ERA foreign worker case to test NZ employment law

A case is to be heard today that will clear up confusion around contracting workers from overseas companies.

ERA foreign worker case to test NZ employment law
The Employment Relations Authority (ERA) will hear a case today that will test New Zealand law.

The case – which was lodged by the Rail and Maritime Transport Union (RMTU) – alleges that Chinese engineers who removed asbestos from KiwiRail locomotives were exploited, a claim that emerged following an investigation by the Ministry of Business, Innovation and Employment (MBIE).

According to the MBIE, 27 Chinese workers were paid as little as $3 an hour, but the organisation’s investigation failed to verify the allegation because their employers in China refused to disclose details of pay.

Another obstacle was doubt surrounding the applicability of New Zealand law to the workers, who were sent to New Zealand by Chinese companies to complete the work. 
HRM previously spoke to Catherine Stewart, convenor of the ADLSI Employment Law Committee, about the case.

“Without knowing the facts and what the contracts or work visas say it is difficult to give an in-depth analysis,” she said. “However, generally speaking the issue of which jurisdiction applies to employment agreements is a complex one.”

Stewart explained that there is effectively a two-step process:

1. Assessing the proper law of the contract, such as what the contract says about jurisdiction
2. Assessing the ‘convenient forum’ or the place which has most connection with the employment agreement.

“If there is a clause in the contracts that states they are governed by Chinese law, this is not necessarily the end of the matter,” she continued. “The convenient forum would take several aspects of the employment relationship into account, including where the work is carried out and where the employees are residents. Courts are increasingly recognising that employment disputes should be resolved in the jurisdiction in which the work is carried out.”

“The Employment Relations Act makes it clear that you can’t contract out of New Zealand employment law,” Stewart told HRM. “The issue is around whether the contracts are subject to the New Zealand jurisdiction or not.

“If the contracts are governed by Chinese law, the Chinese employers might not need to succumb to the request to provide records on the grounds that they are not subject to New Zealand laws.”

Wayne Butson, general secretary of the RMTU, said that the law should be clear on this topic.

“If our law doesn't apply to foreign workers carrying out work on New Zealand soil, what's stopping other companies from replacing their local workers with cheap labour from overseas?” he told 3 News.

Workplace Relations and Safety Minister Michael Woodhouse previously said that the status of the workers was for the Courts to decide. 

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