Mr D Davidson v – Counsel The Secretary of State for Business — 2022

Mr D Davidson was the sole shareholder and a director of D2 Contracting Ltd, but he personally carried out the company’s quality assurance work for clients from 2015 to 2021. The tribunal, applying Ready Mixed Concrete and the guidance in Neufeld, held that ownership and directorship did not prevent him from also being an employee for ERA purposes. It found that there was a contract of employment and that he could be paid both salary and dividends.

On pay, the tribunal rejected the claimant’s case that he worked an average 48-hour week at National Minimum Wage rates. It found there was no reliable time-record evidence and preferred the HMRC and payslip evidence showing annual salary figures of £11,499, £11,850, £9,999 and £9,767, with a weekly pay figure of £187.82 at 31 March 2021. On that basis, the claim for arrears of pay failed because the tribunal found no reliable evidence of unpaid arrears.

Using the accepted weekly pay, the tribunal awarded statutory redundancy pay of £1,126.92 under section 166 ERA 1996. It also awarded balance of notice pay of £984.63 and accrued leave of £37.56, the latter two sums being subject to deduction of appropriate tax and National Insurance. The holiday element was limited to 0.54 days under regulation 14 of the Working Time Regulations 1998; the broader carry-forward argument under regulation 13(10) failed because the tribunal was not satisfied that coronavirus made it not reasonably practicable for the claimant to take the leave.