Rebuild ripoffs nail migrants

CONCERNED EMPLOYEES: Joseph Bautista and Michael Lindemann are concerned at the lack of action by authorities over their ex-employer who has left the country owing them wages and tax to the government.
CONCERNED EMPLOYEES: Joseph Bautista and Michael Lindemann are concerned at the lack of action by authorities over their ex-employer who has left the country owing them wages and tax to the government.

Christchurch's labour inspectors are facing complaints regarding migrant exploitation and are gearing up to take a stronger role monitoring firms involved in the rebuild. But is the inspectorate up to the task? CECILE MEIER reports.

Insurance and Government money is flowing into the rebuild, boosting Christchurch's economy. Faced with the task of reconstructing the city, many businesses have hired workers from all over the world. But, some people are saying, the rebuild has a dark underbelly.

The Ministry of Business, Innovation and Employment's Labour Inspectorate has recently almost doubled its staff, and is about to take a more proactive role to ensure employers provide minimum legal requirements to workers such as the minimum wage, or holiday pay. This move comes after a surge in complaints about migrant exploitation, and criticism that the organisation lacks teeth.


Joseph Bautista left his wife and three children behind in the Philippines to come to Christchurch last year. In his homeland, the average salary is $405 a month. He came for better prospects, and planned to send as much money as possible to his family back home. Like him, 1042 other Filipinos have been granted visas to work in Christchurch's rebuild since July 2011. They represent almost half of the total of the 2246 migrants granted visas to work in the rebuild over the past 2 1/2 years.

Bautista started working as a building inspector for labour supply company We Power in February last year. In June, his employer stopped paying him. Unsure of what to do, with his visa tied to the firm, he kept working without pay for eight weeks. When it became clear the money would not come, he found a new job and obtained a variation for his visa.

The Press reported last September that We Power had not paid Bautista, and about 28 other staff, mostly migrants, for several weeks' work. Some had to go into debt to pay for rent and groceries.

The company, co-owned by firms belonging to Bryan Staples and David Wilson, said it was struggling with "cashflow" issues at the time. Wilson told The Press last year that We Power owed about $60,000 to past and present staff, including Bautista. He said he could not pay them because the company was owed money by several subcontractors who had hired their employees.

Bautista, along with seven co-workers, filed complaints against the company in the inspectorate's office in Christchurch.

Six months on, he says, the handling of the case has been disappointing.

"We filed a complaint formally at the office. It took two hours . . . A week later, they emailed us that the case had been forwarded to Dunedin. No-one knows why, and I haven't heard from them any more after that," he says.

Bautista, now a carpenter for Corbel Construction, says he is still struggling financially. His family was able to come to live with him in New Zealand this month, but he is still in debt.

"I am in debt here and back home in the Philippines. I have lost hope to get my money back," he says.

It appears that Staples is still operating other local companies, and that Wilson has moved to the Philippines.

"The Labour Inspectorate did not do anything," Bautista says.

When asked about We Power, the inspectorate's Southern regional manager Steve Watson says he cannot comment on individual cases, but that these are "very serious circumstances". He says he will personally contact Bautista to discuss the situation.

"Sometimes these things take time because we have to gather lots of evidence. And it's important that as a regulator we don't make hasty decisions, because we want the decisions to be legally correct."


Information obtained through the Official Information Act reveals that the number of complaints about migrant exploitation are on the rise.

In the past five months alone, Christchurch's Labour Inspectorate has received five times more complaints than in the 21 previous months. The number of complaints has jumped from an average of 1.6 to nine a month.

Between January 2012 and September 2013, the inspectorate received 35 complaints. Of these, 16 were investigated. In the past five months, it received 49 complaints, but only nine prompted an investigation.

Watson says the increase has been significant, and he expects more to come.

"We're gearing up for a lot of work associated with the rebuild. Migrant workers are one of our priority areas."

When asked why there have been few investigations compared with the number of complaints, Watson says there could be a number of reasons, including lack of evidence, or complainants resolving issues themselves.

"We investigate all serious cases that meet our definition of exploitation."

