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Personal liability means no escape from paying staff, says Labour Inspectorate

The Labour Inspectorate has successfully applied to have ‘company officers’ made personally liable for $138,836 in arrears over the last month, after the companies went into liquidation.

The wife of a Nando’s franchisee was found liable in November for the $70,053 in arrears that the company owed in unpaid wages and holiday pay, when the company was liquidated and the director was declared bankrupt.

Corrado Ramada was the sole director and shareholder of Adamar No 2 Limited, the company associated with the Nando’s outlet in Henderson, and his wife Kim Ramada was part of the management team overseeing payments to employees.

Eight migrant workers who had been working at the Henderson restaurant are owed money, including one employee who is owed more than $20,000 in arrears.

Despite Mrs Ramada denying involvement in the company, the evidence provided led to the ERA ruling otherwise, leaving Mrs Ramada personally liable for the outstanding debt.

In another case brought by the Inspectorate this month, the owner-operators of Indian retail clothing stores across Auckland, Neelam Ahuja, Chirag Ahuja, and Rhythm Ahuja, were found personally liable for $68,783 in unpaid wages and holiday pay owed by their companies.

Four employees who worked at the stores claimed the Ahuja family often paid in cash and asked them to sign time records stating they only worked 20 hours a week.

“The Labour Inspectorate does not tolerate employers, including company officers, who fail to meet their obligations as employers to provide at least a minimum wage and holiday pay,” says Labour Inspectorate Regional Manager Loua Ward.

“In both of these cases the business owners had employed migrants, who may not have been fully aware of their rights as employees in New Zealand, and exploited them for personal gain.

“We will not hesitate to pursue personally those who try to avoid paying their employees what is owed.”

The two separate cases were taken by the Labour Inspectorate who proved that the company officers had directed or authorised the default in payment, under section 234 of the Employment Relations Act.

Section 234 ensures that minimum employment entitlements are available to employees, even in situations where the employing companies are insolvent or otherwise unable to pay.

The Ministry of Business, Innovation and Employment encourages anyone in this situation, or who knows of anyone in this situation, to call its contact centre on 0800 20 90 20 where their concerns will be handled in a safe environment.

You can read the ERA cases online: