Pizza Huts profiled for migrant exploitation

A number of Pizza Hut stores were profiled by the Government after intelligence information indicated breaches of immigration and employment laws at the premises. Teuila Fuatai reports.

A number of Pizza Hut stores have been the subject of an immigration investigation with a Government report identifying potentially one in four stores as “high risk for migrant exploitation”.

A Ministry of Business, Innovation and Employment (MBIE) report, seen by Newsroom, focuses on 10 companies operating 23 franchised Pizza Hut stores throughout the country. Published in February last year, the report follows previous intelligence analysis which “determined a number of Pizza Hut stores franchised by Restaurant Brands Limited may be at high risk of labour and immigration related offending”.

Separately, the case of a Hawke’s Bay Pizza Hut franchise owner who employed a man supposed to be working as an IT technician is currently in its final court stages. The owner was charged with aiding a person to breach visa conditions after an immigration officer and labour inspector visited his Hastings store in May last year. The man, originally from India, is due to be sentenced in the next week. His company is not among the 10 examined in the MBIE report, which rated the likelihood of immigration offending and worker exploitation using five different risk factors. All 10 of those companies, which share distinct structural similarities, are deemed at “highest risk of harm” for immigration and labour law breaches.

A breakdown of information from the inquiry shows that between the companies 182 work visas were sponsored, all for Indian nationals. All those employees had also held student visas, and then moved through the graduate visa pathway to gain their work visas. The directors and shareholders from the companies are also all Indian nationals.

The report said: "Franchised Pizza Hut stores are [a] risk for exploitation, and of particular concern is the high number of migrant employees holding temporary visas with open work rights. With additional data about all employees and audits into these companies, [MBIE] will be better able to assess this risk of harm."

The use of employer-sponsored work and residence visas, which tied workers to one of the 10 companies, is also examined. They also “represent risks for migrant employee exploitation as applicants are increasingly reliant on their employers” to stay in the country. However, the report notes, the number of non-resident employees with sponsored work visas connected to the companies is relatively low compared to the number of employees holding open-work condition visas.

The report also briefly addresses Immigration NZ’s visa processing and monitoring systems. “Immigration NZ does not collect employment information on people holding visas with ‘open work’ conditions,” it says. “These visas may include student visas with work conditions and open work visas including the graduate job search and partnership visa categories.” The lack of monitoring of means “there is an increased risk of harm” for those employees, the report says.

“It is highly likely each company analysed in this report will be employing migrants on temporary class visas who have not been identified in each of the company profiles. [MBIE] assesses these employees to be at the highest risk for exploitation.”

Restaurant Brands New Zealand says three franchised stores left the network after it was made aware they were being investigated by MBIE in relation to migrant workers.  

"Restaurant Brands has met with MBIE to work collaboratively on ensuring that the Pizza Hut franchisee community is compliant with labour and immigration laws," chief executive Ian Letele says.

"We take a zero-tolerance approach with any franchisees where it is shown that a franchisee is not legally compliant. Restaurant Brands audit franchisees regularly to ensure compliance on a range of standards of operating a Pizza Hut franchise, included is checking compliance with all labour laws," he says.  At the end of the 2017 financial year, 58 of the 93 Pizza Hut stores were independent franchises.

Nathan Santesso, an Auckland lawyer who specialises in employment rights, says in his experience, exploitation of those on sponsored visas is more common - however, poor treatment often begins during the early, “open work” visa stage.

“It’s when an employer says: ‘You can work for anyone you want, but if you stick with me, I will sponsor you and I will help you get residency. So, [workers] waste their open work visa with that person because they think they’ll get work later on when that runs out,” Santesso says.

“The open work visa [is better] because you can get a job and you can quit it the next day - so that doesn’t affect your immigration status at all." A student visa allows for up to 20 hours of work each week. Because it is not intended for employment purposes, it has 'open work' conditions - enabling holders to work in any business. Sponsored work visas specify the company a person must work for, and the position they hold.

Santesso believes better scrutiny of sponsored visa applications - where employers are required to supply Immigration NZ with employment information - is needed.

“It comes down to resources. You see in the paper that they grill people on whether it’s a genuine [partner] relationship - maybe check if it’s a genuine employment relationship. There’s a lot of these contracts that are just not honoured.”

Nelson lawyer Nick Mason has nearly a decade of experience in immigration and employment law, and emphasises the complexities of addressing problems of migrant exploitation.

“The idea of auditing every single employer is almost impossible.”

Compliance and monitoring requires a lot of work, and available resources are already stretched, he says.

Mason points to the level of oversight under the Regional Seasonal Employer [RSE] scheme as a possible option. Employers involved in the scheme, which allows workers from selected Pacific countries to work in seasonal roles in the horticulture and viticulture industries, are closely scrutinised by authorities to ensure laws are followed. While the scheme hasn’t escaped allegations of exploitation, Mason believes its compliance practices could be worth expanding to other parts of the system - but admits student visas are tricky.

“Good employers are really good employers. When you look at the RSE scheme and the auditing and those sorts of things that happens there - those guys hardly ever get it wrong, and that works really well. But, it also takes a lot of resources on the part of the Government for that scheme."

Because student visas are designed to enable study, with part-time employment just an option, patrolling what happens to student visa holders in workplaces is difficult for authorities, he says. 

“Immigration NZ doesn’t even necessarily know they’re [student visa holders] working, unless they marry up with IRD. I’m just not sure how you’d get every applicant to declare their earnings and where they’ve worked." 


Read more:

Immigration and education system under siege

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