The New Zealand employment court has ordered two former Super Liquor franchisees $200,000 in penalties for breaching employment law.
The franchisees underpaid workers over a seven-year period, paying between $8 and $11 an hour, while some staff worked more than 70 hours a week.
All employees in question were migrant workers, and did not accrue sick leave, holiday pay or public holiday entitlements.
“This is a message to all franchisors that they risk having their brand name marred unless they take steps to routinely monitor compliance with employment laws,” Labour Inspectorate regional manager Callum McMillan said.
“There is a growing demand in New Zealand and worldwide, for corporations to be ethical and accountable in their practices, which extends beyond direct legal obligations.
“This means their profits cannot be at the expense of frontline staff in their franchises or in their supply chains.”
Campbell McMahon, chief executive of Super Liquor, said he was pleased with the ruling.
“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,” McMahon said.
“Super Liquor simply will not tolerate any abuse of fundamental obligations under employment law or exploitation of employees by its franchisees.”
RetailNZ said that while most retailers and franchisees do their best to comply with employment law, all businesses should take steps to ensure their staff are being treated lawfully.
“New Zealand employment laws apply no matter the nationality of your employees, and there’s no excuse for business owners who try to give themselves an advantage by exploiting your employees,” RetailNZ chief executive Greg Harford said.
“Most retail employers put a significant amount of time and expense into looking after their people.
“Retail is about providing great service to customers – and to do that, retailers need employees who are engaged and enthusiastic in their work.”