Napier construction company and director to pay $96,000 for breaches involving migrant workers

Napier developer Malcolm Herbert and his construction company MAH Enterprises face penalties totalling $96,000 after 42 breaches of employment law.

Napier developer Malcolm Herbert and his construction company MAH Enterprises face penalties totalling $96,000 after an investigation found 42 breaches of employment law involving migrant workers.

A labour inspector from the Ministry of Business, Innovation and Employment began an investigation two years ago after an employee of MAH Enterprises alleged he had not been paid for annual holidays he thought he was entitled to.

The inspector’s report concluded that MAH had failed to keep wage, time, holiday and leave records. It said 13 employees did not receive annual leave entitlements and for another worker, MAH was using an individual employment agreement that did not comply with the law.

However, the Employment Relations Authority (ERA) said that the inspector was unable to investigate properly because Herbert and the company had failed to provide all the information requested and required.

“Despite repeated attempts to engage with Mr Herbert to obtain the material required to complete her investigation, Mr Herbert either did not respond, sought extended deadlines that he also did not meet and then, when he provided information, it was not complete,” ERA member Sarah Kennedy-Martin said in a recently released decision.

Herbert at one point told the authority he was unable to file submissions because of the Napier floods, and that a computer had been stolen in a burglary.

Kennedy-Martin said the inspector decided to continue the inquiry regardless, and found 14 breaches of the Employment Relations Act for failing to keep accurate wage and time records, and a further breach of the same law for providing an employment agreement that did not comply with legislation.

The inspector alleged 14 breaches for failing to keep holiday and leave records, and another 13 breaches of the Holidays Act for failing to provide annual leave entitlements.

MAH faced potential liabilities of $960,000 and Herbert as an individual $420,000.

However, the inspector said that breaches involving multiple employees could be reduced to one each, meaning a reduction in the total number of breaches from 42 to four, and Kennedy-Martin agreed.

This would amount to a maximum penalties total of $80,000 for MAH and $40,000 for Herbert, she said.

She said it was an aggravating factor that MAH had employed migrant workers with visas tied to their employment “who were entitled to be treated with respect in the New Zealand workforce”.

Because of the record-keeping breaches, the inspector was unable to assess whether minimum wage had been paid for each hour worked, whether correct public holiday or alternative holiday entitlements were provided, and whether any deductions were lawful.

Kennedy-Martin set the penalties at 80 per cent of the maximum. She ordered that MAH pay a penalty of $64,000, and that Herbert pay $32,000.

Half the money would be split between the 14 affected employees.