Employment Court decision closes loophole exploited by migrant worker recruiters

A recent Employment Court ruling is being hailed as a milestone in legal protections for migrant workers.

Labour Inspectorate v Top Produce Ltd and and Bhatia v Khanna, the judgement for which came out on 8 October, decided that migrant workers could challenge fees paid overseas to secure jobs in New Zealand.

The case followed a now-defunct kiwifruit-growing firm in the Bay of Plenty that was accused by the Ministry of Business, Innovation & Employment (MBIE) of soliciting payments from incoming migrant workers in exchange for a position.

"The issue, as counsel for the Labour Inspector observed, is one of significant importance, impacting a particularly vulnerable sector of the workforce," the judgement read.

It found that to make such payments was and would be in breach of Section 12A of the Wages Protection Act 1983 - overturning a previous ruling from 2003.

Lisa Meto Fox, an employment lawyer based in South Auckland, said she felt deeply encouraged by the decision.

"These bad-faith actors were making a lot of money. We're talking up to $60,000 per worker per job in New Zealand," she said.

"This decision ... is really important because what it does is it closes a loophole that these bad-faith actors were exploiting."

She said that the decision had prompted discussions in the legal community about how the judgement may be carried forward.

In that sense, she said workers under the Recognised Seasonal Employer (RSE) Scheme, who are often saddled with costs of their own, could be a future focus.

"The law in this area needs to be expanded further to make it unlawful to be required to pay for recruitment expenses such as flights, visas, vaccines, insurance - that would be consistent with international human rights law.

"The employer should be paying for recruitment fees and related costs, but at the moment, RSE workers do pay for all of those things, and it is a significant portion of their income earned in New Zealand."

Modern-day bondage

The court heard that the employer's solicitations - which may be typical of numerous employers in New Zealand - were informal, conducted over the phone or via text, with little to no protection for the worker.

"The geographical location of a premium payment is not an accident; it is a calculated feature of the exploitation model, designed to evade domestic regulation and to trap vulnerable workers in debt bondage before their employment even begins.

"Payments are commonly made by bank deposit to the employer's offshore accounts, or to accounts held by the employer's relatives, in order to avoid tracing.

"The types of transactions at issue generally include little or no documentation, and receipts are frequently not provided."

It noted that the issue was a grey area at that point, given premiums for employment were explicitly illegal if the transaction was in-country - Fox called it a "loophole".

PMN reported data released under the Official Information Act showed a stark increase in complaints to the Labour Inspectorate about premiums. It reported 198 complaints in 2025/26, following 270 in 2024/25 and 391 in 2023/24.

It also noted that MBIE had not recorded complaints from RSE workers about premiums specifically, but Fox said it was rare for migrant workers - wary of being deported - to complain themselves.

"I am on the record talking about [the RSE Scheme] being akin to modern slavery," she said.

Top Produce in particular went into liquidation in March, carrying a $1.5 million tax debt.

Concerns can be reported to MBIE through the migrant exploitation reporting line on 0800 200 088 or the online reporting form, and interpreter support is available.