Dismissing illegal employees and bans on employers hiring migrants

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For the year ending December 2016, 127,300 migrants moved to New Zealand creating an all-time high net migration total of around 70,000 people.

This is great news for regions like the Waikato that have often struggled to attract their share of imported talent to fill skill shortages in the past. The high cost of living in Auckland, will unquestionably see a higher number of skilled migrants choosing to make the Waikato their home.

Many employers have learned to master the ins and outs of the immigration process, while others are still learning to come to grips with the requirements. However, one issue that arises from time to time is what rights and obligations an employer has in relation to ensuring their employee is legally entitled to work in New Zealand, and what to do if they discover they are not.

Employer obligations to take reasonable steps
Under section 350 of the Immigration Act 2009, it is an offence for any employer to allow or continue to allow any person to work in that employer’s service, knowing that the person is not entitled under the Act to do that work. Employers in breach of this section may face a penalty of up to $50,000.

It is a defence under the Act if an employer did not know the employee was not entitled to work and took reasonable precautions and exercised due diligence to ascertain whether the person was entitled to do the work. This would require employers to at least ask potential employees for evidence of their right to work in New Zealand. Smart employers will also go to VisaView, a free website run by Immigration New Zealand, which allows employers to check the visa status of job applicants and current employees. VisaView keeps a record of an employer’s enquiries which can also be used in evidence to show that an employer took all reasonable precautions to ascertain the employee was legally allowed to be employed.

Employer obligations when employee’s visa has expired
A problem can arise, however, when an employer discovers that a current employee’s visa has actually expired and although they were legally allowed to work at the time the employment relationship started, once their visa has expired that is no longer the case. Employers can find themselves in the uncomfortable situation of trying to balance the obligations contained in an employment agreement and under the Employment Relations Act 2000 with their obligations to not employ those without the legal right to work pursuant to the Immigration Act.

Fortunately, some common sense drafting in section 350(7) of the Immigration Act allows an employer to legally continue to employ an employee who is not entitled to work, for the duration of the employee’s notice period contained in the employment agreement. Essentially, this means that on discovering an employee is no longer “legal” an employer still has time to commence a fair process as required by the Employment Relations Act 2000, in the same manner they would when contemplating dismissing an employee for any other reason. Once the process has been completed, an employer can then give an employee notice that their employment is terminating, and the employer is not in breach of the Immigration Act by allowing the employee to work out their notice period.

Employer breaches lead to ban from 1 April 2017
From 1 April 2017, employers that have incurred a penalty for breach of minimum employment standards, predominantly for paying below minimum wage and/or demanding employees work excessive hours, will now face a set stand-down period preventing them from recruiting migrant labour for six months, one year, 18 months or two years, depending on the severity of the breach.

This move will give added protection to migrants vulnerable to exploitation and provide further disincentives to unscrupulous employers.

Employers should also take note that seeking payment from a prospective employee to essentially “buy” their job in order to obtain a work visa is known as a “premium” which breaches the Wages Protection Act 1983 and can also lead to heavy penalties.

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About Author

Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375

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