Mistreated Dunedin massage workers harassed, underpaid and sacked

Vulnerable workers at a massage centre in Dunedin have been vindicated by the Employment Relations Authority ruling. Photo / Toa Heftiba

Vulnerable workers at a massage centre in Dunedin have been vindicated after the Employment Relations Authority found they were harassed, underpaid, threatened, misled, given illegal contracts and sacked without cause.

Two employees of Elements Therapeutic Massage Ltd in the Meridian Mall were underpaid $12,740 throughout the six-month ordeal and the harassment of one employee resulted in a police complaint being made against a manager.

The business was owned by Xuan Zhang, of Christchurch, but was run day-to-day by newly qualified massage therapist Ping Du, who met Zhang in Christchurch and convinced him to start the venture in May 2017, as Du could not do so himself because of the status of his work visa.

A recent graduate known as Rebecca was on an open work visa when she was recruited by Du in April 2018.

Her employment agreement said she would be paid $16.50 an hour but was actually paid on a commission basis of 40-45 per cent and as a result only made $40 a day on occasions, without ever getting holiday pay or payslips.

Another graduate on an open work visa known as Emily was employed by Du in May 2018, who initially told her he was the owner and gave her permanent part-time hours, despite her being on a casual contract.

Rebecca had to frequently question her hours and pay with Du, who would not divulge Zhang's contact details to either employee.

Both felt uncomfortable working alongside Du, who left for a holiday in China from June to October 2018.

There, he sent emails that were "objectively harassing and inappropriately personal in content", the authority found.

Emily supported Rebecca to make a complaint to the police about Du's behaviour.

While he denied subjecting Rebecca to unwelcome attention, he was not found to be credible given the plentiful amount of documentary evidence, the authority found.

When both staff members threatened to quit, Zhang visited in July and convinced them to stay by promising that Du would not return to the store.

During the meeting, Emily informed him she had made a complaint to the labour inspectorate about wages.

Zhang suggested the employees could become contractors and assured her that arrears would be sorted out.

The authority found the contractor proposal was a "sham" on Zhang's part, given he was experienced in running a courier business while Emily had little understanding of the relevant employment rules and Rebecca was desperate to keep her job.

Emily quit for health reasons in September and police advised Rebecca when Du returned to New Zealand on October 5.

The next day she contacted Zhang, who summarily dismissed her with accusations of mismanagement, including of the centre's money.

His email was found to have an "an objectively threatening tone", with threats of legal action and of reporting Rebecca to Immigration New Zealand or the Inland Revenue Department.

While Zhang had told the employees he would deal with Du's behaviour, it had been just a ploy to keep Rebecca running the business until Du returned, the authority found.

Du was soon earning more than twice his previous wage and continued running the business until October 2021.

Zhang told a labour inspector that the two employees had been "extorting and threatening" him and dismissed Rebecca's report of harassment as "very ridiculous".

The authority found the 14 breaches of employment law to have been aggravated by the status of the employees as young and "objectively vulnerable" migrants.

Both Zhang and Du were found culpable for the breach of minimum standards, with Zhang held personally liable for arrears.

A penalty of $8000 was imposed on Zhang and $4000 on Du, with Rebecca and Emily to get $4000 each. Costs were reserved.

While Elements Therapeutic Massage is still registered, it has ceased to trade and the Meridian Mall premises is now home to another massage business.

A police spokesman declined to comment on Rebecca's complaint, citing privacy reasons.