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Can Directors be Personally Liable for Breaches of an Employment Contract?

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Yes, in certain circumstances. In this article our employment team look at the implications of the recent case of Antuzis –v- DJ Houghton Catching Services Limited.

One of the main benefits of the company formation for running a business (rather than a partnership for example) is that it is a separate legal entity and therefore, in most cases, claims are made against the company, rather than individuals/directors. There are exceptions to this general rule (for example in whistleblowing claims) and, following the recently ruled upon case of Antuzis –v- DJ Houghton Catching Services Limited, in certain circumstances, breaches of an employment contract.

Mr Antuzis was one of several, mainly Lithuanian, Claimants employed by DJ Houghton Catching Services Ltd, the Defendant.

During their employment, the Claimants were exposed to: –

  • Having their wages withheld or delayed for arbitrary reasons;
  • Being paid below the applicable minimum wage;
  • Being prevented from taking rest breaks;
  • Working hours that exceeded 48 hours per week;
  • Being prevented from taking annual leave; and
  • Victimisation when querying the conditions.

The Defendant was raided by the police and the Claimants brought claims for breach of contract in the County Court. Although the men signed no employment contracts, these breaches were committed in breach of contractual terms under the Agricultural Wages Act 1948 and the related Agricultural Wages Orders.

The Court ruled that the workers who brought the case were subject to an exploitative work regime by their employer and by its sole director, Darrell Houghton, and the company secretary, Jackie Judge. Normally, Directors of the Defendant would not be personally liable for such litigation. However, the County Court held that as the breach of contract was statutory – not paying the applicable minimum wage, not complying with Working Time Regs etc. – then they had not upheld their duties as Directors and were thus personally liable. Darrell Houghton and Jackie Judge, along with Lithuanian middle-man Mr Edikas Mankevicius, are currently also facing criminal prosecution in Lithuania relating to the treatment of the workers.

Our employment and HR team provide bespoke practical advice to businesses on all aspects of employment law and HR. For a free, no obligation quote, please contact us at [email protected] or call us on 029 2009 5500 to speak to one of our team.

The information contained in this article is for information purposes only and is not intended to constitute legal advice.