Dairy Farm, Owner Fined $215K for Exploiting Indonesian Workers

A Southland dairy business and its owner, an Invercargill Imam, have been ordered to pay $215,000 in penalties by the Employment Relations Authority (ERA) after having been found to have exploited three Indonesian migrant workers.

Of this amount, Rural Practice Ltd was ordered to pay $145,000, and business owner Reza Abdul-Jabbar must pay $70,000. Two of the three workers will each receive $10,000 of the penalties amount.

Both the business and Abdul-Jabbar were found to have breached numerous minimum employment standards by:

• not paying workers the minimum wage,
• not paying for holiday and leave pay,
• unlawfully deducting money from their wages
• forcing the workers to pay premiums
• not keeping accurate wage or time records.

Earlier determination

In an earlier determination released in February 2024, the ERA ordered Rural Practice and Abdul-Jabbar to pay the workers $52,056 in arrears in holiday pay, plus interest. They also voluntarily paid $64,387 to the workers for holiday pay and unlawful deductions during the hearing process.

Abdul-Jabber, who is a shareholder in companies owning property in Queenstown and Southland,  is the Imam of the Invercargill Mosque for the local Muslim community. He was also the religious advisor and mentor for at least one of the workers.

Silvia Abdul-Jabber, who was a co-owner of Rural Practice Ltd, passed away in September 2022 while the case was being heard and the Labour Inspectorate withdrew their claim for penalties against her.

The three workers came from Indonesia to work for Rural Practice Ltd on its Invercargill dairy farm between December 2017 and February 2022.

In December 2020 one of the workers contacted the Ministry of Business, Innovation and Employment’s Contact Centre to complain he had not been paid the salary recorded in his employment agreement or given the number of days off he was owed each fortnight.

He also complained that his employer had taken possession of his passport and ID and kept them even though he asked for them back.

A Labour Inspectorate investigation found that each employee had been given two versions of their individual employment agreements — one stating a higher salary which the employer provided to Immigration New Zealand (INZ) during work visa applications, and the other, provided to the Labour Inspector, stating a lower amount. None of the employees were paid the correct wages due to them.

It was also found amounts had been deducted from one of the worker’s wages, purportedly to pay for the services of a recruitment company in Indonesia.

Payslips manipulated

During the Labour Inspector’s investigation it was found that payslips for the workers had been manipulated. In one case there were two sets of payslips for the same period — one set with the hourly rate of pay inflated to satisfy INZ visa requirements and the other set with a lower rate of pay and correspondingly more hours worked, provided to the Labour Inspector.

Simon Humphries, Head, Compliance and Enforcement, Labour Inspectorate, said it was unforgiveable that business owners would knowingly and deliberately exploit vulnerable workers they had brought to New Zealand.

“These workers came to this country in search of a better life but they were taken advantage of by those they trusted.

“This was deliberate and systemic exploitation. The penalties imposed demonstrates the serious nature of the breaches and sends a clear message to business owners who choose to exploit their workers for financial gain. There will be consequences.”

Humphries said the Labour Inspectorate would continue to vigorously monitor potential migrant worker exploitation and enforce compliance when necessary. “We are pleased, that through our intervention in this case, we were able to help these vulnerable workers.”

In his determination, Authority member Alastair Dumbleton noted that the manipulation of the workers’ payslips was an indication that Rural Practice Ltd through its directors had actively contrived to mislead statutory officials of INZ and the Labour Inspector.

He said the breaches happened because of “an attitude held by Mr Abdul-Jabbar of disrespect for employment and immigration statutory rules and regulations – ‘officialdom and bureaucracy’ – and also an attitude of indifference to the sanctity of contract.

“In short, as a director and owner of the employer Rural Practice Ltd, when it suited him, Mr Abdul-Jabbar knowingly disregarded the law governing employment. He took advantage of [the migrant employees] because they were not from New Zealand and were from Indonesia, where he too was from.”