How To Dismiss An Employee When Their Visa Runs Out

Record numbers of people are immigrating to New Zealand. If you run a business that is in constant need of more staff, that is great news for you.

But when hiring for vacant roles, you must be careful to observe the laws about who can and cannot work here.

In particular, anyone you employ must have a visa that allows them to work in New Zealand. The visa may have restrictions on the type of work they can do, how much work they can do and who they can work for.

You could face a penalty of up to $50,000 if you employ someone who is not entitled to work here or is otherwise in breach of their visa conditions.

TWO SCENARIOS

There are at least two scenarios where you might run the risk of a penalty.

1. When you hire someone who is not entitled to work.

To avoid a penalty for hiring an immigrant you later find out is not entitled to work, you must demonstrate that you took reasonable precautions and exercised due diligence to ascertain whether they were in fact entitled to work.

At the very least, that means asking whether someone is entitled to work as part of the hiring process and requesting a copy of their visa where appropriate.

Turning a blind eye, or just assuming someone is entitled to work for you, will not be a sufficient excuse.

2. When you legitimately hire someone according to their visa conditions, but their visa expires.

Another situation employers can find themselves in is that they employ an immigrant who has a limited visa, but continue to employ that person after their visa expires.

To avoid unwittingly hiring someone beyond their entitlement to work, you should carefully record or diarise a review of their conditions prior to their lapse.

Let’s assume you find yourself in either of those situations. What should you do next?

YOUR OBLIGATIONS TO AN EMPLOYEE WHO HAS NO VISA

In either of the situations described above, you have competing obligations.
On the one hand, the law says that you must not continue to employ them. If you do, that exposes you to a penalty.

Yet you also have obligations to your employees, whether under the terms of employment that you both signed or the general provisions under the Employment Relations Act 2000 to act fairly, reasonably and in good faith.

If you were to simply dismiss your employee without a fair process, you might run the risk of breaching those employment obligations.

So what should you do?

A SUGGESTED APPROACH

As I have explained elsewhere, you can fairly dismiss an employee if you have good reasons for ending their employment and follow a fair process to arrive at your decision to dismiss.

There is no doubt that you have good reasons to dismiss an employee if they are not entitled to work. So that aspect is covered.

Nevertheless, you must still follow a fair process as far as possible – though you may need to act quickly.

Furthermore, you are not at risk of a penalty if you continue to employ someone who is not entitled to work for their contractual period of notice after you have communicated your decision to dismiss. But you can’t continue to employ them after their period of notice has ended.

Putting that together, a fair process may look something like the following:

  • Tell the employee what you understand about their entitlement to work and ask them to meet with you urgently to provide their response. Advise them that if they are not entitled to work, you will need to terminate their employment. Invite them to bring a support person to the meeting if they wish.
  • Meet with the employee and listen to their response. Ensure that there are no misunderstandings about their entitlement to work. If it appears that the employee is not entitled to work, give them notice of termination. Advise the employee that they are able to continue to be employed for the period of their notice of termination specified in their employment agreement.
  • Continue to employ them for the period of notice of termination, but ensure their employment ends after that period of notice expires.

CONCLUSION

When you employ staff, you must take care to ask about their entitlement to work in NZ and to seek proof of that entitlement where appropriate.

Failure to do so could lead to you employing someone who is not entitled to work and receiving consequent penalties.

If you find out that someone is no longer entitled to work in NZ, or was never so entitled in the first place, you must take swift action. Ultimately, you have good grounds to dismiss if there is no entitlement. Nevertheless, you must respect the period of notice specified in their employment agreement.