Can New Zealand law recover employment premiums paid overseas?

On 28 and 29 July 2026, a Full Court of the Employment Court is listed to hear a preliminary issue in A Labour Inspector v Top Produce Limited & Others and Bhatia & Others v Khanna & Others. The central question is whether section 12A of the Wages Protection Act 1983 can apply where an alleged premium for New Zealand employment was sought, received, or paid wholly or partly outside New Zealand.

Important: In the matter where the Employment Relations Authority removed this matter to the Employment Court, I was representing Mr Bhatia. I asked David Fleming for the "comprehensive argument" the Chief Judge said was needed to reconsider Mehta v Elliott [2003] 1 ERNZ 1. Mr Fleming was unable to give me an argument beyond the Chief Judge having called for "comprehensive argument". Bhatia v Khanna [2025] NZERA 738; Since the removal decision of the Authority I am no longer involved in the matter.

At a glance

Dates: Tuesday 28 and Wednesday 29 July 2026, 9.30am
Place: Employment Court, Courtroom 2.02, 41 Federal Street, Auckland
Judges: Chief Judge Inglis, Judge Holden and Judge Doyle
Matter: preliminary issue
Cases: Top Produce and Bhatia v Khanna
Wider participation: counsel to assist and four interveners are listed

Argument for section 12A applying (Lawrence Anderson analysis)

The strongest argument for the workers and Labour Inspector is that section 12A is directed at the connection between the premium and the employment, not merely the physical place where money changed hands.

The statutory wrong is seeking or receiving a premium for employment. If the employment is with a New Zealand employer and is to be performed in New Zealand, the transaction has a strong New Zealand connection.
Purpose matters. A rule confined to payments physically made in New Zealand would be easy to avoid: the employer could simply direct that payment be made overseas.
The relevant conduct may occur in more than one place. A demand, agreement, arrangement, receipt, or benefit may occur in New Zealand even where the first bank transfer or cash payment occurs offshore.
The facts may distinguish Mehta. In Top Produce, the published determination records some evidence of onward remittance to New Zealand bank accounts, including an account in the name of one respondent. That allegation remains disputed, but it may make the case materially different from a wholly offshore payment.
Fusion invited reconsideration. The Chief Judge questioned whether Mehta was necessarily the impediment previously assumed and said the issue should be considered by a Full Court with comprehensive argument.

Argument for Mehta continuing to apply (Lawrence Anderson analysis)

The strongest response is that Mehta v Elliott directly addressed premiums paid outside New Zealand and held that the employment institutions lacked jurisdiction. The Court said the resulting gap was unsatisfactory, but was for Parliament to fix.

Mehta remains an actual decision; Fusion is obiter. A brief expression of doubt, without full argument or statutory analysis, does not itself displace a reasoned judgment.
Section 12A contains no express offshore reach. Courts ordinarily require clear statutory language or necessary implication before applying New Zealand legislation to conduct outside New Zealand.
Purpose cannot replace text. Preventing exploitation is an important purpose, but a court must interpret the section Parliament enacted rather than create a general international recruitment-fee regime.
Parliament has not amended the point decided in Mehta. That silence is not conclusive, but it is relevant context—particularly because Parliament has amended employment-standards legislation since 2003 without expressly extending section 12A to offshore transactions.
Different facts require different answers. A payment ultimately received in New Zealand may be distinguishable from an alleged cash payment made and received entirely overseas. The Court does not need to overrule Mehta to deal with conduct proved to have occurred in New Zealand.

What has changed since Mehta?

The strongest basis for reconsidering Mehta is not simply that migrant exploitation is undesirable. Since that decision, legislation and regulations have expressly provided machinery for the employment institutions to deal with cross-border employment disputes, including service on overseas parties. The Supreme Court in Brown v New Zealand Basing Ltd also preferred a provision-specific assessment of territorial scope rather than imposing one territorial limitation across the Employment Relations Act.

Those developments establish that the Employment Court may hear employment disputes containing foreign elements. They do not, by themselves, answer the different substantive question whether section 12A regulates conduct occurring wholly outside New Zealand.

The place of payment may not answer the whole question

Section 12A prohibits the seeking or receiving of a premium. The Court must therefore identify the particular statutory conduct alleged, the person who committed it, where it occurred, and the particular recovery or penalty provision relied on. A demand communicated from New Zealand, an offshore payment later remitted to New Zealand, and a transaction sought, paid, and received entirely overseas may require different answers.

Parliament also amended section 12A directly in 2016. It extended the prohibition to persons engaged on behalf of an employer and created recovery rights against persons involved in non-compliance, but did not expressly extend the provision to offshore conduct. That is relevant context supporting Mehta, although legislative silence is not conclusive.

My view

Fusion does not itself undermine Mehta. It raised a question; it did not answer it. The constitutional point is straightforward: courts interpret legislation, but Parliament determines the reach of the statutory scheme. If section 12A is to cover every premium paid anywhere in the world merely because the proposed job is in New Zealand, the better course is for Parliament to say so expressly.

That does not mean every offshore payment must automatically fall outside the Act. The Court should identify the particular statutory act alleged—seeking, receiving, or participation in the breach—and determine where that act occurred. Top Produce may be capable of distinction if New Zealand receipt or conduct is proved. A transaction alleged to have been required, paid, and received wholly overseas presents the harder case and is much closer to Mehta.

A principled outcome would preserve Mehta for genuinely offshore transactions while confirming that routing one step of a New Zealand employment-premium arrangement through an overseas account does not automatically defeat section 12A. That approach addresses avoidance without turning judicial interpretation into an amendment Parliament has not enacted.

What the Court may do

The Full Court may confirm Mehta, distinguish it on the facts, or depart from it and adopt a broader interpretation of section 12A. Because the public listing describes this as a preliminary issue, the hearing should not be reported as deciding whether the alleged payments occurred or whether any respondent is liable. Those factual and liability questions remain separate unless and until the Court determines them.

Sources: Employment Court hearing list; A Labour Inspector v Top Produce Ltd & Others [2025] NZERA 587; Bhatia v Khanna [2025] NZERA 738; Wages Protection Act 1983, s 12A; Employment Court information for media and the public.

This article is legal commentary based only on publicly available material. It is not a statement that any disputed allegation is true and is not legal advice about publication in any particular case.