Watson says the inspectorate has issued nine improvement notices, and 19 enforceable undertakings over the past nine months to companies in the southern region for breaches including not providing a written employment agreement, not paying holiday pay, or paying under the minimum wage.

Union Network of Migrants spokesman Dennis Maga says most migrants do not know how to lay a complaint, or are too afraid to do so.

"If migrants were not afraid to come forward, there would be many more complaints. There are a lot of problems, especially in the residential area," he says.

Christchurch's Migrant Centre manager Rex Gibson agrees.

"Migrant workers are very reluctant to come forward. Some of that comes from being a bit frightened that they might get sent home or that they might be inadequate," he says.

"We probably only see the tip of the iceberg."


Until recently, Christchurch's Labour Inspectorate had only seven staff, and investigated companies only after complaints. Labour MP Darien Fenton says the Government has a responsibility to put extra resources in to ensure that bringing migrants to Christchurch does not become a "complete scandal" as seen in the fishing industry.

"We have to protect our reputation and protect these migrants who've come to give us a hand in Christchurch."

Fenton, Maga and Gibson repeatedly said the inspectorate was under-resourced and needed to take a more proactive role as migrant workers were often too afraid to speak up.

But Watson says the inspectorate has recently taken six new staff on board, and their first task will be to run audits of companies associated with the rebuild.

"We're going to go in before we get complaints."

Gibson says it is "vital" that the inspectorate's new recruits receive cross-cultural training to understand the particulars of working with migrants from different cultures.

"In quite a number of institutions, I find that people are not equipped to deal with people from other countries."

Watson says all labour inspectors get investigation training, which includes the ability to relate, interview and put at ease people from different cultures.


The inspectorate is beefing up, but its powers remain limited. It can enforce only minimum employment rights, which leaves contractual issues outside of its scope.

So if a worker signs a contract for $18 an hour, but his employer decides to reduce his wage to $15 an hour, for example, the inspectorate will not be able to intervene because $15 is above the minimum wage.

Watson says workers can take contractual disputes to the Employment's Relation Authorities (ERA), seek help from an employment lawyer, or engage with mediation services.

But Gibson says it would be almost "impossible" for migrant workers to do so.

Migrants need special assistance to deal with language issues, lack of money and understanding of the New Zealand system, and a natural suspicion against government organisations, he says.

The state needs to have processes available for people who feel that they've been exploited, even if their claim falls outside of minimum requirements, he says.

Another limitation is that the inspectorate investigates companies rather than people.

Maga says it is easy for small firms acting as subcontractors to close shop and come back under a new name when a complaint is filed against them. He says this is happening more and more in Christchurch.

Watson is aware of the issue. The inspectorate's powers are normally against the company "but, in some circumstances, if everything fits into place, we can hold directors accountable".

However, the inspectorate does not have the ability to ban directors or shut down dodgy businesses, he says. "We're trying to use the legislation and the powers we have as best we can to manage that situation."

Gibson says these issues could damage Christchurch's reputation. "The last thing I want to see is for the city to get the reputation that it has become a place where, if you come to help in the rebuild, you're going to get ripped off."

Watson agrees, and says labour inspectors are passionate about "weeding out criminals masquerading as employers".

But he is cautious about commenting on the inspectorate's powers.

"We're hamstrung a bit by legislation . . . we're not hamstrung really, we've got good legislation. But we're just trying to do the best we can with the information that we get, and with our powers.

"We want to make a difference."


If an employer is found to be in breach of minimum standards of employment, such as not paying the minimum wage or holiday entitlements, the inspectorate can:

Negotiate an "enforceable undertaking" - where the employer agrees to put things right, and the employee is satisfied with the course of action. If employers don't comply with the undertaking, the inspectorate can take the company straight to the ERA.

Issue an "improvement notice" - a legal document that requires bosses to fix things and become compliant. If not complied with, the inspectorate can file with the ERA and seek a compliance order.

File straight to the ERA, which can issue financial penalties for not complying with employment laws of up to $10,000 for individuals and $20,000 for companies.

The inspectorate encourages workers who feel they are being exploited, or anyone who knows of people in this situation to phone 0800 209 020.

The Press