Migrant workers asked to pay tens of thousands of dollars for New Zealand jobs will not lose the protection of local law simply because the illegal premium was paid overseas, the employment court has ruled.

A three-judge full court has found New Zealand’s ban on charging workers for employment can apply even where some or all of the payment is made in another country.

The ruling comes amid evidence that migrants are increasingly being asked to pay between $10,000 and $60,000 for New Zealand jobs, often before they have even arrived in the country.

Chief Judge Christina Inglis, Judge JC Holden and Judge Helen Doyle said the key issue was the New Zealand employment itself, not where the money changed hands.

“The place in which the premium transaction occurred is irrelevant,” the judges said in their October 8 decision.

The court was considering a preliminary legal question arising from two separate cases that had been transferred from the Employment Relations Authority (ERA).

One was brought by a Labour Inspector against Top Produce Ltd, Jagdip Singh Bains and Amandeep Singh. The other involves workers Shiv Bhatia, Robin Dhillon, Sajan Singh and Anil Kumar and defendants Ritesh Khanna, Emad Bin Saif and Khanna Enterprise Ltd, which is in liquidation.

The Court has not decided whether any of those defendants actually charged unlawful premiums. Evidence in the two substantive cases is still to be heard, and those allegations will be determined separately.

What the judges were asked to decide was whether employers could avoid New Zealand’s cash-for-job laws where the payment itself took place overseas. Their answer was no.

Under section 12A of the Wages Protection Act, an employer or someone acting on an employer’s behalf cannot seek or receive money in return for employing a person.

The full court said allowing employers to escape the law simply because money was handed over overseas would undermine the purpose of the legislation.

In practice, it could mean an employer directing a worker to pay cash to a relative overseas, transfer money into a foreign bank account or deal with an intermediary outside New Zealand and then arguing the transaction sat beyond the reach of New Zealand law.

The court rejected that approach. Evidence before the judges described offshore job premiums as an increasingly common feature of migrant exploitation.

Workers may be asked to make an initial payment before receiving an employment agreement, with further payments demanded after a visa-related document is issued or once a visa has been approved.

The money is often raised through family borrowing, high-interest loans, selling assets or mortgaging property, leaving migrants under significant financial pressure before they start work.

That debt can make workers more vulnerable to exploitation once they arrive in New Zealand, particularly where their immigration status is tied to the job they have paid to secure.

The court also dealt with situations where the employer does not personally collect the money. It said New Zealand law already covers people acting on behalf of employers, meaning a payment collected through a relative, associate or other intermediary can in some circumstances be treated as having been received by the employer.

The judges warned that a narrower interpretation could reward employers who deliberately insulated themselves from the payment by using other people to collect it.

The ruling also revisits a 2003 employment court decision, 'Mehta v Elliott', which had been interpreted as supporting the view that offshore payments were outside the reach of the prohibition.

The full court said that judgment was “a creature of its time”, delivered before offshore recruitment pipelines and pay-to-work arrangements had become such a prominent feature of migrant exploitation.

The court also recognised these arrangements can be difficult to prove because payments may be made in cash, through overseas accounts or by informal agreement, with conversations taking place through phone calls or messaging apps.

It said decision-makers could draw robust, common-sense conclusions from the overall evidence rather than requiring a perfect documentary trail in every case.

The ruling now makes one point clear. Money demanded in return for a New Zealand job does not stop being covered by New Zealand law just because it is collected overseas.