Claimant v SMS Farming Limited
Outcome
Individual claims
The tribunal found that the claimants were neither employees nor workers of the respondent. They were shareholders/directors operating within a quasi-partnership family business without the necessary control, mutuality of obligation, or personal service required for employment or worker status. Therefore, they had no standing to bring unfair dismissal claims.
The claim for failure to provide notice pay failed because the tribunal concluded there was no contract of employment. The claimants worked as shareholders and directors in a family business structured as a quasi-partnership, not as employees entitled to notice.
The claim for failure to provide statement of employment particulars failed because no employment relationship existed. The tribunal found the claimants were not employees or workers but rather shareholder-directors in an informally managed family farming business.
The breach of maximum weekly working time claim failed due to lack of worker or employee status. The tribunal found the respondent exercised no control over the claimants' working hours, and the claimants determined their own work patterns as shareholders/directors.
The claim for failure to provide annual leave or holiday pay failed because the claimants were found not to be workers or employees. They took holidays at their own discretion based on farm needs, not under any employment arrangement requiring employer approval.
The failure to pay national minimum wage claim failed as the claimants lacked worker or employee status. The tribunal found their weekly payments were more akin to directors' drawings than employment wages, unconnected to actual hours worked.
The unlawful deductions from wages claim failed because no employment relationship existed. The tribunal concluded the payments made were directors' drawings in a quasi-partnership arrangement, not wages from which deductions could be unlawfully made.
Facts
The claimants, a married couple, were shareholders and directors in a family farming business. Richard owned 25% of the company and worked long hours on practical farm work; Julie developed a direct meat selling business. Both received modest weekly payments (£350 and £300 respectively) that bore no relation to hours worked. The family operated the business informally as a quasi-partnership. Following a breakdown in family relations in 2023, the respondent purported to terminate their 'employment', leading to this tribunal claim and concurrent High Court litigation.
Decision
The tribunal found that the claimants were neither employees nor workers of the respondent. The respondent exercised no control over their work, both could provide substitutes, payments were more akin to directors' drawings than wages, and there was no intention to create an employment relationship. All claims requiring employee or worker status were therefore dismissed.
Practical note
Shareholders/directors in family businesses structured as quasi-partnerships are unlikely to be found to be employees or workers even if they perform significant work and receive regular payments, particularly where control and personal service obligations are absent.
Legal authorities cited
Statutes
Case details
- Case number
- 3315216/2023
- Decision date
- 28 February 2025
- Hearing type
- preliminary
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- agriculture
- Represented
- Yes
- Rep type
- barrister
Employment details
- Role
- Farm work and business development
Claimant representation
- Represented
- Yes
- Rep type
- barrister