A kitchen worker at a restaurant resigned after not being paid his rights. The employee demanded that the company shareholders pay his rights personally by piercing the corporate veil as they are engaged in operating restaurants through the serial establishment of companies, liquidating them and changing the names of the restaurants to avoid debts.
The Court rejected the employee's claim and held that there is no justification for piercing the corporate veil or attributing personal liabilities to the shareholders. A company has a separate legal entity from its owners. Piercing the corporate veil means ignoring the legal personality of the company and establishing a direct legal relationship between a third party and the company shareholders. Personal liability means the imposition of contractual or tort liability on an organ of the company (such as: a manager), personally, due to its actions. Piercing the corporate veil or attributing personal liability to an organ of the company will only be done in exceptional cases, inter alia, when the corporate veil is misused. Here, the restaurant manager (who is also one of the shareholders) exercised normal and routine management powers, as is customary in a restaurant-type business - setting shifts, giving instructions in the kitchen, distributing paychecks and salaries to employees and did not perform additional actions (such as: establishing serial companies). The other shareholder did reopen the restaurant under a new commercial name, after the previous restaurant that operated at the same location collapsed financially due to the Covid19 epidemic. The fact that the company ran into financial difficulties shortly after the outbreak of the Covid19 epidemic, like many other businesses in the field of catering, and the fact that the shareholder was unable to rehabilitate it financially (when most of his businesses did manage to survive the Corona crisis and the 07.10.24 events), cannot in any way constitute sufficient reason for piercing the corporate veil. The management of the companies is done in the normal course of business and there is no abuse of the corporate veil, therefore the shareholders should not be held personally liable.