In the business world, compliance with the collective labor agreement (CAO) is a crucial responsibility. Not only does this contribute to a level playing field between companies, but it also ensures a fair working environment. Failing to comply with it can have serious consequences for those involved. Recently, a case in the private security sector put the spotlight on two directors who deliberately refused to comply with the applicable CAO. The result: personal liability of the directors for the damages.
Case.
On 24 November 2023, the Rotterdam District Court ruled in a case in which two directors – both their private limited company and personally – were summoned by the Stichting Sociaal Fonds Particuliere Beveiliging (Private Security Social Fund Foundation). This foundation supervises compliance with the relevant CAO in the private security sector and in turn derives its powers from the SFPB CAO. In that regard, it had requested the directors of the security company to supply essential documents for review. The security company had already previously received a negative assessment from the foundation, which is why the foundation felt the need to carry out such a review at the security company.
The directors, on the other hand, did not really see the need for the review and responded to the foundation as follows: “Thanks for your feedback, I must unfortunately inform you that there is no time to cooperate with this review; that so-called fine you’re talking about, you can go ahead and pursue it, it can just join the queue. Good luck!!”
The foundation did not let it rest, went to the subdistrict court and claimed compliance with the CAO by the security company, as well as a joint and several order against the directors to pay a fixed damages amount equal to 1% of the wage bill for the premium year. Under the SFPB CAO, this fine was the sanction for failing to submit the documents and information on time.
Personal liability of directors.
The subdistrict court granted the foundation’s claims on all fronts. The security company fell within the scope of the CAO and was therefore obliged to cooperate with the foundation’s review. The directors therefore had to personally and jointly pay damages of €18,000 to the foundation.
In principle, a director is not personally liable for the debts of a BV (private limited company), but this does not apply if a serious personal reproach can be made against them. This depends on the nature and severity of the breach of the standard and the other circumstances of the case. In this case, the subdistrict court ruled that the indirect directors, given their total lack of cooperation with the review, had acted in a seriously reproachable manner and therefore had to personally bear the damages. The directors’ argument that the review was “not a priority” was not accepted by the subdistrict court as a valid excuse.
Conclusion.
This ruling shows once again that compliance with a generally binding CAO is not a matter of “priority,” but an essential mandatory part of entrepreneurship. Deliberately failing to comply can prove costly for your company – and in some cases personally as well.
If in doubt, always have it checked whether a generally binding CAO applies to your company. The solution is then to have a scope investigation carried out. The lawyers at The Legal Company are experienced in this type of investigation and can help you with it. Contact us directly via info@thelegalcompany.nl or call 020 345 0152.
Nothing is as changeable as legislation and regulation. Please note that our blogs may no longer align with current legislation and regulations and may therefore be outdated. If you have questions or a problem relating to this blog, or if you require legal assistance, please contact us.
