A judge says a property developer used “inexcusable” delaying tactics while trying to overturn $96,000 in penalties for multiple employment law breaches involving migrant workers.

Napier developer Malcolm Herbert and his company MAH Enterprises will now have to pay almost another $10,000 in court costs after he failed to follow up on a challenge to penalties award in the Employment Court.

A labour inspector from the Ministry of Business, Innovation and Employment (MBIE) began an investigation in 2021 after an employee alleged he had not been paid for the annual holidays he was entitled to.

The inspector’s report concluded that MAH had breached the law 42 times by failing to keep proper wage, time, holiday and leave records. It said 13 employees did not receive annual leave entitlements and, for another worker, MAH was using an individual employment agreement that did not comply with the law.

In July 2023, the Employment Relations Authority (ERA) ruled the company must pay a penalty of $64,000 and Herbert, as its sole director, must pay $32,000.

Half of the penalties amount - $48,000 - was ordered to be paid to the 14 workers, 10 of whom were from overseas.

Herbert appealed the ERA decision to the Employment Court last year.

Delay ‘inexcusable’, says judge

Employment Court Chief Judge Christina Inglis has now said that MAH Enterprises subsequently made no attempt to follow up on the legal challenge.

She said the delay was “inordinate and inexcusable”, similar to what happened at the ERA hearing.

“The ongoing delays are prejudicing the 14 employees at the centre of the proceedings who were to be paid a portion of the penalties awarded by the authority and who are facing ongoing uncertainty as to their position,” Judge Inglis said.

“They are entitled to closure.”

She dismissed Herbert’s challenge to the ERA determination.

She also ordered that Herbert and MAH Enterprises pay the $9799 court costs of the failed application.

At the ERA hearing last year authority member Sarah Kennedy-Martin said it was an aggravating factor that MAH Enterprises had employed migrant workers, who were entitled to be treated with respect.

Kennedy-Martin said the inspector had been unable to investigate properly because Herbert and the company had consistently failed to provide all the information requested and required.

“Despite repeated attempts to engage with Mr Herbert to obtain the material required to complete her [the inspector’s] investigation, Mr Herbert either did not respond, sought extended deadlines that he also did not meet and then, when he provided information, it was not complete,” Kennedy-Martin said.

Brendon Strieker, a compliance manager for the Labour Inspectorate, said in a statement that Herbert and his company had repeatedly tried to delay proceedings, which had been frustrating for the inspectors and unfair to the workers involved.

“It is pleasing that these stalling tactics have not been successful,” he said.

“Hopefully, these vulnerable workers will now receive some compensation for what they have been through,” Strieker said.

“The Inspectorate views exploitation as among the most serious breaches of employment standards.

“Our inspectors will continue to seek out non-compliance with minimum employment standards and take appropriate enforcement action where exploitation of vulnerable workers is identified.”

Another of Malcolm Herbert’s companies, Herbert Construction Ltd, was placed in liquidation following a court order last week. It had been operating for two years.

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Hawke’s Bay Today has reported that the company has been in pay disputes with several contractors.

The liquidation application was made over claims that 500 hours of labour, represented by about $28,000 in invoices, was owed to labour-hire company Workforce Solutions.

Those invoices related to work done in April on the Raffles Apartments project on the edge of the Napier central business district.

A question mark hangs now over the future of the project, where 30 new apartments are being built in a four-storey development.

Herbert Construction is the main company listed on the Raffles Apartments website.

‘You are allowed to have a dispute,’ says Herbert

An attempt has been made to contact Herbert to comment on Judge Inglis’s employment court decision.

Concerning the Raffles Apartment project, Herbert has said previously that he was in dispute with the labour-hire company and “you are allowed to have a dispute”.

When contacted about the liquidation of Herbert Enterprises, Herbert replied with a text message to say the Raffles Apartments development was “moving ahead without any issues”.

Ric Stevens spent many years working for the former New Zealand Press Association news agency, including as a political reporter at Parliament, before holding senior positions at various daily newspapers. He joined NZME’s Open Justice team in 2022 and is based in Hawke’s Bay. His writing in the crime and justice sphere is informed by four years of front-line experience as a probation officer.