On 19th Feb 2021, Employment Relations Authority made a decision against Restaurant Brands Limited and ordered them to pay $18,000 NZD to one of their ex-employees who was on a work visa.
This news was published in the stuff news on 4th March 2021.
Here are the key points from the decision document, the entire decision can be viewed here: click here to read the decision document.
Why the recent ERA decision is wrong and what could be its impact on NZ employers and their migrant workers
It is important to note the following extract from the summary of the decision:
- (a)Employer ignored the fact that Mr. Gill was employed on a permanent employment agreement and it should not have advertised his position
- (b)or indeed replaced him until there had been a full discussion of Mr. Gill and
- (c)until it was certain Mr. Gill had failed to achieve his employer-assisted work visa and with that, his right to be employed by RBL in New Zealand.
In order to understand why this decision is wrong, it is important to first understand how New Zealand’s immigration system works.
Essential skills work visa policy: Immigration New Zealand has published a detailed operational manual which is followed by Immigration New Zealand visa officers to make decisions on visa applications. Here is what instruction WK3.15.1.a.v says:
Employers requesting approval in principle to employ a non-New Zealand citizen or residence class visa holder worker or supporting an individual work visa application must provide:
- evidence of genuine attempts to recruit suitable New Zealand citizens or residence class visa holders (see WK3.10.5) including the reasons why:
- any particular job specifications were considered necessary for the performance of the work; and
- any New Zealand citizens or resident class visa holder workers who applied were either not suitable, or refused to perform the work; and
This is where the decision-maker failed to understand that the actions of Restaurant Brand Limited in the context of the New Zealand Immigration system.
As per Immigration New Zealand, if Restaurant Brand Limited wanted to retain Mr. Gill, they had to meet WK3.15.1.a.v and submit evidence of genuine attempts to recruit suitable New Zealand citizens or residence class visa holders.
The very definition of the term genuine would mean that the intention of the employer should be to hire that suitable New Zealand citizen or residence class visa holder, if they happen to find one. This is exactly what Restaurant Brands Limited did. In the context of the excerpt from the decision statement:
- This proves that Restaurant Brands Limited did exactly what Immigration New Zealand requires every employer who has a current migrant worker needing to apply for a further work visa. Restaurant Brands Limited could not have provided the required documents (favourable documents) to Mr. Gill for his visa application unless they would have met the requirements for the employers as per WK3.15.1.a.v of Operational Manual.
- Perhaps, the Restaurant Brands Limited should have communicated with Mr. Gill that despite their intention to support him for his next visa application, they cannot guarantee that their recruitment efforts would prove that there are no suitable New Zealanders available for the role. And a discussion could have been had around, what the company is likely going to do in such an event and what the consequences would be for Mr. Gill’s employment.
- If Restaurant Brand would have waited for the point that Mr. Gill no longer had a valid visa, before undertaking a recruitment effort, they could not have provided the required documents to Mr. Gill under any circumstances. As explained above, the action of advertising for the role was the only scope for Mr. Gill to be able to submit a work visa application under the Essential skills work visa policy. Effectively, what the decision-maker is saying that Restaurant Brands Limited should not have taken any action at all, should not have advertised the position until Mr. Gill’s work visa would have expired, and he would have lost his job owing to not having a valid work visa. This suggestion is very unreasonable and neither any migrant nor any employer would ever gain anything from such action (or rather display of inaction).
Failure to understand New Zealand Immigration System and policies: It is a shame that the decision-maker referred to “an immigration specialist” and yet the decision document indicates that the engagement process with this “Immigration Specialist” did not yield into sufficient information, the required education and knowledge for the decision-maker to understand how New Zealand Immigration system works.
Surprisingly, this immigration expert referred to “WD1 post study work visa – employer assisted” and stated that under that policy the employer was required to undertake a labour market test. This is incorrect, in the scope of “WD1 post study work visa – employer assisted” policy, there has never been a requirement for an employer to conduct a labour market test. What is interesting is that the entire discussion is about a work visa under Essential Skills work visa policy and yet the contribution from the “Immigration expert” refers to an unrelated work visa policy. It is unclear and has not been clarified in the decision document if the candidate was actually eligible for another visa category and could have applied for a work visa, without the employer having to undertake a labour market test.
Impact of this decision on Migrant Workers:
While migrants are already worried about the upcoming changes to Immigration policies for work visas, this ERA decision raises several questions for migrants:
- If the migrant workers were to apply for Skilled Migrant Residence category residence visa, as per instruction SM6.10.5.e.ii. and SM6.10.15.d.ii. they have a requirement to prove to Immigration New Zealand that their employment is “ongoing”.
- If the employers start giving them fixed term contracts, owing to the fact that they are on a temporary work visa, will they ever find an employment with a full time permanent ongoing employment agreement?
- What would it mean for migrants looking to settle in New Zealand?
Impact of this decision on NZ Employers:
This decision raises several questions for employers:
- Should employers only hire migrants for a fixed term contract?
- Can an employer justify hiring a migrant on a fixed term contract owing to the visa durations as stated in the relevant work visa instructions? Should the fact that a migrant worker is on a temporary visa, be considered as a genuine reason based on reasonable grounds to justify the fixed term? https://www.employment.govt.nz/starting-employment/who-is-an-employee/types-of-employee/
- Can an employer advertise the role to assist their existing migrant employee by advertising the role which is not yet vacant?
