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Directors liable for company’s failures over employment rights

Posted: 15th May 2019   In: Business Employment, Individual Employment

Two company directors have been held personally liable for their company’s failures over minimum wage rates, holiday pay and overtime.

The case involved Lithuanian nationals who had come to the UK to work for DJ Houghton Catching Services Ltd as chicken catchers on farms.

Their employment was subject to the regulatory regime of the Gangmasters (Licensing) Act 2004. They alleged that they were employed by the company in an exploitative manner, commonly working extremely long hours and being paid less than the statutory minimum prescribed by the Agricultural Wages Act 1948 and the Agricultural Wages (England and Wales) Order 2012.

They contended that they were frequently not paid the sums recorded as being due to them on their pay slips, which had in any event been calculated on a fictional basis; payments were often withheld as a form of punishment; they were not paid holiday pay or overtime; deductions were unlawfully made for employment fees and rent; and one of the workers had not been permitted to take bereavement leave.

The court found in their favour. It held that the workers were all telling the truth. A gruelling and exploitative work regime had been imposed on them. It considered that two directors, Jacqueline Judge and Darrell Houghton, were both thoroughly unsatisfactory witnesses.

The evidence was overwhelming that they were operating the company in a deliberate and systemic manner, whereby chicken catchers were working massively more than the hours recorded on the payslips.

They operated a system of withholding wages for entirely invalid reasons and trapped workers had little option but to remain.

The general principle in law was that directors would be liable for the wrongdoings of a company committed at their direction.

In this case, both Judge and Houghton "actually realised" that what they were doing involved causing the company to breach its contractual obligations to the workers. They were therefore jointly liable with the company for the breaches of contract with the workers.

Compensation will be assessed at a separate hearing.

Please contact Sorcha Monaghan if you would like more information about the issues raised in this article or any aspect of employment law.

 

Posted by: Sorcha Monaghan
Employment
Luton Office