Legal Updates

Non-transfer of employee’s pension provisions constitute grounds for lifting the corporate veil

September 13, 2016

A service provider that was proven to be an employee filed a personal claim against the company’s shareholder for payment of employee’s rights.

The Court held that employees have a special status for the purpose of examining the justification for piercing the corporate veil and the ability to pierce the veil was extended to cases where the employer deducts the part of the employee’s salary for pension but did not transfer it to the pension fund, as in the present case. Such conduct constitutes misappropriation of employee’s funds and an offence that justify piercing the corporate veil and holding the shareholder personally liable.