ERA decision against Restaurant Brands blow for migrant workers

Former immigration minister Tuariki Delamere is seeking to overturn the recent Employment Relations Authority decision awarding an $18,000 pay-out to unjustifiably dismissed fast food manager Dilshaad Gill.

While the ERA found in the migrant worker’s favour, Delamere believes the decision sets a harmful precedent for employers that will destroy the hopes of other skilled migrants seeking jobs in New Zealand. Caught between trying to obey immigration law and avoid the financial hit of such pay-outs, big employers will be dissuaded from hiring skilled migrants on fixed-term visas, he says.

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The ERA decision shows an appalling lack of understanding of immigration processes. All employers and work visa holders are well aware that the work visa holder’s job security depends on being granted another visa when their current work visa expires.

The decision also hinged on representations made to Gill by Restaurant Brands. Employers should not give assurances or create expectations about the likely outcome of labour market testing, which they had done in Gill’s case. Restaurant Brands were obligated to let Gill know as early as possible that they were not intending to support his application and the reasons why, but they did no such thing. Both employers and work visa holders know that if advertising the position results in a qualified New Zealand citizen or resident visa holder coming forward, that person must be hired. Attempting to apply for a work visa in the face of that outcome is pointless and a waste of time and money, as the application will automatically be rejected.

This controversial decision seems to be telling employers to embark on pointless applications, wasting Immigration New Zealand’s time, the employer’s time, and providing no benefit to the employee, who runs the risk of a decline decision on their immigration record.

Classifying Mr Gill as a permanent employee was part of the problem in the first place:  Under the Employment Relations Act, an employer may not offer a fixed-term contract based on a visa expiry date. The rationale is that a visa expiry date is not a business justification for a fixed-term contract.

If employers were allowed to offer a fixed-term contract consistent with visa duration, it would make the situation unequivocally clear for employers and work visa holders,

providing much more certainty and likely enhancing compliance with immigration requirements.

The case highlights the importance of well-documented HR policies and terms of employment in particular:

  1. Employers must ensure that employment agreements are framed in such a way that employment is subject to the employee holding a valid work visa.


  1. Employers must also make clear how they intend to deal with employment termination where a labour market test is unsuccessful, and the business is unable to support the employee’s work visa application.

These issues will become even more important for employers to get right as the government is planning to introduce mandatory accreditation status for all employers hiring work visa holders later this year.

Are you an employer who needs accreditation assistance?

We can help you get your house in order and make sure you meet all the requirements, including financials, HR, and employment law compliance. We’re skilled in helping work visa applicants as well. Contact NZIL today.

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