Haleem Fazal Respondents (1) The Secretary of State for Business, Energy & Industrial Strategy (2) FH7 Limited – in Liquidation v Respondent — 2023

The tribunal held that Mr Haleem Fazal was an employee of FH7 Ltd for the purposes of the insolvency redundancy provisions. Although there was no written contract, it found that he worked a fixed 40-hour week, was paid a regular salary of £1,002 net through PAYE, had P60s, payslips and pension contributions, and treated company money as business money rather than as his own. It found that the work was done for the company and that there was no evidence of substitution in his role as an employee.

Applying Ready Mixed Concrete, Autoclenz, Nethermere, and the shareholder/director authorities including Neufeld and Clark, the tribunal accepted that several features pointed away from employment, including the absence of a written contract, some payment irregularities, the fact that he was a 50% and later 100% shareholder, and that the pay was below the national minimum wage. However, it found that the overall conduct of the parties was consistent with a contract of service. It therefore held that his employment started on 13 April 2018 and ended by reason of redundancy on 30 April 2021, with 3 years' service and age 48 at dismissal.

For remedy, the tribunal applied Paggetti v Cobb and used the national minimum wage to calculate a weekly pay figure of £356.40, which produced a statutory redundancy payment of £1,603.80. It also found that holiday pay, notice pay and arrears of pay had been calculated on the evidence, including holiday at £1,161.84 for 16.3 days, notice at £1,069.20, and arrears figures of £1,577.42 and £1,295.54, but it held those claims were out of time because the Secretary of State's rejection was communicated on 2 November 2021 and the ET1 was presented on 11 February 2022. The tribunal said there was no evidence making it not reasonably practicable to present those claims within the time limit, so it had no jurisdiction over them.