When considering director liability, the first thought that pops into your head is probably quite simple. Directors of a company wouldn’t be liable for a breach of an employment contract by the company, would they? In most cases this is correct, but there are times when it is not.
A High Court case Antuzis –v- DJ Houghton Catching Services Limited involved a group of Lithuanian nationals working as chicken catchers in conditions that the court held to be “gruelling and exploitative”. They completed time sheets to record the hours they worked, but the sheets were amended to dramatically reduce the number of hours, and therefore the amount they would be paid. They sometimes went unpaid altogether and there was suggestion of physical intimidation.
The High Court ordered the company to pay £1M compensation to the workers for:
- failure to pay the agricultural minimum wage;
- charging of prohibited work-finding fees;
- unlawfully withholding wages; and
- depriving the workers of facilities to wash, rest, eat and drink (the workers had to sleep in the back of a bus).
So, what’s new in this case? Two Directors of the company were found to be personally liable for some of the breaches of employment contracts. Why, I hear you ask? Because they deliberately acted unlawfully to the obvious detriment of the company and acted outside of their authority. The contractual breaches included the failure to pay applicable minimum wages, charging of unlawful ’employment fees’, failure to pay holiday pay and the arbitrary withholding of wages.
The moral of this tale is that even as Directors of a business you have to treat people fairly and properly. Most of us would do this anyway, but this case shows what could happen if we don’t.
One of the most challenging things about employment law is the number of changes and the frequency of them. We have changes in the law a couple of times every year, and then we have reported case, such as this one, that we have to know about. That is why you should always consult a specialist in employment law – although I might be slightly biased there!