Mr P Willie v AKA Electrical Services Ltd (in creditors’ voluntary liquidation) and 1 other — 2023

The claimant, sole director and 50% shareholder of AKA Electrical Services Ltd, sought redundancy pay and compensatory notice pay from the National Insurance Fund after the company entered creditors' voluntary liquidation. The Secretary of State rejected the application on the basis that he was not an employee of the company within section 230 ERA, and the tribunal treated that as the only issue to decide.

The tribunal found factors pointing towards employment, including mutuality of obligation, personal service, payment described as wages, PAYE deductions, payslips, P60s and pension contributions. It also found, however, that there was no written contract, service agreement, statement of particulars or board memorandum for the claimant, despite other employees having written employment contracts.

On balance, the tribunal concluded that the arrangements were not consistent with a contract of service. It relied on the absence of apparent intention to create an employment contract, the claimant's control over holidays, sickness, discipline and grievance matters, the contrast with other employees, the non-compliance with the National Minimum Wage for the claimant's wages, and the nature and origin of his remuneration through salary and dividends. The claimant was therefore not an employee at the date of insolvency and the claim was dismissed.