Money changes hands overseas. A visa is issued. A worker arrives in New Zealand already in debt, already dependent, and already afraid to complain.

Then the job becomes something less than the promise. Hours disappear. Wages are withheld. Conditions deteriorate. The worker cannot easily leave because leaving may mean financial ruin, loss of immigration status, or both.

That is the business model the Employment Court confronted in Labour Inspector v Top Produce Ltd and Bhatia v Khanna.

The Court was asked a preliminary question: does the Wages Protection Act prohibit an employment premium where the payment is made outside New Zealand, but the job being bought is in New Zealand?  The unanimous answer of a Full Court was: yes.

The Fiction Of The Offshore Loophole

Section 12A of the Wages Protection Act 1983 is not complicated. It says that no employer, or person acting for an employer, may seek or receive a premium in respect of somebody’s employment.  Put bluntly: a New Zealand job is not for sale.

Yet an older 2003 decision, Mehta v Elliott, had been interpreted as meaning that a premium paid offshore was outside the reach of the provision. That created a perverse distinction. An employer could not lawfully demand money for a job in Auckland if it was paid in Auckland, but might avoid the prohibition if it was paid in cash overseas, deposited into a relative’s foreign account, or collected by an informal intermediary before the worker arrived.

The Full Court rejected that approach.  The relevant legal connection is not the location of the cash, the bank account, or the person physically receiving the payment. It is the New Zealand employment relationship.  That is the hinge upon which the law turns.

Debt Before Day One

The Court was careful not to decide whether the defendants in either proceeding actually breached the law. Those allegations remain for trial.

But it considered extensive evidence about how offshore pay-to-work arrangements operate in practice. The picture was bleak and recognisable.

Workers are told that payment is required before a job, visa token or employment agreement will materialise. Money is transferred through cash, relatives, associates or informal community networks. Receipts are absent. Conversations take place through calls, messaging apps and family members, often in the worker’s first language.

The Court recorded evidence that demands commonly fall between $10,000 and $60,000 per employee.  Those payments are often funded by high-interest borrowing, family loans, mortgaged property, or the sale of assets. The point is not simply that a worker arrives poorer. The point is that the debt makes the worker easier to control.  A person who has borrowed heavily to secure a job is less likely to report wage theft, unlawful deductions, unsafe work, immigration breaches or bullying. They may endure conduct that a financially secure New Zealander would walk away from immediately.

That is why the Court referred to debt bondage. It is not a dramatic metaphor. The International Labour Organization recognises recruitment fees and worker debt as a major indicator of forced-labour risk.

The Employer Cannot Hide Behind An Intermediary

The judgment also deals with the most obvious evasion technique: keeping the employer’s own hands apparently clean.

Section 12A expressly covers not only an employer but a person acting on the employer’s behalf. The Court held that if an intermediary is engaged to collect a premium for employment, their receipt is legally the same as receipt by the employer. That's relevant because the real world does not usually offer a neat invoice reading: “Payment required for New Zealand job.”  The arrangement may be deliberately opaque. Cash may be used. Funds may go to an associate, a family member or an overseas account. The employer may say it never touched the money.

The Authority is entitled to look at the whole factual matrix and draw robust, common-sense inferences. A legal system that required a worker to produce a formal receipt for an unlawful cash payment would be a legal system designed to reward concealment.

Employment Law Is Not Ordinary Contract Law

The more important part of this judgment is its tone.  The Court emphasised that employment law is not simply commercial contract law with a different venue. It exists within a relationship marked by an inherent imbalance of power. Minimum standards are a floor, not a negotiating position, and private arrangements cannot contract workers out of them.  That matters particularly for migrant workers.

The Court accepted that the right to work is a human right, and that it includes the ability to earn a living through freely chosen employment. A demand for money in exchange for the job itself is not merely an unpleasant recruitment practice. It strikes at that freedom.

New Zealand has also committed itself to international labour standards that reject the charging of recruitment fees to workers. Reading the law narrowly, so that a foreign payment could purchase a New Zealand job with impunity, would have hollowed out those commitments.

The Law Has Caught Up. Enforcement Must Now Follow.

This decision does not mean every offshore recruitment fee is automatically unlawful. The facts will still matter. There may be legitimate service arrangements that are not a premium for employment, and the Court has not determined the underlying allegations against the parties in these proceedings.  But the central proposition is now clear.

An employer cannot sell a New Zealand job, arrange for the price to be collected offshore, and then claim New Zealand law has nothing to say about it.  For too long, that was the practical effect of the loophole.

The Full Court has now closed it. The harder question is whether labour enforcement, immigration settings and employer accreditation systems are equipped to find these arrangements before workers arrive carrying debt they should never have been forced to incur.

A job is not a commodity. It is not a ticket to be auctioned off to the most desperate applicant.  And it is not for sale.

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References

• Labour Inspector of the Ministry of Business, Innovation and Employment v Top Produce Ltd and Bhatia v Khanna [2026] NZEmpC 240, 8 October 2026

• Wages Protection Act 1983, s 12A

• Employment Relations Act 2000, ss 3 and 238

• Immigration Act 2009, s 351A.

• International Labour Organization, ILO Indicators of Forced Labour (2025).