Hive News Thursday: Govt cracks down on migrant abusers; ComCom rejects Voda-Sky; Ruataniwha backer resigns

After months of reports about widespread abuse of migrants, the Government moved this morning to crack down on employers who break the rules.

Michael Woodhouse announced what he described as a "clampdown on rogue employers," including bans from six months to two years on employers being able to recruit from overseas if they breach labour and migration laws.

"It is simply unacceptable that those employers who exploit migrant workers are still able to recruit from the international labour market and disadvantage those employers who do the right thing," Woodhouse said.

The announcement follows months of reports in the media and from experts detailing widespread abuse of migrants, particularly international students. See more here in this December 15 email from Hive News,

MBIE has also prosecuted a growing number of employers for underpaying, overworking and abusing workers here on temporary or student work visas.

Auckland University's Christina Stringer published a 78 page report in mid-December titled 'Worker Exploitation in New Zealand: A Troubling Landscape' that was based on 105 interviews with temporary migrant workers.

She documented excessive working hours without breaks, non-payment or underpayment of wages with temporary migrants not being paid for hours worked or earning as little as $4 to $5 an hour, temporary migrants being controlled by threats of being reported to Immigration New Zealand if they complain, deduction of income taxes from wages, but the taxes not being paid to the Inland Revenue, non-payment of holiday pay and no formal employment contracts.

Woodhouse said the changes would come into effect from April 1.

The new measures would apply to all employers wanting to recruit labour market-tested migrant workers, including employers who are: supporting work visa applications and approvals in principle; seeking accredited employer status or supporting residence class visa applications based on employment; and employers who are part of the Recognised Seasonal Employer scheme.

He said employment standards-related penalties would extend from formal infringement notices issued by the Labour Inspectorate through to penalties issued by the Employment Relations Authority or the Employment Court. Employers issued with penalties as a result of private actions taken by employees either through the Employment Relations Authority or the Employment Court will also be included, he said.

However, there is still wiggle room for employers who breach the rules.

Woodhouse said the threshold for non-compliance would not include employers at the very minor end of breaches, such as those who have entered into an enforceable undertaking with the Labour Inspectorate. "These are employers with mostly adequate wage and time records who demonstrate a desire to comply by agreeing with a Labour Inspector to a written undertaking for how and when they will rectify their breaches," he said.

Some non-compliant employers who were stood down from being able to recruit from overseas would also be able to keep employing people already here on work visas.

"These employees will be able to work out the duration of their work visa, but will not be granted further work visas to work for the non-compliant employer," Woodhouse said.

Crackdown welcomed, but more demanded

Equal Employment Opportunities Commissioner Jackie Blue welcomed the measures said she hoped it was only the start of actions to address migrant labour exploitation.

“Penalising those employers who show disregard for our employment and immigration laws is a positive first step towards addressing migrant labour exploitation in New Zealand," Blue said.

“We are keen to see that these new measures are just the start of actions aimed at addressing what is a significant problem – particularly in our dairy, horticultural, hospitality and international education industries."

Open Work Visas and a cash payments ban?

Auckland migration and employment lawyer Alastair McClymont, who has advocated for students being deported over fraudulent visa applications from agents in India, welcomed the moves to specify the penalties for non-compliance, but said they don't go far enough.

"The previous rules about 'non-compliance' were so vague that it was left in the hands of a visa officer to decide for themselves what non-compliance was," he said.

He said Immigration New Zealand investigations into employer compliance could often drag on for more than six months.

"Meanwhile the staff applying for work visas are unable to work and the business is basically run into the ground because of the long drawn out delays in Immigration NZ investigations into compliance. So setting a definite standard will be very welcome," he said.

But he wondered whether Immigration NZ and MBIE had the staff to ramp up the compliance efforts.

"It also requires migrant workers to come forward with complaints, and where are the incentives for that? Currently there are only massive disincentives," McClymont said.

He called for the introduction of one year Open Work Visas for those facing unemployment during an investigation, which would allow migrant workers to work for multiple employers and not be so dependent on that employer for a renewal or support for a permanent residency application.

"Were complainants able to be granted one year Open Work Visas while the claims are investigated then there would be thousands of complainants, but then MBIE wouldn’t have the resources to deal with them," he said.

He also raised the issue of cash payments to migrant workers.

"I also don’t see any reason why Immigration Instructions can’t prohibit employers from paying cash to employees. Frequently they will claim that cash wage payments are made and it’s then impossible to prove one way or another."

Vodafone merger with Sky TV rejected

The Commerce Commission's muscle flexing reached a new level this morning.

Having surprised many with its interim rejection of the NZME merger with Fairfax NZ last year (the final decision is scheduled for March 15), the Commerce Commission this morning declined Vodafone's merger with Sky TV.

The Commission said its decision was based on the impact of the merger on competition in the broadband and mobile markets.

"The proposed merger would have created a strong vertically integrated pay-TV and full service telecommunications provider in New Zealand owning all premium sports content. We acknowledge that this could result in more attractive offers for Sky combined with broadband and/or mobile being available to consumers in the immediate future," Chair Mark Berry said.

"However, we have to take into account the impact of a merger over time, and uncertainty as to how this dynamic market will evolve is relevant to our assessment," he said.

All Blacks, exclusion and the UFB rollout

This is all about the Sky's exclusive deal with the All Blacks, given the ability of a merged Voda-Sky to offer exclusive rugby packages to broadband and mobile customers (although Voda-Sky denied in their application that they would do that).

"Given the merged entity’s ability to leverage its premium live sports content, we cannot rule out the real chance that demand for its offers would attract a large number of non-Vodafone customers," Berry said.

"To clear the merger we would need to have been satisfied that it was unlikely to substantially lessen competition in any relevant market. The evidence before us suggests that the potential popularity of the merged entity’s offers could result in competitors losing or failing to achieve scale to the point that they would reduce investment or innovation in broadband and mobile markets in the future," he said.

"In particular, we have concerns that this could impact the competitiveness of key third players in these markets such as 2degrees and Vocus."

Berry also pointed to the ongoing rollout of Ultra Fast Broadband, "making it an opportune time for the merged entity to entice consumers to a new offer."

"If significant switching occurred, the merged entity could, in time, have the ability to price less advantageously than without the merger or to reduce the quality of its service. Given we are not satisfied that we can say that competition is unlikely to be substantially lessened by the proposed merger, we must decline clearance," he said.

In other economic and financial news...

In another blow for the NZ$900 million Ruataniwha water storage scheme, the CEO of the Hawkes Bay Regional Council, Andrew Newman, resigned with effect from March 31. Newman was the key figure at the Council behind the project, which now faces a majority of Councillors who are openly sceptical of the project.

Statistics New Zealand published fresh sub-national population forecasts yesterday, including its medium forecast Auckland's population was projected to rise from 1.5 million in 2014 to 2.1 million by 2033. Natural population growth was forecast to provide 55% of the increase in Auckland because the high number of migrants are mostly in the child bearing ages.

Statistics NZ's 'high' projection for Auckland, which has been exceeded in recent years, is for Auckland's population to reach 2.6 million people by 2043, which would imply an average annual growth rate of 1.9%, which would itself be significantly slower than what has been seen in the last three years.

Fonterra left its forecast milk payout unchanged at NZ$6/kg, which was less than the NZ$6.25/kg some economists had expected to be announced.

Tweets of the day:

Brooke Fraser:

@TaikaWaititi next time I see you at Paramount - please advise the protocol about how to approach now that you're NZer OF THE YEAR

Taika Waititi in reply:

Slowly, and with your hands where I can see them.

Have a great day