- If they do, then according to this decision, no employer can ever advertise the role while they have their migrant worker is still employed with them. Effectively, Employers will no longer be able to retain their migrant workers. As without a visa, the migrant worker would be forced to leave the country or apply for a visa to work for a different employer or apply for a different type of visa which would meet their needs and objectives to remain in New Zealand
- If this is how ERA is going to interpret the action of an employer and penalize employers, then effectively, no employer would be ever able to rely on hiring migrant workers, as they might believe that:
- They cannot advertise for the role that is not yet vacant, despite the fact that the migrant’s visa is going to expire soon, and they would need to hire a replacement anyways once the visa of the existing migrant worker’s visa expires.
- It wouldn’t matter if they want to retain the migrant worker, in case, they are unable to find a suitable NZer for the role. By that time, the migrant worker may have chosen to work elsewhere, or their visa would have already expired, and the migrant worker may have been forced to leave the country.
My advice for NZ employers:
Considering the sequence of events in this case, there are many learnings for other New Zealand employers looking to hire and retain migrant workers. This is especially relevant to the employers in the sectors with proven shortages of reliable local NZer workers.
1. Employment agreements with Migrant workers:
It is important to understand the difference between hiring a migrant worker and hiring a New Zealanders. When making employment agreements for a migrant worker, the employers must consult a Licensed Immigration Adviser or a New Zealand lawyer (preferably someone who has either studied New Zealand Immigration law papers or has considerable work experience dealing with New Zealand Immigration matters, or has completed a Graduate Diploma in New Zealand Immigration Advice). Similarly, migrants should also seek Immigration Advice at the time of accepting a potential job offer.
There are few ways, an employer can ensure that they offer an appropriate employment agreement to their migrant worker which protects them against a potentially erroneous decision by ERA:
- Putting the visa duration in the employment agreement.
- If signing a fixed-term employment agreement, then also issuing an offer of ongoing employment conditional to the migrant worker obtaining a residence visa of New Zealand. This offer would allow the migrant worker to submit their Skilled Migrant Residence application.
2. Recruitment process:
Employers should ensure that their HR team members consult a Licensed Immigration Adviser and communicate effectively with their migrant worker to ensure that there is no misunderstanding and that the migrant worker understands the intent and the obligations of the employer.
What could Restaurant Brands have done differently:
It would have been prudent for Restaurant Brands Limited to consult a Licensed Immigration Adviser to seek Immigration Advice when hiring, firing, and making other HR decisions.
Although Restaurant Brands could have improved their communication with their migrant employee, the steps they undertook to conduct a genuine labour market test are exactly what Immigration New Zealand requires all employers wishing to hire or retain migrant workers. In fact, Immigration New Zealand has issued a specific guide for Employers guiding them around the process to be followed: click here to view the Employer Guide for Essential skills work visa.
(Please note that this guide has not been updated by INZ and may contain some outdated information as it doesn’t refer to labor oversupply and undersupply lists, yet it contains a generic process to be followed which is still applicable.)
In this example, If it was the case that Mr. Gill was eligible for any other visa policy, under which the employer did not have a mandatory requirement to undertake a labor market test, then Restaurant Brands Limited could have avoided this exercise to replace Mr. Gill and everyone would have been happy. Alternatively, if it was the case that there was no other visa policy and the only visa policy under which Mr. Gill could have applied for a work visa, then they could have clarified their position to Mr. Gill while notifying him that:
- in order to assist you in your visa application, Immigration New Zealand requires us to undertake a genuine labor market search;
- as such, our action to undertake a genuine labor market search could mean that we end up finding a suitable NZer;
- As a result, we would not be able to conclude in our paperwork that there are no suitable NZers available for the role and thus, if you were to apply for a work visa with those documents, as per our immigration adviser, your visa application is likely going to be declined. Thus, acting in good faith, as your employer we are making this information available to you. Please note that action of our willingness to assist you in your visa application could actually mean that we are no longer able to provide you the appropriate documents you need to renew your work visa;
- If you decide to submit your work visa despite us mentioning in the Employer Supplementary Form (the form required from the employers to support a work visa application) that there are suitable New Zealanders available for the role, we would have no objection to you submitting your work visa application; If this were to happen, you would still continue to be employed with us until you have a valid work visa;
- Alternatively, if we are able to prove that there are no suitable New Zealanders available for the role, we would be happy to provide you with this information along with the Employer Supplementary form for you to apply for your work visa application.
Recommendations for Restaurant Brands Limited:
I recommend that Restaurant Brands Limited should challenge this decision in the employment court.
Restaurant Brands Limited has 28 days (until 19th March 2021) to apply to the employment court.
I believe that Mr. Gill deserved better communication. However, the reasons used in the decision are potentially detrimental for both, New Zealand employers and migrant workers. Restaurant Brands Limited owes this to other employers and to all the migrants who could suffer due to a negative fear-based trend in hiring migrants. They need to ensure that a fair decision is made in terms of what the obligations are for an employer from an Immigration perspective and how an employer is bound to follow the Immigration Instructions.
CEO, Carmento Immigration
Licensed Immigration Adviser, IAA: 201400142