317: Company directors personally liable for exploitation of employees

In Antuzis and others v DJ Houghton Catching Services Ltd, the High Court has recently ruled that two directors were personally liable to pay aggravated damages to a number of migrant workers who had been exploited by the company.

This case was brought by a group of eleven Lithuanian employees who were contracted by DJ Houghton Catching Services to work as chicken catchers on farms. In 2019, the High Court ruled that the company was liable for various breaches of contract including non-payment or underpayment of minimum wage, holiday pay, and overtime; and punitive withholding of pay for alleged transgressions.  The two directors were also held to be personally liable for the tort of inducing the company to breach the claimants’ contracts of employment.

Assessment of the compensation payable to the employees took place recently at a separate High Court hearing. The employees were awarded the full amounts owed in relation to wages, overtime and holiday pay. Unusually, the directors were also ordered to pay aggravated damages amounting to 20% of this compensation. The Court found that simply awarding the contractual amounts would not compensate the employees for the exploitation, manipulation and abuse inflicted by the company and its directors, and the systematic denial of their statutory rights.

The facts and circumstances of this case are extreme, and directors who knowingly breach employment legislation to this extent are rare. However, this case illustrates that directors can be personally liable for the actions of a company as well as for breach of their statutory duties. It is also a rare example of how employees can use a tort claim to obtain compensation for breach of contract from the directors of their employing company and receive damages that exceed their actual financial loss.