Mr M Green v The Insolvency Service and 1 other — 2024

The Claimant sought payment from the National Insurance Fund under sections 166 and 182 of the Employment Rights Act 1996 for redundancy pay, notice pay, and holiday pay following the creditors' voluntary liquidation of Green Gem Financial Limited on 25 November 2022. The Claimant had been the sole director and 100% shareholder of the Company since 2004 and described himself as an employee. The Secretary of State for Business and Trade had rejected the application on the basis that the Claimant was not an employee within the meaning of section 230 ERA.

The sole issue for the Tribunal was whether the Claimant was an employee within section 230 ERA at the date of insolvency. The Tribunal considered the Claimant's degree of control over his own work, remuneration and status, the absence of a meaningful substitution arrangement in practice, the lack of procedures for recording hours or holiday, and the fact that the Claimant arranged his remuneration to take optimal advantage of tax thresholds and could have changed his self-designation at any time. The Tribunal found the facts finely balanced but concluded the circumstances pointed away from an employment relationship.

The Tribunal held that the Claimant was not an employee of the Company within the meaning of section 230 ERA at the date of the Company's insolvency, that the Respondent had no liability to the Claimant under Part XII ERA 1996, and that the claims were not well founded and did not succeed.