The government should legislate to make sure people employed by overseas companies get at least minimum New Zealand pay and conditions while they are here, the Council of Trade Unions says.
The union group made the call following case brought by the Rail and Maritime Union over employees of a Chinese firm sent to New Zealand to fix trains sold to KiwiRail.
The workers were brought in to fix 40 locomotives, bought from China between 2009 and 2013, which were found to contain asbestos. KiwiRail had invoked a warranty, and the Chinese manufacturers sent workers to the Lower Hutt railway workshops to deal with the problem.
The Rail and and Maritime Transport Union claimed the job should have been done by New Zealand workers and made a complaint to the Employment Relations Authority.
As part of its complaint, the union also sought a determination that the Minimum Wage Act 1983 and the Holidays Act 2003, referred to as a minimum code, applied to employees of the Chinese firm, CNR.
In her ruling dismissing the union's case, Employment Relations Authority member Michele Ryan found the union didn't have any standing to claim on behalf of the Chinese workers.
She said KiwiRail had no employment relationship with the Chinese staff, who were hired in China, not in New Zealand.
"KiwiRail is not the employer of CNR employees. It has no legal obligation towards [CNR] employees under minimum code legislation."
The authority made no judgement on CNR employees pay rates but noted that information "tended to support a conclusion" that they were "paid above relevant minimum wage orders whilst in New Zealand".
Council of Trade Unions lawyer Jeff Sissons insisted the union had a strong argument in that there was no guarantee or ability to check workers' pay or conditions.
"You've got really highly skilled workers coming to New Zealand to do this work, and we can't guarantee that they are paid even the minimum wage let along the rate that the KiwiRail workers would have got for doing the same work," he said.
Mr Sissons said the government should legislate to make sure workers in New Zealand employed by a foreign company, were working to New Zealand conditions.
"This sets a worrying precedent that if you use overseas workers then you can go for rock bottom rates. We would like to see this fixed by the government."
But Business New Zealand employment policy manager Paul Mackay disagreed that it was a precedent. The situation was "quite specific" as KiwiRail was enforcing a warranty.
The trains were being fixed under warranty by people whose employment conditions were their own business, not KiwiRail's, he said.
"We don't argue about how they pay their people overseas, we don't look into their arrangements," he said.
"It is not actually an issue for us in employment terms.
"Were those people to be hired by New Zealand companies, that would be a different matter. But they are not."
The government has legislated to protect foreign fishing crews, requiring foreign-owned vessels operating in New Zealand waters to be re-flagged to New Zealand and operate under local labour laws.
But Minister of Workplace Safety and Relations Michael Woodhouse said cases were not the same, and the government had plans to change the current law.
Mr Sissons said current rules could mean overseas people took an increasing share of New Zealand work without meeting New Zealand conditions.
Mr Mackay doubted that. "At the point that the warranty is over and the trains are working, we would expect New Zealand workers to maintain them and New Zealand workers to drive them," he said.