Case 4102228/2023 · Employment Tribunal
IN THE EMPLOYMENT TRIBUNAL (SCOTLAND) Judgment of the Tribunal i n Case No: 4102228/2023 Issued Following Final Hearing Heard at Edinburgh o n the st of J u l y 2023 Employment Judge J G d’lnverno Mr T Healy
At the final hearing in Edinburgh on 31 July 2023, the claimant sought National Insurance Fund payments for redundancy pay, compensatory notice pay, holiday pay, and, after an amendment at the bar, arrears of wages under section 184 ERA 1996. The claimant's representative invited dismissal of the claims insofar as directed against Terry Healy Group Limited, and the tribunal dismissed those claims. The central issue for the Secretary of State was whether the claimant was an employee of the company for section 230 ERA 1996 purposes on 4 August 2022 and, if so, from what earlier date.
On the evidence, the tribunal found that the claimant incorporated the company on 3 March 2014 and was the sole director and 100% shareholder until 30 June 2016, after which his wife became a director and he remained the majority shareholder. For the first period he received no remuneration, carried out all duties himself, and there was no contract under which he had agreed to provide personal service for wages. The tribunal held that he was not subject to sufficient control, did not have a contractual entitlement to pay, and was not an employee from 3 March 2014 until about late May or early June 2017.
That position changed when, on or about late May/beginning June 2017, his fellow director proposed that he be paid and he agreed to work 40 hours a week for about £1,187 gross (£1,000 net) per month. From then until liquidation on 4 August 2022 he was paid through PAYE, paid tax and employee NIC, took some paid leave, worked personally with no right of substitution, and attended the workplace daily. Applying the Ready Mixed Concrete mixed test, and accepting that a lesser degree of control may suffice in a small owner-managed company, the tribunal found mutuality of obligation, control in sufficient degree, and personal service. The claims therefore succeeded for the later period, but the tribunal did not quantify any sums because the parties expected to agree quantum, leaving the issue open for a later remedies hearing.
| Claim type | Issue or finding | Outcome | Protected characteristic | Award |
|---|---|---|---|---|
| Redundancy | Claim under sections 166 and 182 ERA 1996. Succeeded only for the period from about late May/early June 2017 to liquidation on 4 August 2022; the earlier period from 3 March 2014 to about 30 May 2017 was dismissed because the claimant was found not to be an employee. | Upheld | — | — |
| Breach of contract | Compensatory notice pay under section 184(1)(b) ERA 1996. The tribunal found no entitlement to contractual notice beyond the notice implied by section 86 ERA 1996, and the claim succeeded only for the period when employee status was established; quantum was not determined. | Upheld | — | — |
| Holiday pay | Holiday pay under section 184(1)(c) ERA 1996. The tribunal found the claimant was entitled to paid annual leave, but did not quantify any amount in this judgment. The claim succeeded only for the period from about late May/early June 2017 onwards. | Upheld | — | — |
| Other | Amended at the bar to add arrears of wages under section 184 ERA 1996 for 15 June to 18 July 2022, stated as £1,187.60 gross (£1,000 net). No separate award was quantified in this judgment. | Upheld | — | — |
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