Assets of former Indian restaurant owners frozen in employment dispute

NZ Herald,
Publish Date
Wed, 5 Jan 2022, 3:25pm
The Chilli Indian Restaurant in Hamilton, which is now closed. Photo / Supplied
The Chilli Indian Restaurant in Hamilton, which is now closed. Photo / Supplied

Assets of former Indian restaurant owners frozen in employment dispute

NZ Herald,
Publish Date
Wed, 5 Jan 2022, 3:25pm

Assets belonging to owners of a former Indian restaurant business in Hamilton has been frozen by the Employment Court. 

Jayant Kaushal and his wife Deepti Kaushal, who are directors of JDfoods Limited, were named as respondents in a case brought about by the Ministry of Business, Innovation and Employment. 

JDfoods operated a restaurant known as the Chilli Indian Restaurant in Hamilton, until the business on Whatawhata Rd, Dinsdale, was sold in May last year. 

Jayant Kaushal, is one of the directors with 51 per cent of the company's shares, and his wife and co-director Deepti Kaushal, holds 49 per cent. 

MBIE Labour Inspector Melissa MacRury says $57,249.93 is owed to three former employees and consider the company had breached the Employment Relations Act 2000, the Wages Protection Act 1983, the Minimum Wages Act 1983 and the Holidays Act 2003. 

Directors are Indian nationals and there are fears they could relocate to India or Australia. Photo / File 

She says Deepti and Jayant Kaushal are persons involved in breaches, and filed a statement of problem with the Employment Relations Authority on June 8, 2021. 

The breaches were denied by the respondents, who claim that Jayant was involved in running the business, but not Deepti. 

They denied that their records were inaccurate or misleading, and assertions that the employees worked more hours than were recorded, and had been underpaid. 

They also denied ever seeking or receiving premiums and claim that various payments and cash withdrawals were not made directly to them or for their benefit. 

Even after two mediation sessions on October 22 and December 10 last year, the matter remained unresolved. 

MacRury then brought this application for freezing orders and ancillary orders from a concern that assets are being dissipated by the respondents. 

Investigations into the company commenced after a complaint was made by an employee in June 2020, and the Inspectorate's report was concluded in May last year. 

By this time, the restaurant had been sold by JDfoods and the company does 
not now appear to be operating, with the Companies Office records showing it is overdue in filing its annual return. 

Both Jayant and Deepti are the only shareholders of another company, which also does not appear to be trading. 

MacRury said that for some months the couple had been selling their belongings, including furniture and their vehicle via a Facebook page. 

A property held in their names was listed for sale on December 9, 2021. 

MacRury said these assets were sold or being sold without the Labour Inspector, or the Authority, being informed. 

The application to freeze their assets were being brought because the sale of real estate and assets could, according to the Labour Inspector, result in the loss of any chance of payment of arrears to affected employees and penalties which may be awarded. 

Judge Bruce Corkill accepted that if interim orders are not granted, the Labour Inspector may be in a position where she is unable to recover any funds. 

"This would mean that those affected by proved breaches would not receive the arrears owed to them, or possible compensation for the treatment they alleged they suffered during the course of their employment," he said. 

The Judge also accepted that any hardship suffered by the interim order could be mitigated by a direction that the freezing will not prohibit the respondents from 
dealing with the assets covered by the order for the purposes of paying living expenses, legal expenses relating to the freezing order, or making payments in the ordinary course of business. 

"Jayant and Deepti Kaushal are husband and wife and are both citizens of India. The Labour Inspector believes that once they have sold their business and personal assets in New Zealand, there is a risk the proceeds of sale could be transferred offshore or that they might relocate to India or to Australia," Judge Corkill said. 

"I accept that there is a legitimate basis for concluding there is a danger of 

Corkill concluded that a freezing order was appropriate and granted the ancillary orders as sought. 

"I am satisfied having regard to all the circumstances disclosed in the affidavit evidence that there is a danger that any judgment ultimately made in favour of the Labour Inspector will be wholly or partially unsatisfied, because assets of the respondents may have been disposed of, dealt with, or diminished in value," he said. 

The freezing orders are effective until 4pm on January 28, 2022. 

- by Lincoln Tan, NZ Herald