New Zealand court ruling closes overseas recruitment-fee loophole

By Nathan Brooks

On 8 October, New Zealand’s Employment Court ruled that migrant workers can challenge recruitment fees paid overseas to secure jobs in New Zealand.

The judgment in Labour Inspectorate v Top Produce Ltd and Bhatia v Khanna found that recruitment payments of this kind breached section 12A of the Wages Protection Act 1983. It overturned a 2003 ruling. For employers, the immediate issue is conduct before work begins: an overseas job-placement fee cannot operate as an informal condition of hiring.

What does the ruling change for employers?

The case followed accusations by the Ministry of Business, Innovation & Employment (MBIE) against Top Produce, a now-defunct kiwifruit-growing company in the Bay of Plenty. MBIE alleged that the company solicited payments from incoming migrant workers in exchange for a position.

Counsel for the Labour Inspector called the issue one of significant importance because it affected a particularly vulnerable part of the workforce.

Workers who paid such fees now have a basis to challenge them. The ruling also places recruitment-fee policies, candidate communications and complaint escalation inside the employer’s compliance process.

Lisa Meto Fox, an employment lawyer based in South Auckland, said she felt deeply encouraged by the decision. “These bad-faith actors were making a lot of money,” she said. She estimated charges could reach $60,000 per worker per job in New Zealand. Fox said the judgment closes the loophole those actors had exploited.

Top Produce entered liquidation in March, carrying a $1.5 million tax debt.

How were the fees collected?

The court heard that the solicitations, which may be typical of numerous New Zealand employers, occurred informally by phone or text. Workers had little or no protection during those conversations.

The judgment described the offshore location of a premium as a calculated feature of an exploitation model. Its purpose was to evade domestic regulation and trap vulnerable workers in debt bondage before employment began.

Payments commonly went by bank deposit to the employer’s offshore accounts or accounts held by the employer’s relatives, the court said. The payment route helped actors avoid tracing. Transactions generally involved little or no documentation, and workers frequently received no receipts.

The offshore arrangement sat in a gray area because premiums for employment were explicitly illegal when the transaction occurred in New Zealand. Fox called that gap a “loophole.”

What do the complaint figures show?

PMN reported figures released under the Official Information Act showing 198 complaints to the Labour Inspectorate about premiums in 2025/26, following 270 in 2024/25 and 391 in 2023/24. These counts measure complaints, not confirmed cases or the total number of workers who paid fees.

MBIE had not recorded complaints from workers in the Recognised Seasonal Employer (RSE) Scheme about premiums specifically. Fox said migrant workers rarely complain because they fear deportation. She said: “I am on the record talking about [the RSE Scheme] being akin to modern slavery.”

What could happen next?

Fox said the decision had prompted legal community discussions about how the judgment might be carried forward. Workers in the RSE Scheme could become a focus of that work.

Fox argued that the law should expand to make it unlawful for workers to be required to pay recruitment expenses, including:

• flights
• visas
• vaccines
• insurance

She said that approach would align the law with international human rights law. Her proposal goes beyond the job-placement fee addressed by the current judgment.

Fox said employers should pay recruitment fees and related costs. Under current practice described by Fox, RSE workers pay all those expenses, which she said represent a significant portion of their income earned in New Zealand.

The operational distinction matters. The October ruling addresses overseas job-placement premiums, while Fox’s proposal reaches worker-funded travel and compliance costs.

Where can workers report concerns?

MBIE accepts concerns through its migrant exploitation reporting line, 0800 200 088, and an online reporting form. The service provides interpreter support.

The next phase will turn on whether the legal community turns the 8 October judgment into broader protection for workers who fund their own recruitment and migration costs.