In person (unrepresented) For the First v Secretary of State for Business and 2 others — 2024

Mr Glen Ford brought claims for redundancy pay, notice pay, holiday pay and arrears of wages following the liquidation of Paxford Composites Ltd. The Secretary of State defended the case on the basis that he was not an employee. The tribunal therefore had to decide whether he was an employee for the purposes of ss.166 and 182 ERA 1996.

The tribunal accepted that the signed service agreement dated 9 May 2006 was genuine. It found that the document, which referred throughout to the Executive's employment, had been drafted by a solicitor after the management buyout. The fact that the agreement had not been updated after changes in the company's board, name and remuneration arrangements did not make it a sham or show that the contract had been discharged. The tribunal also found that, once he became sole director in July 2015, Mr Ford was entitled to vary the agreement with himself.

Applying Ready Mixed Concrete, Autoclenz, Clark and Neufeld, the tribunal found that the Claimant worked personally, was subject to sufficient control, and had mutuality of obligation. It relied on evidence that he worked regular hours, clocked in and out, booked holidays through the HR system, received sick pay and pension contributions, and carried out engineering, administrative, sales and governance work alongside other staff. His shareholding, loans to the company and personal guarantee were treated as factors that did not prevent employee status.

On remuneration, the tribunal accepted that the Claimant had at different times been paid through PAYE, a mix of PAYE and dividends, and then again through PAYE from March 2022 at a reduced amount because of financial difficulties. It accepted his explanation that he did not appreciate the legal significance of paying himself below the national minimum wage. Applying Knight, the tribunal held that there had been no variation or discharge of the contract, only a choice to take a lower salary. It concluded that the factors pointing towards employment status outweighed those against and awarded redundancy pay of £12,112.50, notice pay of £4,750, holiday pay of £1,140 and arrears of wages of £1,520, making a total of £19,522.50.