The Claimant had been the sole shareholder and Managing Director of a
company from the date of its incorporation in 1991 until the day it
ceased trading in 2011. In the last 2 years of the company's trading,
the Claimant forfeited her salary so as to enable other employees and
creditors to be paid and, subsequent to the company's insolvency,
applied for a redundancy payment from the Insolvency Service.
The Tribunal received evidence to demonstrate that the Claimant had been
engaged by her company by means of an unexecuted contract of
employment, which set out a job description, stipulated working hours,
stated a salary, provided for eligibility for bonuses and made provision
for termination of the Claimant's contract of employment. The Claimant
was also able to provide P60s which showed that she had been paid by the
company (albeit in varying amounts, which fell below her contractual
entitlement) as an employee.
In dismissing the Secretary of State's appeal against the judgment in
the Claimant's favour, the EAT reiterated the point that whether or not
an individual is an employee of a company is a question of fact. As
such, it was not perverse of the Tribunal to find that: (i) the Claimant
was an employee of the company; (ii) there was no lack of mutuality or
of consideration, and; (iii) the Claimant had not discharged or varied
her contract of employment by not taking salary for the last 2 years.
The Claimant's entitlement to a redundancy payment of £7,296 from the
Insolvency Service would therefore stand.
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Daniel Barnett is a barrister at Outer Temple Chambers, with over 15 years' experience defending companies facing employment tribunal claims and associated commercial disputes. He is listed as a leading employment barrister in the ‘Legal 500′, and described in the Times Law Supplement as having “carved out a strong reputation”.
Daniel regularly advises and represents large and small businesses in discrimination claims, TUPE problems, team moves, removal of confidential business information, and unfair dismissal disputes. He has been appointed as employment law advisor to Acas since 2004, and is the author or co-author of seven legal textbooks.