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last updated 04/08/2020

Franchisee ‘perhaps NZ’s worst employer?’

last updated 04/08/2020

August 2020 - A recent news story about a Bottle-O franchisee has again demonstrated the risk to franchise brands of franchisees breaching their employment responsibilities to migrant workers

A recent headline on the Stuff website asked ‘Is this NZ’s worst employer?’ The article was about liquor store owner Ravinder Kumar Arora, who is a multiple franchisee of the Australian-owned Bottle-O chain. According to the article, one of his former employees says working for him was ‘like modern-day slavery.’

Arora’s businesses have reportedly failed 19 Labour Inspectorate investigations in the past six years. He settled confidentially with one employee who claimed he was owed $80,000. Labour inspectors forced him to pay out $30,000 to several more.

Now three long serving former employees have told Stuff they were paid as little as $7 an hour while working for him, then sacked when they complained. Between them, they claim they are owed more than $630,000 in unpaid wages and annual leave. Workers’ advocate Sunny Sehgal, of the Migrant Workers Network, says, ‘He is one of the worst employers we have ever faced.’ Arora denies those claims. 

Stuff says that ‘Despite all of this, Arora continues to enjoy the support of the Bottle-O liquor chain. And this month, the Christchurch City Council gave a liquor licence to a company owned by his wife Anuradha to buy another Bottle-O store in the city.’ It invites anyone who knows more about Ravi Arora or the Bottle-O chain to email the journalist who wrote the article.

Bottle-O, which has 94 franchises nationwide, said in a written statement that the company was awaiting the outcome of the latest investigations into Arora, who had told them the allegations against him were wrong. They said the company would do ‘a full audit’ of its retailers and ‘work with them to ensure continued compliance with the appropriate labour laws and awards’.

Good franchisees and brands suffer

As always when a franchise hits the news for the wrong reasons, the publicity will damage the businesses of other franchisees in the same chain who are abiding by New Zealand employment law.

Many franchisors are taking steps to ensure that their franchisees are obeying the law or have their franchises terminated. When SuperLiquor franchisees Paramjeet Singh Parihar and Kuldip Kaur Parihar were found guilty of employment law breaches last year, the franchisor welcomed the record fines handed down saying Super Liquor simply will not tolerate any abuse of fundamental obligations under employment law or exploitation of employees by its franchisees. It also detailed the considerable steps being taken to work with the Labour Inspectorate to ensure its enhanced compliance programmes satisfy industry best-practice.

The Labour Inspectorate announced several years ago that it would be targeting franchises where there were suspicions of employment abuses. While many of the resulting cases related to the widespread confusion over holiday pay and were without malice, there have been several cases here (and more in Australia) where immigrant workers have been preyed upon by members of their own communities. Some New Zealand franchises are now engaging with the Indian Workers and Migrant Workers Associations to help identify such issues. The Franchise Association (FANZ) has also worked with the MBIE to help franchisors educate their franchisees. Bottle-O is not a member of FANZ.

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