Personal Liability of Directors
12 April 2019 #Other
The High Court in Antuzis v DJ Houghton has recently held that directors of a private limited company could be pursued personally for breaching an employment contract.
The Claimants in this case were employed by Houghton. They worked extremely long hours and were not paid for their overtime or holiday. As well as this, they were paid less that the statutory minimum wage and frequently, Houghton withheld payments due to them.
Directors are not generally liable for inducing a breach of contract where they are acting in good faith in accordance with their duties to the company. However, statutory breaches of contract, such as those committed in this case, could suggest some failure on behalf of the directors, resulting in the breach.
In this case, the court concluded that the directors were not acting in good faith, as they knew that the claimants were being paid less than the minimum wage and that they were not being paid for overtime or holiday. They also knew that they were not entitled to withhold payments from them as they had been doing. Due to this, the court found that the directors were personally liable for the breaches of contract that they had induced.
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