Mr G Preston v Supawarm Limited (in Voluntary Liquidation) and 1 other — 2023

Mr G Preston was a statutory director and shareholder of Supawarm Limited and said that he had also been an employee from 6 February 2003 to 30 June 2022. After the company entered creditors voluntary liquidation on 18 August 2022, he applied to the Insolvency Service for a redundancy payment. At the hearing, the parties agreed that the only issue to be decided was whether he was an employee within section 230 of the Employment Rights Act 1996. If that issue had been decided in his favour, there would have been a further hearing on the amount of any redundancy payment and holiday pay.

The tribunal found that the business had originally operated as a partnership between the claimant and Mr Glyn Cory and was incorporated in 2003. It found that the claimant and Mr Cory owned and ran the business together, had no written contract, and were in sole control of its operations and future. The claimant worked in the business as a plumber and heating engineer, but there were no fixed hours, no evidence of supervision, no disciplinary procedure, and no evidence that the respondent had power to dismiss him. He was paid £400 a week each plus a monthly payment of £700, although the precise arrangements changed over time, and he also received dividends. The tribunal noted that no tax or employee National Insurance Contributions were deducted from the PAYE sums, that he could take holiday without asking permission, and that he and Mr Cory each contributed £3,500 of their own money when the company needed to pay an HMRC tax bill.

Applying the Ready Mixed Concrete factors, and the authorities on employee status that it cited, the tribunal held that the claimant's work was not subject to sufficient control by the respondent and that the remuneration arrangements were consistent with him not being an employee. It accepted that there was some mutuality of obligation and that he personally carried out work in the business, but found that the overall relationship was not one of master and servant and that he had a substantial degree of autonomy as an owner-manager. On that basis, the tribunal concluded that he was not an employee of the first respondent and dismissed the claim.