The former owner of an Auckland restaurant business has been heavily sanctioned by the Employment Relations Authority (ERA) for multiple breaches of minimum employment standards even though the business is no longer trading and was liquidated in 2022.

Shen Yuan, the sole director of BDIT Limited, trading as Hua Restaurant, was recently ordered by the ERA to pay a former chef:

• $43,943.42 in wages arrears
• $21,000 as repayment for a premium demanded from him
• $20,000 in penalties.

Yuan’s wife Linlin Sun, who worked as a manager in his restaurant business, is jointly and severally liable for payment of the wage arrears and was ordered to pay $10,000 in penalties for her role in the breaches which occurred between September 2019 and September 2020.

Yuan and Sun must pay interest on the arrears. Yuan must also pay interest on the premium repayment.

The total amount the couple must pay in wages arrears, the premium repayment and penalties is $94,943.

Authority member Robin Arthur ordered that the former chef, a Chinese national, must receive $9,000 of the penalties due by Yuan and his wife.

BDIT Ltd formerly operated two restaurants in Auckland - one in Newmarket and the other in Albany. The Newmarket restaurant stopped trading in October 2019 and the Albany restaurant in September 2020.

This is the second time Yuan and his former restaurant business have been sanctioned by the ERA.

In 2020 Yuan and BDIT Ltd, trading as Hua’s restaurant, were ordered to pay their head chef $11,999.98 for outstanding wages.

The repayment order was made after Yuan failed to keep up the payments, as agreed in a record of settlement, following mediation in November 2019. Yuan had undertaken to repay the former employee $16,000 in weekly instalments of $666,67. However, he only paid $4000.02 leaving $11,999.98 outstanding.

Latest ERA determination

Simon Humphries, Head of Labour Inspectorate, said the fact Yuan had been ordered to repay the wages arrears and the penalties in the latest ERA determination, showed that even if a business has been liquidated the owners can still be held liable for breaches committed while the business was trading.

“Business owners and employers who have exploited vulnerable workers cannot hide behind the fact that the business where breaches of minimum employment standards were committed no longer exists. The Labour Inspectorate will vigorously clamp down on those who exploit vulnerable workers, even if they no longer own the business where the exploitation took place.”

He said the fact this was the second time Yuan had appeared before the ERA for similar breaches was concerning. “We would have hoped he had learnt that not complying with minimum employment standards can have serious consequences.”

Humphries said the Labour Inspectorate would continue to closely monitor for potential migrant worker exploitation and take enforcement action when necessary.

“However, where we can and the breaches are minimal and unintentional, we work with the employers and employees to educate or resolve a complaint.”

Authority member Robin Arthur said while the breaches committed related to one employee over a relatively short period, (the chef) was a visa-dependent worker and thereby vulnerable to exploitation by such breaches. “He also suffered extended periods where he did not receive the pay he was entitled to receive.”

Note to editors:

The wages arrears award (plus any interest) comprised:

• $29,990.93 for minimum wages
• $10,248.13 for annual leave entitlements
• $1,971.86 as pay for work on public holidays
• $1,732.50 for alternative holidays for public holidays worked.

MBIE encourages anyone who thinks they or someone else has been treated unfairly in the workplace to contact their contact centre at 0800 20 90 20 where their concerns will be handled in a safe environment.

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