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Position of a statutory director
The position of a statutory director
The position of a statutory director in a company is unique within Dutch employment law. Although a statutory director is often both employee and director, his legal position differs from that of an ‘normal’ employee. This special position has major consequences, especially when there is a legal dispute, such as a dismissal procedure. In such cases, it is crucial to engage an employment attorney who specialises in the complex rules and risks involved in the position of a statutory director.
The dual role of a statutory director
A statutory director holds a dual role within the company. On the one hand, he is the formal director of the company and thus charged with managing the organisation. On the other hand, the statutory director often also has an employment contract with the company. This puts him in a special position where both company law and employment law come into play.
The main legal rule governing this duality is that the appointment and dismissal of a statutory director is through the General Meeting of Shareholders (AGM). This means that a director is in fact in an employment relationship with the company, but the employment law protection against dismissal is much less far-reaching than for an ‘normal employee’.
Dismissal of a statutory director
The dismissal of a statutory director can be relatively straightforward via a resolution of the AGM. As a rule, this resolution immediately terminates the director’s corporate law position. However, the employment-law aspects of the dismissal often become the subject of discussion.
Important aspects when dismissing a statutory director include:
- Direct termination of directorship: a resolution of the AGM leads directly to the end of the directorship. Unlike a normal employee, no prior permission from the UWV or subdistrict court is required.
- Little employment protection: the fact that a statutory director can be dismissed on the basis of an AGM resolution automatically means that the employment contract also ends immediately, unless there are agreements to the contrary.
- Fair compensation: If there has been a wrongful dismissal, for example if there were no reasonable grounds for dismissal, the director can claim fair compensation.
- Compensation and severance arrangements: A statutory director may be entitled to specific arrangements in his employment contract, such as bonuses, exit arrangements, or other contractual compensation. These should be carefully evaluated in the event of a dismissal.
Why involve an attorney?
The special position of the statutory director requires expert legal assistance. The dismissal or other disputes can have far-reaching consequences, both financial and reputational. Here are some reasons why it is essential to hire an employment attorney:
- Complexity of the legal position: employment law and company law intertwine in the position of the statutory director. I can help navigate the legal complications and ensure that your rights are fully protected.
- Negotiating severance payments: I can negotiate fair compensation on behalf of the director, such as transitional compensation, equitable compensation, or other contractual arrangements that may apply.
- Litigation support in legal disputes: if a dispute arises over the legality of dismissal, I can represent you in employment law proceedings.
Conclusion
The position of the statutory director in Dutch employment law is complex and requires specialised knowledge of both employment law and company law. In legal disputes, such as dismissal proceedings, it is crucial to engage an experienced employment attorney. The attorney can assist you in protecting your rights, minimising risks, and negotiating fair compensation and conditions.
The information on this page is for informational purposes only and should not be considered specific legal advice. For personalized advice, please contact Ok Legal. Please note that the content of this page may change without notice and Ok Legal is not liable for any inaccuracies and/or missing information.
