A statutory director has a company law relationship with the company and, in addition, an employment agreement or management agreement with the company.
What happens if the company wants to part ways with the statutory director?
First of all, the appointment decision and the articles of association are important. The articles of association usually state that the statutory director can be dismissed at any time. The general meeting of shareholders or the supervisory board is authorised to do so. The formal requirements for such dismissal, which follow from the law and the articles of association, must be followed carefully. But what does this mean for the employment agreement or management agreement with the statutory director?
The main rule is that the employment or engagement relationship also ends when the dismissal decision is taken. But from an employment law perspective, the company must have a sufficiently substantiated reason for dismissal. So, there must be a file concerning the underperformance of the statutory director, or the strained working relationship, or the difference of opinion between the statutory director and the shareholders about the management of the company. The company must also have considered whether redeployment of the statutory director is possible.
For an employment law dismissal of the statutory director, the company does not first have to go to the UWV or the sub-district court. However, there must be a sufficient ground for dismissal and the company law procedure must be followed carefully. Otherwise, the statutory director may still challenge the dismissal through the courts or claim fair compensation. Moreover, conducting proceedings in public between the statutory director and the company, or the shareholders, may be undesirable for the company’s reputation.
Dismissal of a statutory director is therefore a matter of balancing several different areas, which makes knowledge of company law and employment law essential. The lawyers at GMW lawyers have that expertise and will be happy to assist you. Please feel free to contact us.
GMW lawyers will be happy to help you with all your employment law issues. Our lawyers assist both employers and employees.
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