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last updated 26/04/2018

BP operator penalised for breaching employment law

last updated 26/04/2018

12 April 2018 - A BP service station operator in Hastings, Pegasus Energy Limited, has been ordered to pay upwards of $132,000 in arrears to two ex-staff and $120,000 in penalties following a Labour Inspectorate investigation.

The operator has been incorrectly reported elsewhere (and by the Labour Inspectorate) as a franchisee. It is worth noting that BP operates under a dealership arrangement rather than a full format franchise, where different levels of oversight and reporting might be applied. However, the overall lesson – that the actions of one operator can damage the whole brand – should serve to remind franchisors and franchisees of the need for vigilance in this area. The Franchise Association has already held several sessions on this topic and distributed Labour Inspectorate information to its members, and employment will be a particular focus of its Navigating the Future national franchise conference in August.

Labour Inspectorate regional manager Loua Ward says of the Pegasus Energy case, ‘These employees were not paid the minimum wage, or holiday pay by sole director Jag Rawat. They were subjected to unlawful premiums being deducted from their pay and were at times working up to 16 hour shifts, with lesser hours falsely recorded in the business’s records.’

The seriousness of the breaches resulted in Mr Rawat being personally liable for a further $24,000 in penalties.

‘The pair was made to live in accommodation provided by the employer and pay excessive amounts in rent, despite poor living conditions where they were required to sleep on the floor,’ says Ms Ward. ‘The employees continuously received threats from Mr Rawat saying that he would cancel their visas and they’d be forced to leave New Zealand if they spoke up about the mistreatment. Mr Rawat also threatened trouble in the employees’ home countries on return.’

In evidence given to the Labour Inspector, the employees said they were subjected to working conditions that verged on slavery.

‘Migrant workers are vulnerable in New Zealand and may not always be aware of their rights, or may be taken advantage of, which we’ve seen in this case. Mr Rawat saw himself in a position of power, and used this to his employees’ detriment,’ says Ms Ward.

Mr Rawat previously pleaded guilty to eight charges in the Napier District Court relating to falsifying immigration documents and misleading Immigration New Zealand. 

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