A liquor store owner whose behaviour was branded “heinous” by a judge will pay up an unprecedented $200,000 fine for underpaying migrant workers – but is unrepentant.
Six Indian migrants were underpaid a total of $250,000 by Paramjeet Singh Parihar and Kuldip Kaur Parihar while working at the couple’s Super Liquor bottle stores in the Hamilton suburbs of Flagstaff and Hillcrest between 2005 and 2017/2018.
In a judgement released on Tuesday, employment court judge Mark Perkins called the Parihars’ offending “inexplicable and heinous”, particularly as it was against their fellow countrymen. The judge said the law breaches were clearly intentional.
The money was eventually repaid to the staff members after an investigation by Labour inspector Ya Rachael Tsui, but the judge said only after Tsui’s evidence was “so overwhelming that further denial was not tenable”. Perkins praised Tsui for an “astute” piece of forensic research for unveiling the exploitation.
Some staff were paid as little as $8 an hour, some were paid in cash, others were forced to pay ‘refunds’ to their employer, holiday pay was withheld and no proper timesheets or records kept, the investigation found.
Approached at his home by Stuff, Paramjeet Parihar denied exploiting workers, but said he accepted the decision, would not appeal it and would sell property to pay the fine. He said he had retired and wouldn’t return to the liquor store industry. He had sold the Flagstaff story in 2017 and the Hillcrest store in 2018. “I am a citizen of New Zealand, I will definitely pay my fine and obey the order of the judge.”
Asked about his victims’ exploitation, he said: “This is their story.” Asked for his story, he said: “We already explain everything to the honourable judge and tell them everything. I have to honour my judge: I am a citizen of New Zealand, I have to obey, that is my duty.”
Approached earlier this year, Kuldip Kaur Parihar also denied exploiting workers and said the couple had only paid them to “keep the peace”.
Six workers eventually complained to the Labour Inspectorate, but one of them – given the codename V by the inspectors – said that many more were exploited. He said he felt Paramjeet Parihar should have been fined more.
“I think it should be more, because he’s been in the business 14 years – I worked there for seven years and during my tenure, he exploited 15 or 20 employees,” said V, who said Paramjeet was clever and coercive in his exploitation. “Most of them worked on a cash basis, they don’t have any records … so he has a long history of exploitation.
“He would say openly to us, don’t say anything against us, whatever you do. He treated us like a third-class [citizen]. He said if you want to complain against me, you need money, and you don’t have money.
“When I complained against him, he continually threatened me, writing to me from his lawyer saying I stole money and I won’t get residency.
“I didn’t have enough money to eat. The Labour inspector was awesome, very helpful, very motivated.”
The court ruled that B was owed $59,257, T was owed $83,829, K was owed $9648, M was owed $7279, V was owed $6110, and G was owed $3811: a total of unpaid wages of $169,936. The Parihars also failed to pay holiday pay of $80,533. The judge heard the employees had suffered hardship, emotional stress, and fear about their immigration status.
The judge dismissed an argument from the defendants’ lawyer, Mark Hammond, that the employees had stayed with the couple for long periods without complaining, saying that the employees were “fettered” to them by immigration law with essential skills visas that only permitted them to work for the couple.
The chief executive of Super Liquor, Campbell McMahon, welcomed the ruling. “We’re pleased the court has come out hard and made an example in this case,” he said. “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.”
McMahon said the Parihars had breached their trust and let down their employees, fellow franchisees and the brand.” He said Super Liquor had made a raft of changes to ensure there could be no repeat offending by other franchisees.
The court heard the couple no longer planned to be employers. They had sold the Flagstaff store in October 2017, and then sold Hillcrest to their son, Sunny Parihar, in December 2018.
Sunny Parihar had his Super Liquor franchise stripped after McMahon said the company was “grossly misled” during the franchising process. Both stores now operate under the Bottle-O brand.
The Labour Inspectorate originally sought orders banning the pair from the industry and to pay compensation, but withdrew those after the Parihars paid up what they owed.
Arriving at his penalty, the judge made it clear the couple could afford to pay. Their most recent tax return showed they had each earned $109,749 that year.
The judgement said the couple had sold real estate to make the payments. But the judge said they had also earned $1.6m from the Hillcrest store sale, and were in a strong enough position to have sold it to their son on “commercially unrealistic and extremely generous” terms. They also owned real estate, “assets partially funded but to a substantial degree by the unpaid efforts of their employees”.
Property records show the couple owned six properties together and Paramjeet owned a seventh with his son Jasjeet.
The total maximum penalties available were $2 million but the judge said Paramjeet Parihar should pay $180,000, with $158,500 as pecuniary penalties, as a “proper reflection of his overall culpability having regard to his persistent and cynical way he treated this group of employees and the way that he endeavoured to conceal the true position”.
His wife was penalised $20,000 for her part. Employees B and T were to receive $20,000 apiece from that money, and K, M, V and G receive $10,000 each. The crown would keep the rest.
Labour Inspectorate manager Callum McMillan said the case was a “clear message” to exploitative employers.
“Beyond that, it sends a message to all franchisors that they risk having their brand name marred unless they take steps to routinely monitor compliance with employment laws within their franchise group to prevent worker exploitation.”
MBIE has been in discussion for months with major liquor franchises about reforming the industry. Callum McMillan acknowledged Super Liquor had taken steps to make changes to stop repeat offending and said he expected to see the results of that in future audits.
Retail New Zealand chief executive Greg Harford said it was “really disappointing that any New Zealand employer would seek to exploit its staff”.