Restaurant chain owner fined for underpaying staff

16 March 2018

Restaurant chain owner fined over $40,000 for underpaying staff

An Indian restaurant chain has been fined more than $40,000 in penalties after several breaches to employment law, despite having paid more than $24,000 to staff in arrears previously.

Shamiana Limited and Shamiana Enterprises Limited, with Satish Shetty as the sole director and shareholder, have been fined $41,000 in penalties after several breaches to employment law.

Following complaints received by the Labour Inspectorate, it’s been found that Mr Shetty failed to pay staff minimum wage and holiday pay, as well as keep correct employment agreements.

Labour Inspectorate regional manager David Milne says, “The companies collectively employ 120 staff across 22 restaurants throughout the country, and we’ve had several complaints dating back to August 2015 of Mr Shetty not upholding his staffs’ basic employment rights.”

Despite arrears previously being paid to employees and corrective action taken to adhere to the Inspectorate’s improvement notice, breaches continued to occur.

“The continuous nature of these breaches, despite remediation at the time, shows that Mr Shetty wasn’t taking his obligations as an employer of 120 staff seriously,” says Mr Milne.

“It was surprising that even after several complaints to the Inspectorate; Mr Shetty was not deterred from underpaying his staff. One of the breaches uncovered was for unpaid work trials for staff – a practise that’s illegal under New Zealand employment law.”

These repeat breaches of the law meant that Shamiana Limited was ordered to pay $33,000 and similarly, Shamiana Enterprises Limited was ordered to pay $18,000.

“Employers should understand that the Inspectorate follows up earlier non-compliance with a zero-tolerance approach. Additional strong penalties will be sought where any ongoing non-compliance is found.

“Not only is underpayment and mistreatment at the detriment of employees, it also gives companies an unfair commercial advantage over their law-abiding competitors.

“On top of this, reputations are left tarnished and the National Consumer Survey 2016, conducted by Consumer Protection found that knowing a business treats its workers fairly regularly affects consumers’ purchasing decisions,” says Mr Milne.

Anyone concerned about their employment situation, or the situation of someone they know, should call 0800 20 90 20 where they can report their concerns in a safe environment.

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