This is the story of how our economy has, in many ways, become a machine for turning migrants into cheap or even free labour and ‘houses’ into high rents that support house inflation that has been the highest in the world in the last 30 years.
It is the story of how Shenshen Guan was able to become a slumlord renting out cabins to the working poor (often for a fast-growing dairy industry) while effectively keeping other migrants as slaves to run the complex.
This is a place where migrants and tenants were exploited because our economy is set up to grow as a low wage and high rent economy. A place where the investment in businesses and new infrastructure is shunned because it’s simpler and easier to import cheap workers and bank the tax-free gains on leveraged property when not enough new houses are built to cope with the population growth.
… the three workers worked on various jobs at the holiday park seven days a week for no wages.
The Labour Inspectorate yesterday released the details of a case it took to the Employment Court over migrant abuse. The Court ruled Guan and her Fusion International Ltd company be banned as employers and must pay a record $680,350 in penalties and unpaid wage arrears within 28 days to three migrant workers who paid the holiday park owner a bond and worked without wages.
“This judgement sends a strong message that employers who exploit their workers will be put out of business, and charged penalties far in excess of what they may have gained,” said Labour Inspectorate National Manager Stu Lumsden.
“The Chief Judge of the Employment Court also reinforced that such conduct requires firm denunciation to drive home that worker exploitation is totally unacceptable in New Zealand,” Lumsden said.
The Court heard two of the workers mortgaged a house and withdrew their children’s university funds in China to each pay a $45,000 premium “bond” to Guan before coming to New Zealand to work at the holiday park.
They arrived on visitors’ visas and began working unlawfully under false promises of being paid. The Court heard the three workers worked on various jobs at the holiday park seven days a week for no wages. Guan had changed their employment contracts and then used the fact that they had no working visas as a reason not to pay them.
She also said their “free” food and accommodation while staying onsite should also offset any expectation of payment.
The Court heard the workers referred to their time at the holiday park as being “a nightmare”, felt it was like living in a “prison”, and one of them said they “wanted to die”.
“None of us want to believe that this sort of thing can happen in New Zealand. But it is happening and we have to deal with it if we want to maintain our reputation as a fair country to work in and to trade with.”
“Any worker is lawfully entitled to minimum employment standards. Any employer who thinks they can flout these laws, especially by being in a rural environment where they think isolating workers is sight unseen, can expect to be heavily penalised,” Lumsden said.
Fusion has been ordered to pay $300,000 in penalties, with Guan personally liable for a further $150,000. Each of the three workers would receive $100,000 of this total, on top of between $69,000 and nearly $92,000 they are to receive in unpaid wages and compensation. New Zealand Fusion and Guan have also been banned from employing staff for 18 months.
“None of us want to believe that this sort of thing can happen in New Zealand. But it is happening and we have to deal with it if we want to maintain our reputation as a fair country to work in and to trade with,” Lumsden said.
“Our tourism sector, like other export sectors, is especially vulnerable to consumer concerns about the treatment of its workers.”
… a modest three bedroom home just down the road from the holiday park is currently for sale with an asking price of $395,000. It sold for just over $28,000 in 2005
It took almost a year for the Government to start its Temporary Migrant Worker Exploitation Review, which was begun after review was agreed as part of the coalition deal with New Zealand First. Consultations on proposed changes finished on November 27 and MBIE has said it expected Minister Iain Lees Galloway to report back to cabinet in early 2020 on the review and proposals for change. Temporary work visas have continued to rise since the Government was elected.
Meanwhile, a modest three bedroom home just down the road from the Golden Springs holiday park is currently for sale with an asking price of $395,000. It sold for just over $28,000 in 2005, $211,000 in 2014 and $269,000 in 2017.
See more in this Stuff story from Anuja Nadkarni, including that Golden Springs charges up to $400 per night for a two-bedroom motel unit. One online review said the place was a “shocker”, with stained mattress covers, rat faeces and “in desperate need of repairs”. “Never again” the reviewer posted.
There are currently no rental properties available in Reporoa on TradeMe.
Get it early – This article was first published on Newsroom Pro and/or included in Bernard Hickey’s ‘8 Things’ morning email of the latest in-depth business and political analysis. Get it early by subscribing now or starting a 28-day free trial.