Case 1405175/2023 · Employment Tribunal
- IN PERSON FOR THE v Respondent — 2024
- Case reference
- 1405175/2023
- Decision date
- 10 May 2024
- Jurisdiction
- England & Wales
- Judge
- Employment Judge Cadney Dated
Parties
1 namedClaimant
- IN PERSON FOR THE
Respondent
- —
Key findings
Tribunal's reasoningThe claimant brought claims against Robert W Lynn Ltd (R2), of which he was the sole shareholder and director, for a statutory redundancy payment, notice pay, unpaid wages and unpaid holiday pay, and sought payment of those sums from the Secretary of State (R1) out of the National Insurance Fund under s166/182 of the Employment Rights Act 1996 following R2's insolvency. The Secretary of State accepted that R2 was insolvent but disputed that the claimant was an employee within the meaning of s230 ERA 1996. The parties agreed that the tribunal would determine the employment status question in principle, with quantum to follow if necessary.
The tribunal found that the claimant had been paid via PAYE at or about the income tax/NI threshold on his accountant's advice, drew further sums from a Director's Loan Account, was the sole shareholder, sole director and sole employee, had no written contract of employment, was consistently paid below the national minimum wage (average hourly pay of GBP 5.09 in his last year), chose not to pay himself for the last two months before insolvency, and had put GBP 18,700 of his own funds into the company since June 2022. The tribunal accepted that the PAYE arrangement was genuine and not a sham and that personal service and mutuality of obligation were present, and acknowledged that the necessarily artificial nature of control in a one-man company is not in itself fatal to employment status.
Looking at the arrangement as it operated in practice, and in particular at the date of insolvency, the tribunal concluded that the absence of a written contract, the absence of any real control, the acceptance of pay below the national minimum wage, and the claimant's decision to accept non-payment of salary for the final two months together meant the contract was not a genuine contract of employment within s230 ERA 1996. The claimant was therefore not an employee at the date of insolvency, the Secretary of State was not liable under s166/182, and the claims were dismissed.
Claims and outcomes
4 findings recorded| Claim type | Issue or finding | Outcome | Protected characteristic | Award |
|---|---|---|---|---|
| Redundancy | Claim against the Secretary of State (R1) under s166/182 ERA 1996 for a statutory redundancy payment from the National Insurance Fund following R2's insolvency. Dismissed because the tribunal found the claimant was not an employee within the meaning of s230 ERA 1996 at the date of insolvency. | Dismissed | — | — |
| Breach of contract | Notice pay claim against R1 under s182/184 ERA 1996 dismissed for the same reason: the claimant was not an employee within s230 ERA 1996. | Dismissed | — | — |
| Unlawful deduction from wages | Unpaid wages (last two months' salary) claim against R1 under s182/184 ERA 1996 dismissed because the claimant was not an employee within s230 ERA 1996. | Dismissed | — | — |
| Holiday pay | Unpaid accrued holiday pay claim against R1 under s182/184 ERA 1996 dismissed because the claimant was not an employee within s230 ERA 1996. | Dismissed | — | — |
Legal tests applied
7 references- s230 Employment Rights Act 1996
- s166 Employment Rights Act 1996
- s182 Employment Rights Act 1996
- s184 Employment Rights Act 1996
- Secretary of State for Trade and Industry v Bottrill
- Clark v Clark Construction Initiatives Ltd
- irreducible minimum of personal service, mutuality of obligation and control
Official outcome judgment PDF
Gov.uk primary recordThe official judgment PDF on gov.uk contains the tribunal's outcome, reasoning, and any remedy details. Where this page does not yet show extracted outcomes for every claim, use the PDF as the authoritative source.
Published on gov.uk under the Open Government Licence v3.0.
How we got this data
Case essentials (reference, date, judge, venue, country, claim categories) are extracted from the structured metadata gov.uk publishes alongside each decision. Parties and monetary figures are extracted from the judgment PDF text. Key findings and per-claim outcomes require a second extraction pass that is not yet complete for this case — until then, the primary source linked above is the authoritative record. See full methodology.
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