Directors can be liable for breaches of employment contract

Directors of a limited company can be personally liable for breaches of an employment contract after a High Court ruling.

In the recent case of Antuzis V DJ Houghton, the High Court ruled that the employees were employed by Houghton in an exploitative manner. This included being paid less than the minimum wage, working extremely long hours, payments being withheld or frequently not paid, and no attempt to pay overtime or holiday pay.

Whilst a director is not liable for causing a breach of contract, if the breach of contract is an infringement of a statutory entitlement, this could be a failure by the director to comply with their duty to the company, which could in turn make them liable to a third party for causing that breach of contract.

In this case, the court ruled that the directors were personally liable for the breaches of contract because they did not genuinely believe that they were paying the minimum wage, overtime and holiday pay, nor that they were entitled to withhold payments that they did.

For professional and independent advice on any aspect of employment law, contact Hethertons employment team today on 01904 528200.