Claimant v Steve Webb Models Limited (In Creditors Voluntary Liquidation)
Outcome
Individual claims
The tribunal found that the claimant was not an employee of the first respondent at the time of liquidation. She was a 50% shareholder and director, not under anyone else's control or supervision, with no mutuality of obligations, no written employment contract despite having organised 11 such contracts for other employees, and had taken financial risk by investing £5,000 in the business. The factors pointed overwhelmingly to her being a director rather than an employee.
Facts
The claimant worked in a specialist model shop business from 1993, becoming equal partner shortly after joining and a 50% shareholder/director when the partnership converted to a limited company in 2003. She worked alongside her brother who owned the other 50%. She received monthly wages below national minimum wage plus dividends on accountant's advice. The business employed 11 other staff for whom she organised employment contracts, but never arranged one for herself. The company entered creditors voluntary liquidation in November 2024 after substantial theft by an employee. She claimed redundancy payment from the National Insurance Fund which was rejected.
Decision
The tribunal found the claimant was not an employee at the time of liquidation. Key factors were: she was a 50% shareholder who invested £5,000 taking financial risk; she was not under anyone's control or supervision and made final decisions with her brother; there was no mutuality of obligations; and crucially she had organised 11 employment contracts for other staff but deliberately chose not to have one herself, believing she had more rights without it. The claim against the Secretary of State failed.
Practical note
A shareholder-director who exercises control over a business, takes financial risk, has no written employment contract despite arranging them for subordinate staff, and is not subject to supervision will not be found to be an employee for the purposes of claiming from the National Insurance Fund on insolvency.
Legal authorities cited
Statutes
Case details
- Case number
- 6023011/2024
- Decision date
- 7 May 2025
- Hearing type
- preliminary
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- retail
- Represented
- No
Employment details
- Role
- Director/Sales Assistant
- Service
- 32 years
Claimant representation
- Represented
- No