Southland Dairy Farm Loses Exploitation Appeal

• Court rejected appeal over serious worker exploitation breaches and upheld $215,000 penalties.
• Owner’s role as a religious mentor highlighted imbalance of power over migrant employees.
• Judge ruled workers’ vulnerability and systemic breaches justified penalties imposed by the Authority.

A Southland dairy farm and its owner have lost an appeal against $215,000 in penalties for exploiting vulnerable migrant workers. The Employment Court upheld the original ruling by the Employment Relations Authority (ERA), which found Rural Practice Limited (RPL) and owner Reza Abdul-Jabbar had committed multiple breaches of minimum employment standards between 2017 and 2022.

These breaches included underpaying workers, failing to provide proper holiday pay, making illegal deductions from wages, requiring premiums from workers, and keeping poor employment records. The affected employees were three Indonesian nationals.

Mr Abdul-Jabbar, who also acted as a religious advisor to at least one of the workers, used his position of influence, contributing to a clear imbalance of power. The workers, as new immigrants unfamiliar with New Zealand employment law, were in a vulnerable position.

In a separate finding earlier this year, RPL and Mr Abdul-Jabbar were penalised an additional $15,000 for obstructing the initial investigation.

In the appeal, RPL and Mr Abdul-Jabbar claimed the penalties were excessive. They argued the starting point was too high, their financial position warranted a greater reduction, and that their support of the workers — including accommodation and immigration help — should be considered. They also claimed that the impact on workers had been overstated and that not all breaches led to financial harm.

However, Judge J C Holden disagreed with all these points. She found the ERA’s original approach and penalty level were appropriate given the "multiple, systemic, and intentional" breaches. She said financial incapacity had not been proven, and the support offered by the employer did not reduce the seriousness of the offences.

She also highlighted the imbalance of power, saying, “The Authority found that there was a clear imbalance of power between the employees and Mr Abdul-Jabbar and the plaintiffs took advantage of the employees as new immigrants from Indonesia, who lacked knowledge of local law and employment requirements in New Zealand. The Authority also noted some other matters that disadvantaged the employees; they were vulnerable workers.”

The appeal was dismissed in full, with the original penalties remaining in place.

Labour Inspectorate Compliance Manager for the Southern Region, Brendon Strieker, welcomed the decision, stating, “It reinforces that employers cannot hide behind complexity or goodwill when they fail to meet basic legal obligations.” He added that the penalties reflected the seriousness of the breaches and confirmed that there would be consequences for employers who exploit workers.