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High Court finds that directors can be liable for breach of employment contract

Most directors of companies don’t expect to be held personally liable for inducing the employer to breach an employee’s contract of employment. However, this only goes so far and the recent case of Antuzis & Ors v. DJ Houghton Catching Services Ltd & Ors [2019] EWHC 843 (QB) clearly shows the limits of that protection. In this case, the High Court concluded that Mr Houghton (director) and Ms Judge (company secretary) were personally liable for the company’s breaches of contract. The “breaches of contract” included statutory claims, in particular in relation to unpaid wages, unlawful deductions and fees and lack of holiday pay.

The Lithuanian claimants were employed in the UK by DJ Houghton Chicken Catching Services (the company) to work at various farms across the UK as chicken catchers. Their working conditions were dreadful. They worked long hours, being deprived of sleep and toilet breaks. They were paid less than minimum wage and often had pay withheld or docked for unknown reasons. No attempt was made to pay their holiday pay or overtime and they were prevented from taking holidays and bereavement leave.

The High Court applied the long established principle in Said v. Butt [1920], which states that a director is not ordinarily personally liable for inducing breach of contract where the director acts “bona fide within the scope of his authority”.

The court concluded that Mr Houghton and Ms Judge were not acting bona fide. They knew that their actions amounted to a clear breach of their duties under section 172 (duty to promote the success of the company) and section 174 (duty to exercise reasonable care, skill and diligence) of the Companies Act 2006. It was held that “what they did was not in the best interests of the company or its employees. On the contrary (…) they wrecked its reputation in the eyes of the community.” It was found beyond doubt that they did not believe that the employees’ remuneration arrangements were lawful and were therefore personally liable for the breaches of contract.

The case is a useful reminder that, whilst the company can indemnify directors against third party claims and purchase insurance to limit the risks associated with carrying out director duties, there are still situations where personal liability cannot be excluded. It is also another example of individuals being personally liable for their actions towards employees (see also our previous article regarding personal liability for subjecting employees to the detriment of dismissal arising from making a protected disclosure, available here. This case demonstrates that it can be impossible to avoid being caught for bad behaviour!

High Court finds that directors can be liable for breach of employment contract

EAT judgment provides guidance on making reasonable adjustments for disabled employees

In the recent case of Linsley v. Commissioners for Her Majesty's Revenue and Custom UKEAT/0150/18 the Employment Appeal Tribunal (EAT) gave guidance on factors to be taken into account in deciding whether an adjustment is reasonable.

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EAT judgment provides guidance on making reasonable adjustments for disabled employees

Vento bands increase

In addition to financial compensation, an “injury to feelings” award is available in discrimination and certain whistleblowing claims.

The level of any injury to feelings award is assessed by reference to guidelines that are commonly referred to as the “Vento bands” (taking their name from a Court of Appeal case which initially considered this approach).

The Presidents of the Employment Tribunals in England and Wales and Scotland have issued an update to the Vento guidelines, setting out the following new bands as adjusted for inflation:

  • Lower band: £900 to £8,800 (less serious cases).
  • Middle band: £8,800 to £26,300 (cases that do no merit an award in the upper band).
  • Upper band: £26,300 to £44,000 (the most serious cases, with exceptional cases capable of exceeding £44,000).

These updated figures apply to cases presented on or after 6 April 2019, and follow hot on the heels of the annual increase to statutory minimum wage rates and other statutory changes – you can find our previous blog post covering these changes here.

Vento bands increase

Adverse treatment of a gay head teacher found to be constructive dismissal and sexual orientation discrimination

In The Governing Body of Tywyn Primary v. Mr M Aplin UKEAT/0298/17/LA the EAT held that the adverse treatment of a gay head teacher amounted to constructive dismissal and sexual orientation discrimination.
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Adverse treatment of a gay head teacher found to be constructive dismissal and sexual orientation discrimination

Acas publishes guidance on workplace neurodiversity

Acas has published guidance to help employers learn about neurodiversity and to suggest changes that can be made in the workplace to better support neurodivergent staff.
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Acas publishes guidance on workplace neurodiversity

Companies to tackle sexual harassment with new #MeToo app

In order to investigate claims of sexual harassment and ensure employees are adequately protected, some companies are seeking innovative ways to try to improve their workplace culture. Recently this has included investing in #MeToo apps. These apps are intended to allow employees to discreetly report instances of sexual harassment.
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Companies to tackle sexual harassment with new #MeToo app

Disability discrimination: EAT clarifies definition of “long-term” disability

In Nissa v. Waverly Education Foundation, the Employment Appeal Tribunal (EAT) clarified the definition of "disability" under the Equality Act 2010.
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Disability discrimination: EAT clarifies definition of “long-term” disability

No discrimination if dismissal based on religious beliefs of employer

In Gan Menachem Hendon Ltd -v- de Groen,the Employment Appeal Tribunal (EAT) held that dismissing an employee, who refused to lie about living with her boyfriend, from a nursery that ran in accordance with ultra-orthodox Jewish values did not amount to discrimination on the grounds of religion or belief.
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No discrimination if dismissal based on religious beliefs of employer

New Acas age discrimination guidance

Acas has published new guidance on age discrimination at work, which can be found here. According to Acas, age discrimination is one of the most common forms of unfair treatment at work. Both younger and older employees across the UK experience discrimination based on their age. The guidance aims to support employers in preventing unfair treatment at work and eradicating bias against older and younger workers.
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New Acas age discrimination guidance

Constructive knowledge of disability: when should employers reasonably know of an employee’s disability?

In the recent case of Lamb v. The Garrard Academy the Employment Appeal Tribunal (EAT) considered at what point employers have a duty to make reasonable adjustments under the Equality Act 2010 (the Act).
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Constructive knowledge of disability: when should employers reasonably know of an employee’s disability?