Antuzis v DJ Houghton Catching Services Ltd [2019] EWHC 843 (QB)

Lithuanian chicken catchers brought claims against their employer company and its directors for systematic exploitation including underpayment below agricultural minimum wage, unlawful deductions for employment fees and accommodation, and failure to pay holiday pay. The court granted summary judgment for claimants and held directors personally liable for inducing breaches of contract.

Facts

The claimants were Lithuanian nationals employed by DJ Houghton Catching Services Ltd (D1) to catch chickens at various farms. D1 was controlled by its sole director and shareholder Darrell Houghton (D3) and company secretary Jacqueline Judge (D2). The claimants alleged systematic exploitation including working extremely long hours (sometimes over 100 hours per week), being paid below the statutory agricultural minimum wage, having unlawful deductions made for employment fees (paid to an individual named Edikas) and accommodation, receiving no holiday pay, and having wages withheld as punishment.

The payroll system operated by D1 was entirely fictional – chicken catchers were paid piece rates based on chickens caught, but payslips showed notional hours calculated by dividing total pay by the minimum wage rate, bearing no relation to actual hours worked. No records of actual working hours were kept. D1’s gangmaster licence was revoked in 2012 following a GLA inspection which scored 266 points (30 points constituting failure).

Issues

Summary Judgment Application

Whether the claimants were entitled to summary judgment against D1 for breaches of contract relating to underpayment of minimum wages, unlawful employment fees, accommodation fee deductions, unpaid wages, and holiday pay.

Preliminary Issue

Whether D2 and D3 were personally, jointly and/or severally liable to the claimants for D1’s breaches of contract, applying the rule in Said v Butt regarding director liability for inducing breach of contract.

Judgment

Lane J found overwhelmingly in favour of the claimants on all issues. The evidence demonstrated a deliberate and systematic exploitation of workers.

Credibility Findings

The judge found the claimants’ witnesses calm, measured and credible. By contrast, D3 was described as:

“a thoroughly unsatisfactory witness”

D2 was similarly found to be:

“a thoroughly unsatisfactory witness”

The judge concluded that both D2 and D3 were prepared to say anything to serve their purpose, demonstrated blatant contradictions in their evidence, and unsuccessfully attempted to blame professionals they had employed.

Summary Judgment

Summary judgment was granted on all heads of claim. The fictional payroll system was designed to conceal systematic underpayment. Employment fees of £250-£350 were systematically deducted. Accommodation charges of £40 per week exceeded lawful limits. Wages were withheld as punishment. No holiday pay was provided to chicken catchers.

Personal Liability of Directors

Applying the rule in Said v Butt and OBG Ltd v Allan, the judge found that D2 and D3 were not acting bona fide vis-à-vis D1. Their conduct breached sections 172 and 174 of the Companies Act 2006, failing to promote the company’s success and disregarding employees’ interests. The judge stated:

“I have no hesitation in finding that both D2 and D3 satisfy the requirements laid out by Lord Hoffmann. I am in no doubt whatsoever, having heard the evidence, that both of them ‘actually realised’ that what they were doing involved causing D1 to breach its contractual obligations towards the claimants.”

Implications

This case is significant for establishing that company directors can be held personally liable for inducing breaches of employment contracts where they do not act bona fide towards the company. The statutory nature of minimum wage and employment protections informs whether directors have breached their duties to the company. Directors cannot hide behind the corporate veil when deliberately causing exploitation of vulnerable workers that ultimately destroys the company’s reputation and business.

Verdict: Summary judgment granted in favour of all claimants against D1 on all heads of claim (underpayment of wages, employment fees, accommodation fees, unpaid wages, holiday pay), with quantification to be determined at assessment of damages hearing. Judgment on preliminary issue entered in favour of claimants: D2 and D3 held jointly and severally liable to claimants for inducing D1’s breaches of contract.

Source: Antuzis v DJ Houghton Catching Services Ltd [2019] EWHC 843 (QB)