Publication date: 27 March 2017
Employees can be liable for the debts of the company when they were too much involved in the policy making of the company. When will they be in the “danger zone”?
Directors of a company can be jointly and severally liable for the debts of the company in the event of bankruptcy. For this, there must be maladministration and it must be plausible that this is an essential cause for the bankruptcy. Employees who interfere too much with the company’s policy can be considered as actual policymakers. In this case, they can be held liable. In what circumstances can an employee be considered an actual policymaker?
It is not easy to determine when an employer can be considered as an actual policymaker. For the assessment, the court will consider, among other things, the following:
An employee acting within the scope of his authority and not engaging in executive tasks cannot be held liable easily. However, if the employee goes beyond the scope of his authority, he or she will be in the “danger zone”.
Are you or your employees being held liable? Would you like to know what to do and how to prevent this? Or would you like to make claims on a bankrupt company, its directors, or employees? Please contact us:
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