau Tongariro]," Rashid said before ending the conversation.
Rashid was general manager at the Chateau from January, 2020 until last month, according to his LinkedIn page which was taken down in the hours after he spoke to the Herald.
Staff who spoke to the Herald described a "toxic" environment spanning several years, where, in addition to unpaid hours, they say some felt that they were also put under pressure to work for two Indian restaurants (Monsoon Indian Cuisine, Taumarunui and Monsoon Indian Cuisine, Tūrangi) owned by the hotel's former front-of-house manager, Udey Singh. They also made complaints to other Chateau managers alleging that Chateau supplies and equipment were being removed and diverted for use in Singh's restaurants.
Monsoon Taumarunui has been temporarily closed since late May because of a staff shortage, but is expected to reopen next month.
Singh refuted allegations that Chateau supplies or equipment were used in his restaurants. He also refuted allegations that Chateau staff were pressured to work for him.
"I've never so much as taken a bottle of milk from the Chateau... and my restaurants have all the receipts, all the invoices and weekly orders," he said.
Singh said that one Chateau staff member had periodically worked for his restaurant, and that the man's visa terms allowed this, and that the arrangement was both legal and mutually agreeable.
Singh said he resigned from the Chateau on October 7, having returned from a period of several months' leave in India. He said he had worked at the Chateau for nine years.
"I am aware that the new regional manager Peter Pysk has been asking questions, talking to staff about the allegations... the allegations that you [the Herald] have mentioned, about taking things from the Chateau, but I was never asked about these things and I've not had the opportunity to defend myself and I don't think that's right," Singh said.
On his return from leave, Singh said he was excluded from the Chateau's daily morning meeting and was generally made to feel unwelcome. He said he was not asked to resign but took the decision himself.
Several staff members also recounted an episode they variously described as an episode of "exhaustion" and "anger" of last January. After an uninterrupted spell of several weeks' work and long daily hours over Christmas and New Year, a housekeeping manager punched through the glass in hotel windows with his bare hands, seemingly in a fit of distress. The man was taken to hospital, first in Taumarunui and then in Waikato.
The staff allege that some managers hoped to cover up the event and prepared a false account of the incident, both for the owners abroad and in order to make an ACC claim. A human resources manager, they say, refused to corroborate this report and ultimately resigned.
The Herald understands that while many staff remained unsatisfied with its results, the Chateau's Singapore-based owners called in a local law firm to conduct an independent investigation. While it was established that the housekeeper had not hurt himself accidentally, and the hotel management's original incident report was determined to be factually incorrect, the investigation did not find wrongdoing.
Asked about the incident, Singh said that as hotel duty manager at the time of the injury, he filled in the hotel's "incident report" and stated that the man had punched through a number of glass windows.
He said that the doctors who treated the man were told, "not correctly," by the injured man that he had accidentally slipped in the shower. Singh, who drove the man to seek treatment, said that though he was present with doctors, he did not correct this version of events with them.
A WorkSafe spokesman confirmed that the agency visited the Chateau in August, "to assess how it is meeting its obligations under the Health and Safety at Work Act 2015, with a particular focus on worker engagement obligations".
WorkSafe has issued three improvement notices, requiring the Chateau "to have a framework for incident reporting, effective worker engagement practices, and worker training," the spokesman said.
He said the agency "did not investigate specific allegations" and instead conducted a "general workplace assessment with a focus on reviewing the systems and processes in place".
Stu Lumsden, national manager at the Labour Inspectorate, confirmed that MBIE's investigation began on June 23. It remains ongoing and Lumsden said there is no set timeframe for its conclusion.
The Chateau was built in 1929 in the style of the grand Canadian railway hotels, though in recent years parts of its interior have become quite shabby.
It remains an important tourist attraction in the region, which is currently reeling from the news that financial distress has pushed the local ski operator, Ruapehu Alpine Lifts, into voluntary administration.
Ruapehu Alpine Lifts operates both the Whakapapa and Tūroa skifields (the Whakapapa ski area is just a 10-minute drive from the Chateau).
KAH, however, appears to be in stronger financial health. Kathy Guy, who managed the Chateau for 20 years and retired in 2018, said the hotel had done a lot to reduce its reliance on the ski season and diversify. She said attractions like the nearby Tongariro Alpine Crossing give a considerable lift to the summer season. Guy said she had no knowledge of current circumstances at the hotel and that in her time the staff were much like an extended family.
KAH's most recent financial statements (for the year ended 31 December 2021) show a profit for 2021 of $2.22 million, and of $4.62m for the previous year.
In each year respectively the company recorded a grant of $1.8m and $2.38m through the Government wage subsidy and its resurgence support payment.
The company's cash reserves (including short term deposits) sat at $18.8m last year, the statement shows.
It's understood that the Chateau employs dozens of staff on work visas, which are tied to KAH or Bayview as their employer.
Companies which are found to have breached minimum employment standards can face fines and MBIE restrictions on recruiting migrant workers.
Some analysts say the stock is oversold.