A Labour Inspector of the Ministry of Business, Innovation and Employment v Prisha’s Hospitality (2017) Ltd T/A Royal Cambridge Indian Restaurant

Two related companies, both owned and managed by Ajay Sharma and Kavita Sharma, operated restaurants in Cambridge and Whakatane. They employed several migrant workers from India, some on visas tied to the employer. The Labour Inspector investigated claims that these employees were not paid minimum wage, holiday pay, or public holiday pay, and that unlawful deductions and premiums were required.

The Royal Cambridge Indian Restaurant ceased operations after a fire, and the Roquette Restaurant was later sold. The claims covered a period from December 2017 to June 2019. The Labour Inspector sought declarations of breach, compensation for arrears, and penalties against the companies and their director/shareholders.

The Employment Court found that the companies and their director/shareholders breached minimum employment standards. The Court rejected arguments that some workers were volunteers, noting that the actual work performed and arrangements showed they were employees entitled to minimum standards.

The Court ordered compensation for arrears of wages, holiday pay, and public holiday pay, as well as interest. The Court also found unlawful deductions and premiums had been required from employees. Further submissions were required on non-pecuniary loss and penalties, but the judgment confirmed that directors and shareholders could be personally liable for breaches.

This case is a warning for business owners, especially in hospitality and sectors employing migrant workers. Minimum employment standards are mandatory and cannot be contracted out of, even by informal arrangements or by calling workers volunteers.

Directors and shareholders who actively manage the business can be personally liable for breaches. Employers must keep accurate records, pay at least minimum wage, provide proper leave entitlements, and avoid unlawful deductions or requiring premiums from employees.

Employers should regularly review their payroll and employment practices. Even if a worker starts informally or is called a volunteer, if they are performing work, they are likely an employee and entitled to minimum standards.

Pay records must be accurate and complete. Any deductions or payments outside normal wages must be lawful and documented. Employers should also ensure that staff on visas are treated fairly and not exploited.

The Employment Relations Act 2000 sets out minimum employment standards, including minimum wage, annual and public holiday pay, and rules against unlawful deductions and premiums. Part 9A of the Act gives Labour Inspectors powers to investigate and enforce these standards.

Employers must comply with these standards regardless of the size of their business or the nature of their employment arrangements. Directors and shareholders can be personally liable if they are involved in breaches.

To avoid breaches and penalties, employers should follow these practical steps: