The former owners of a Dunedin taxi company may have to pay staff underpaid by $80,000 out of their own pocket after the Court of Appeal ruled ignorance of the law is not a valid excuse.
Southern Taxis Ltd were ordered to pay $80,000 in July 2018 by the Employment Relations Authority (ERA) after it determined the taxi company's drivers were employees.
The company had previously denied they were employees, arguing they were contractors.
The authority said Southern Taxis owed drivers unpaid entitlements such as minimum wages, holidays, rest breaks and unlawful deductions.
The company, which operated from 2002 to 2016, paid its drivers a flat rate of 40 percent commission from the earnings they received driving vehicles owned by the company.
Southern Taxis' two directors and shareholders, Maureen and Ronald Grant, declared it had discharged its liabilities in full to all its known creditors.
The ERA, however, decided the directors were personally liable for the arrears since they were involved in the company breaching its obligations by being "wilfully blind" to the possibility that the drivers were employees.
On appeal by the directors, the Employment Court determined in May 2020 the directors were not personally liable.
The Ministry for Business, Innovation and Employment appealed that decision.
On December 20 last year the Court of Appeal ruled it was not relevant the directors believed their drivers were contractors rather than employees.
The key was instead whether Mr...
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