Claimant:
Chassy

Respondent:
Left Shift IT Ltd & Others

High Court action was successful for breach of contract when employees were not paid by their employer due to financial difficulties. The action, however, was only successful against the company and not personally against the directors.

The claimant brought a claim against his former employer (the company) as well as against two company directors in that they were liable for procuring the breaches of the company.   The issue is that the company ran into financial difficulties. Problems with non-payment began in 2017. At the time, the directors did not take any salary and they tried unsuccessfully to raise the funds. The claimant and others resigned in April 2019.

Following their resignation in 2019 the claimant and others brought Tribunal proceedings in which it was concluded that they had been constructively and unfairly dismissed and awarded compensation.  Following that the claimant brought proceedings in his own right to recover sums due under a claim for breach of contract.

The High Court upheld the claim against the first defendant (the company). The amounts unpaid were calculated as being £236,601.91 which included figures for pension contributions, expenses and holiday pay.  The High Court held that the right for a worker to complain to the Tribunal in the event that there had been a deduction did not affect the common law position as it applies to waiver in a breach of contract claim. Although the claimant had continued to work without the payments being met in full they were not found to have given up their rights to payment.  It was not that they were waiving or promising to the employer not to require the proper payments.

A second point arising was the personal liability of the directors. The issue was whether they had acted properly in the interests of the company and to promote its success. From the evidence, it was determined that the directors did want the company to succeed and had an active interest in it succeeding. Therefore, bearing in mind the separation between the company and its directors, it was found that there was no personal liability for the directors.

Whilst the vast majority of these reviews focus on Tribunal actions, this demonstrates the fact that the common law rights relating to breach of contract exist and can be taken in the court system as evidenced with the High Court action here for failure to pay an employee’s salary.  It is also of note that the continued working of an employee when they have not been being paid either in full or at all did not constitute a waiver which meant that the claim could still be brought.

You can read the case in full here:
https://www.bailii.org/ew/cases/EWHC/KB/2025/225.html