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last updated 22/10/2019

Super Liquor welcomes record $200,000 fine for former franchisees

last updated 22/10/2019

22 October 2019 – An Employment Court ruling which has seen two former franchisees fined for serious employment law breaches has been applauded by the franchisor, which says it has no tolerance for abuse of legal obligations

Husband and wife, Paramjeet Singh Parihar and Kuldip Kaur Parihar, who owned two Super Liquor stores in Hamilton have been ordered by the Employment Court to pay a record $200,000 in penalties for serious employment law breaches. $80,000 of this will be paid as compensation to the workers for the mental and emotional hardships they endured at the hands of their employers. This is in addition to $250,470 they already repaid to six former employees for minimum wage and holiday pay arrears. Failure to comply with these Court orders can lead to imprisonment.

The six employees worked at Super Liquor Flagstaff and Super Liquor Hillcrest between 2010 and 2017. They were paid between $8 and $11 an hour, which was well below the minimum wage in any given year. One employee alone was compensated $106,076 for seven years of underpayments.

Some of them worked more than 60-70 hours per week – including on public holidays. They had not been provided with any sick leave, holiday pay or public holiday entitlements. Where they took time off, they were either not paid or required to return the money to their employer or make up the time they were away by working for free. The employers also failed to keep accurate employment records which the Court saw as an attempt to cover up their abuse.

All employees in question were migrant workers from India on temporary visas. Mr and Ms Parihar are themselves of Indian descent. The Judge noted this makes the way they treated their workers even more ‘inexplicable and heinous’.

No place for this kind of behaviour, says franchisor

Campbell McMahon, Chief Executive of Super Liquor Holdings Limited said he is pleased with the ruling of the Employment Court. 

‘We’re pleased the court has come out hard and made an example in this case. Super Liquor simply will not tolerate any abuse of fundamental obligations under employment law or exploitation of employees by its franchisees.

‘There is no place in the New Zealand business community for this kind of behaviour and we hope that the court’s decision today sends a clear message to employers up and down the country about compliance with employment legislation and its importance,’ he said.

Super Liquor Holdings Limited (SLH), as the master franchisor of the Super Liquor brand, operates a franchise agreement with each of its 152 stores, requiring franchisees to comply with all aspects of NZ law, including employment legislation. Any franchisee that breaks the law will be in breach of their franchise agreement.

SLH does not hold the employment relationship with any store employees. The legal relationship is between the franchisee and the employee. ‘Nevertheless, we take the welfare of all Super Liquor people extremely seriously, and we expect our franchisees to do the same’, said Mr McMahon.

‘That is why we are extremely disappointed with the events that have led to today’s judgement. The ex-franchisee has been found to have deliberately and repeatedly broken the law over a long period of time and the judgment reflects the extent of the offending.

‘Our franchisees are in a position of trust and we hold them to high standards of behaviour. Unfortunately, the ex-franchisees fell far short of that standard and in doing so let down their employees, fellow franchisees and the Super Liquor brand.’

‘Operating a compliant and safe workplace is paramount to Super Liquor and we comprehensively support our franchisees to meet all their obligations under NZ employment law. The level of support we provide to them means there is no excuse for franchisees not meeting their legal obligations.

‘Earlier this year we put in place steps to enhance our already-comprehensive employment law compliance programme to close gaps and help ensure people meet their obligations.

‘By providing additional training and support to achieve a best practice franchise workplace, we are making sure there is no room for misunderstanding of the responsibilities and standards of behaviour we expect.’

Working together with the Labour Inspectorate

Super Liquor has been working with the Labour Inspectorate to ensure its enhanced compliance programmes satisfy industry best-practice, and has been keeping MBIE informed of the action taken. It has also liaised with the Indian Workers and Migrant Workers associations to get their perspective and keep them up to date.

Support to franchisees ranges from detailed guidance in Super Liquor’s Franchise Operations Manual; a clear policy that refers to the key employment obligations that a franchisee owes towards its employees and a requirement to meet those obligations, ongoing education and training; and workshops on NZ employment legislation and practice.

Enhancements have included:

  • Appointing specialist law firm Lane Neave to advise franchisees on workplace law;
  • Enhancements to operational systems regarding workplace law matters;
  • Increased training and education on New Zealand workplace law matters;
  • Information and communication to provide increased levels of assurance to franchisee employees around workplace law entitlements;
  • Increased monitoring of workplace law compliance;
  • A national workplace law review of all 152 stores in the franchise network focusing on key compliance areas in employment and immigration law;
  • A clear policy on how Super Liquor will act when it is notified of workplace law issues

‘Where we find evidence that the law has been deliberately broken, we will continue to take a hard line,’ said Mr McMahon. ‘Having said that, nothing will change if a franchisee terminated from Super Liquor today for deliberately breaching employment law can reopen tomorrow trading under a different alcohol retail banner. We fully support the enforcement agencies applying the full force of the law so that the exploitation of vulnerable workers is properly stamped out across the industry,’

‘Super Liquor has zero tolerance for breaches of fundamental employment law obligations, and we will do everything we reasonably can to ensure that we, our franchisees and their staff, and the wider community can have confidence in the workplace practices of Super Liquor franchisees.’

See also this advice on Keeping Franchises Out of Trouble

P & K Parihar are no longer franchisees of Super Liquor Hillcrest or Flagstaff.

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