Case Summary – Soapi v Pick Hawke’s Bay Inc [2025] NZEmpC 208

The Employment Court has determined that employers cannot make deductions from employees’ pay if those deductions would result in the pay falling below minimum wage.

The case clarifies the requirements of lawful deductions, within the context of the Recognised Seasonal Employer (RSE) scheme.*

Background

The plaintiffs were former employees of Pick Hawke’s Bay, employed under the RSE.

Deductions were made by Pick Hawke’s Bay to the employees’ pay. The various deductions were made for flights, food, personal protective equipment (PPE), insurance, immunisations, and branded shirts, among other things.

The employees were paid the adult minimum wage, however following the deductions, the pay received fell far below the minimum rate.

The employees were required by Pick Hawke’s Bay to hand over their passports. The Court noted that this likely made them vulnerable to exploitation.

The Court found the deductions made were unlawful for various reasons:

1. 1. Employers have an obligation to provide necessary PPE. Passing this cost onto the employee breaches the Health and Safety at Work Act 2015.

1. 1. The deductions were not approved by Immigration NZ, as is required under the RSE scheme.

1. 1. The deductions were made without the necessary express consent of the employees. This is a requirement of the Wages Protection Act 1983.

1. 1. The accommodation expenses deducted were not set within the employment agreements, and exceeded 5% of their rates of pay, which was in breach of the Minimum Wage Act 1983.

The Court ordered Pick Hawke’s Bay to reimburse the employees the amounts unlawfully deducted and pay interest on top of this. This amounted to payments between $6,076.54 and $19,056.23 for the three employees. The Court will also soon consider whether penalties should be ordered for breaches of good faith.

Key learnings

• • Consent – express, written consent from employees to particular deductions is essential.  

• • PPE – employers have an obligation to provide employees with necessary PPE to perform their work at no cost.

• • RSE / Migrant Workers – deductions from wages of migrant workers must be approved by Immigration NZ.

• • Accommodation charges – must be specified in the employment agreement and must not reduce the employee’s wages by more than 15% for board, or 5% for lodging.

• • Consider minimum wage – deductions that bring an employee’s pay under minimum wage are unlawful, even if the employee has consented to the deduction.

How we can help

• • Employment agreements should clearly set out any deductions agreed by the parties. We can assist with the drafting of suitable employment agreements, and specific deductions clauses or consent forms.

• • There are costs that employers can reasonably and lawfully deduct from employees. We can advise on employment costs, including advice on implementing systems to make lawful deductions.

• • We can provide representation to bring or defend claims related to alleged unlawful deductions.

Get in touch!

To contact our team, please email admin@cmalaw.co.nz or phone 03 211 0153.

*The RSE scheme allows employers in horticulture or viticulture to employ seasonal workers from specified Pacific Island countries.