What is involved here?
The employee in question has been employed since 1 August 2014. In early December, there was a transfer of shares, and on December 20, 2022, the employee was appointed as the CFO and statutory director. Since the share transfer, there has been a noticeable shift in the organization’s dynamics. The director is being criticized for not adapting well to these changes. On April 29, 2023, the resignation was proposed and approved during the AGM. The director disagrees and argues that there are no reasonable grounds for his dismissal. He therefore demands fair compensation. The employer, on the other hand, maintains that there are indeed valid reasons for the dismissal.
The court verdict
Both parties agree that the strategy shifted after the share transfer in December 2022. Both parties agree that the strategy shifted after the share transfer in December 2022. The Court has determined that this alone does not revoke the need for some time to implement these changes and for the directors to adjust to the evolving expectations of the shareholder. It is particularly crucial for the director, as outlined in the articles of association, to be informed that the shareholder is committed to these desired changes. The documents provided do not clearly demonstrate that the director was adequately informed about the specific changes expected of them and the timeline for implementation, and that this was not optional. As a result, the request for fair compensation is approved.
Conclusion
A director, as specified in the articles of association, must also receive adequate notice regarding the changes desired by the AGM and be provided with sufficient time to implement these changes. Failure to do so may result in a determination of termination without reasonable cause, entitling the director to fair compensation.