26 Nov 2019

Auckland pharmacies fined for underpaying staff

6:47 pm on 26 November 2019

Four Auckland pharmacies have been fined a total of $28,000 for paying some employees less than the minimum wage.

Employment contracts

Photo: 123RF

Wairoa, Taranui, Māngere and Avondale Community Pharmacies underpaid four pharmacy technicians between 2015 and 2016.

Director Nathan Bhikha pleaded guilty to an exploitation charge laid by the Ministry of Business, Innovation and Employment in 2017 and was discharged without conviction.

Bhikha and the four defendant companies were sentenced by Judge Nevin Dawson in the Auckland District Court today.

The job of a pharmacy technician was listed on Immigration New Zealand's immediate skills shortage list between 2010 and 2015.

It was through this channel that the victims, trained and qualified in India, sought to immigrate to New Zealand and become trainee pharmacy technicians.

Judge Dawson said while the defendant companies had processes to record employees' time it did not have a system in place to differentiate between hours worked and hours trained.

He said this meant the pharmacies made weekly blanket reductions from the employees' pay and this meant their hourly rate fell below the minimum wage.

In total, the exploitation left the victims more than $20,000 out of pocket over an 11-month period - all of which has since been repaid with interest.

Judge Dawson said the victims had been subjected to financial stress as a result of the exploitation and the underpayments had meant the companies had profited from it.

He also said the victims were vulnerable as they were temporary workers whose employment was tied to their pharmacy study and immigration status.

"[This] inherently created an imbalance in power in favour of the employer," his decision read.

However, the judge said the level of premeditation had been "low" as the offending had been the result of reckless behaviour and not abusive intent.

"There is no suggestion that this is a case that involved a deliberate systemic abuse of employees for deliberate commercial gain.

"The failure of the defendants amounted to a lack of a proper system to properly record the division of hours for each category of attendance of each victim while at the pharmacy where they worked."

Judge Dawson fined each of the pharmacies $7000 for the exploitation charges.

He also considered an application for discharge without conviction made by their director Bhikha without conviction.

Bhikha's lawyer Simon Mount QC had submitted his client's personal involvement in the offending was limited and his culpability at the end of the scale.

Judge Dawson said the man had indicated he accepted full responsibility and appeared to express genuine regret and remorse.

"There is little to no possibility of the defendant reoffending as the defendant has withdrawn himself from the recruitment and HR aspects of the business and the PAC report has identified the risk of reoffending is low."

Mr Mount QC submitted that if convicted, his client's business travel to the United States would be restricted or cut off entirely with serious adverse impacts on his business.

The lawyer also said the conviction would bring a disproportionate sense of shame and embarrassment to the man in the Hindu and Indian community.

In considering the application, Judge Dawson had to be satisfied the consequences of the conviction were out of all proportion to the gravity of the offending.

The judge said the case was "finely balanced" and though the offending was serious the particular circumstances meant a discharge without conviction was warranted.

Immigration New Zealand said the actions of the pharmacies were exploitative and a clear breach of the law.

It said the penalties sent a clear message to employers of their need to observe employment and immigration laws.