Directors may be personally liable for company breaches of an employment contract.

17th May 19

The High Court has held that directors of a limited company can be personally liable for breaches of an employment contract.

 

In the High court case, Antuzis v DJ Houghton,  the Claimants were employed by Houghton in an exploitative way.  They worked extremely long hours and were paid less than the statutory minimum. Often they were not paid their full wages, with monies withheld. Holiday pay and overtime were not paid.

 

Directors are not generally liable for inducing a breach of contract, but if the breach of contract has a statutory element, it suggests a failure on the part of the director to comply with their company duties.  This can make them liable to a third party (i.e. employees) for inducing the breach of contract.

 

The court concluded that the directors were not acting legitimately.  They did not believe that they were paying the minimum wage, overtime and holiday pay nor that they were entitled to withhold payments. They were, therefore, personally liable for the breaches of contract that they induced.