Claimant v Dyke Alehouse Limited
Outcome
Individual claims
The tribunal found the claimant was neither an employee nor a worker within the meaning of s.230 ERA 1996, but a self-employed contractor engaged in a business partnership arrangement. As a director and 20% shareholder compensated through equity and profit-sharing, he lacked the requisite employment status to bring the claim. Accordingly, the tribunal had no jurisdiction and the claim was dismissed.
The tribunal found the claimant was neither an employee nor a worker within the meaning of s.230 ERA 1996. He was engaged as a self-employed contractor with no formal holiday arrangements and failed to provide sufficient evidence of the number of holiday days owed. The tribunal had no jurisdiction to hear the claim and it was dismissed.
Facts
The claimant was appointed as a director and 20% shareholder of a pub company in December 2023. Under a Partnership Agreement, he worked for four months without pay in exchange for his shareholding, then received £2,500 per month plus profit share. He submitted invoices for payment and was paid gross without PAYE or NI deductions. He had significant autonomy over day-to-day operations and shared decision-making with the majority shareholder. The relationship ended in May 2024, and he claimed unpaid wages and holiday pay.
Decision
The tribunal found the claimant was neither an employee nor a worker within the meaning of s.230 ERA 1996. The Partnership Agreement, absence of a written employment contract, profit-sharing and equity compensation, lack of control by the respondent, invoicing practice, and significant autonomy all pointed to a self-employed contractor relationship. The tribunal had no jurisdiction to hear the claims and they were dismissed.
Practical note
A director-shareholder who receives equity compensation, shares profits, submits invoices, exercises significant autonomy, and has no written employment contract will likely be found to be self-employed rather than an employee or worker, even if they receive regular monthly payments.
Legal authorities cited
Statutes
Case details
- Case number
- 6007243/2024
- Decision date
- 8 February 2025
- Hearing type
- preliminary
- Hearing days
- 1
- Classification
- contested
Respondent
- Sector
- hospitality
- Represented
- Yes
- Rep type
- barrister
Employment details
- Role
- General Manager/Chef
- Salary band
- £30,000–£40,000
- Service
- 6 months
Claimant representation
- Represented
- No