Outgoing ERA member shreds ‘unstuck’ restaurant owners in 19-year first

In a stunning summary of what appears to have been one of the worst hearings of his 19 years as an ERA and Employment Tribunal member, Michael Loftus has ordered a $100,000 penalty against the former owners of a Hamilton restaurant.  

And while the facts of the offending were not unusual or unique (unpaid wages and failure to keep records), the insistence of the restaurant owners to continue to lie in the face of evidence held by the Labour Inspector was clearly incredible to Loftus. 

“The parties were presenting two very different views of what occurred with little or no correlation, and inviting me to prefer their view of the facts over that of the other party,” he began the May determination with.  

The Labour Inspector brought the claims against Jayant Kaushal and Deepti Kaushal, and their company JD Foods, which owned Chilli India Restaurant, on behalf of three former employees.  

The investigation hearing took time. It was spread over 12 days, there were nine binders of evidence (which Loftus made a point of admitting could have been five if it weren’t so repetitious), and most of the evidence was heard via an interpreter with witnesses beaming in from different parts of the world.  

Most importantly, and unusually, Loftus was forced to make his decision on the credibility of those presenting each side of the case, rather than facts, because the facts alleged were so different. 

“Attached to this is the Statement of Problem lodged on the Inspector’s behalf and dated 8 June 2021 which sets out in detail the Inspector’s claims. While this may appear an unusual way of describing the background, especially given 12 days of evidence, I adopt this approach given this is the first time, in some 19 years in this role (including some as a tribunal member) I have faced a situation such as this,” he wrote.  

“The claim will be determined on the basis of credibility and that, in my experience, is new.”

And while the applicant had the Statement of Problem and the binders and audio recordings, the respondent had denial.  

“The defence, while it may be dressed in different ways, was simple. The claims were a fiction developed as a conspiracy by those the Inspector represented,” Loftus wrote. 

He ripped to shreds the restaurant owners’ tactic of trying to undermine the opposing witnesses, describing the moment they became “spectacularly unstuck”. 

“They spent nine days cross examining the Inspector’s witnesses and attempting to undermine the claims and the evidence proffered in support by picking minuscule holes therein … I have no doubt the exercise was intended to expose inconsistency but that did not occur. The high level of resulting consistency in the answer being given had the effect of confirming the veracity of their evidence.” 

The defence also accused Loftus of being biased, which led to him allowing the torturous interrogation to continue for so long.  

“[The approach] led to numerous queries from myself about the relevance of a line of questioning to which I was essentially told I was disturbing the defence and its approach. At times the exchanges got a bit antagonistic but ultimately I decided that while I could see little benefit or relevance in a line of questioning I would allow it to proceed for fear of being considered biased.” 

He described evidence given by one of the restaurant owners, Deepti Kaushal, as “undoubtedly the most destructive I have ever heard in this role”. 

“She admitted a large proportion of what she had told the Inspector was fabricated and false. She also accepted she had made up and fabricated various documents she had offered to support the respondents’ story. She also stated that some of the evidence of another of the respondents’ witnesses, Mr Kaushal’s mother, was false and the result of the mother simply saying what she, Deepti Kaushal, had told the mother to say. 

“Suffice to say matters degenerated even further with more contradictions and admissions of falsified evidence and documents. Mrs Kaushal also began to avoid answering questions.” 

Loftus described how the defence’s case was “facing some difficulties”, however after Kaushal’s evidence it “was in tatters”. 

The evidence and claims made by the Labour Inspector on behalf of the three workers were accepted by Loftus in their totality.  

Various sums totalling $100,000 were ordered to be paid from the restaurant entity, and each of the owners, to the workers and the Inspector. Interest was also added.  

Loftus has since retired following a 14-year appointment as an ERA member. He was a member of the Employment Tribunal (the predecessor to the Authority) from July 1997 to February 2002 and then held various employment relations roles with the Auckland District Health Board and the Ministry of Social Development and the Wellington Regional Employers Association (now known as EMA Central).