The High Court has this week ordered two company directors to pay aggravated damages to a group of exploited migrant workers whose employer failed to pay them overtime, holiday pay and the applicable minimum wage for their work.

 

The claimants had been employed as chicken catchers by DJ Houghton Catching Services Ltd. They brought claims against the company for breach of contract relating to unpaid wages, unlawful deductions from wages and unpaid holiday pay. They also (somewhat unusually it might be said) claimed against the company directors for the tort of inducing the breaches of their employment contracts by the company - in an attempt to 'pierce the corporate veil'  that has long since protected the owners and directors of companies.  In 2019, the High Court upheld the claims and ordered the assessment of damages at a separate quantum trial. 

 

Following the quantum trial, the court awarded damages of the full amounts claimed by the employees for wages, overtime and holiday pay. However, since the claims against the directors were based in tort, the employees also asked the court to award 'aggravated' damages - essentially to award compensation in excess of the actual financial losses suffered. 

 

In this case, the court accepted that recovery of the monies due under the employment contracts would not compensate the employees for the exploitation, manipulation and abuse carried out by the employer and its directors that had been inflicted by the systematic denial of the employees' statutory rights. In respect of aggravated damages, the court therefore uplifted by 20% the damages (based on the actual financial losses suffered) awarded to the employees. 

 

This case is a very important example of how employees could use tort claims to seek redress for breach of contract or certain statutory rights from the directors of their employer and to achieve compensation exceeding their actual financial loss. However, the underlying facts of this case are extreme and the circumstances in which such a claim may be brought are therefore likely to be limited -  but directors of companies who knowingly breach their employment law obligations should nonetheless take heed and, particularly where they do no agree with the approach the company is taking, consider obtaining their own, independent legal advice.