Claimant v Secretary of State for Business and Trade

Outcome

Facts

The claimants were married directors and joint shareholders of Top Drawer Components Limited, a furniture component manufacturer that became insolvent in May 2023. They had written statements of employment from 2015 stating hourly pay and working hours, but in reality worked far longer hours for below minimum wage pay, often forfeiting their salaries to pay other employees. They claimed statutory redundancy payments from the Secretary of State, which were refused on the basis that they were not employees. Unlike other workers in the business who had enforceable contracts with proper terms, the claimants exercised complete control over their work, pay and hours as directors.

Decision

The tribunal dismissed the claims, finding that the claimants were not employees or workers at the relevant time. Despite written statements of employment, the reality was that they worked as office holders and directors rather than employees. The lack of mutuality of obligation (irregular pay unrelated to hours worked), their ultimate control over the company, and their status as directors and shareholders all pointed away from employee status under Section 230 ERA 1996.

Practical note

Legal authorities cited