Appointment and dismissal of statutory directors

The statutory director occupies a special position under employment law. This is because the statutory director has a dual legal relationship. This means that there is both an employment law relationship (employment contract) and a company law relationship between the company and the director. A statutory director may therefore work for the company either on the basis of an employment contract or on the basis of a contract for services (management contract).

Should the company wish to sever its ties with a statutory director, both types of relationship will have to be terminated. This makes terminating such a relationship a complex matter. A statutory director finds themselves in a special situation, and not merely because of their position under employment law. The liability rules for directors also differ from those applicable to ordinary employees.