(1) Stephen Linnecar (2) Claire Linnecar v Creative Kingdom Books Ltd - in Liquidation and 1 other — 2024

The claimants, Stephen and Claire Linnecar, sought payments from the National Insurance Fund after Creative Kingdom Books Ltd went into voluntary liquidation on 21 September 2023. The sole issue before Employment Judge J S Burns was whether they were employees of the company when it entered liquidation. The tribunal dismissed the claims against both respondents.

The tribunal found that the company was set up by C1 in 2011, that the claimants were husband and wife, and that they were registered as directors and shareholders. It accepted that offer letters were issued in 2011 on the basis of £12,500 annual salaries for stated weekly hours, but found those figures had been chosen for tax-avoidance reasons and did not correspond to the actual working arrangements. The claimed reduction in C1's hours from 37.5 to 22 hours a week from 1 April 2020 was given little weight, no reliable record of actual hours was produced, the bank statements did not show a regular salary pattern, and the claimants' own case showed long periods with no salary payments.

Applying section 230 ERA 1996 and the authorities in Ready Mixed Concrete, Autoclenz, Eaton, Rajah and Neufeld and Howe, the tribunal held that there was no mutuality of obligation, no sufficient control and no genuine contract of employment. It found the written offer letters did not reflect how the parties actually conducted themselves and described the purported contracts as a sham. On that basis, neither claimant proved employee status, so the First Respondent was not liable to pay salary, holidays, notice pay or redundancy pay, and the Second Respondent was not liable to make any payment from the Fund.