Case 4108546/2022 · Employment Tribunal
Mr Harinder Sahota v Secretary of State for Business, Energy and 1 other — 2023
- Case reference
- 4108546/2022
- Decision date
- 9 June 2023
- Jurisdiction
- Scotland
- Judge
- Employment Judge P O’Donnell
Parties
3 namedKey findings
Tribunal's reasoningThe claimant formed Bizsolco Ltd t/a Negotium in July 2015 and was its sole shareholder and director throughout. He said he began working full-time for the business in 2017, doing a wide range of operational tasks, working about 50 to 60 hours per week, and taking variable pay depending on cashflow. The company mainly used self-employed salespeople, later also engaging two employees and an apprentice. It ceased trading on 23 May 2022, and the claimant then sought payments from the National Insurance Fund for redundancy pay, notice pay, untaken holiday pay, and arrears of pay said to arise from non-payment of the national minimum wage.
The tribunal set out the law on the definition of 'employee' in s230 ERA 1996, the concept of a contract of employment, and the authorities on the 'multiple test', including Ready Mixed Concrete, the irreducible minimum of control, personal service and mutuality of obligation, and the cases on controlling shareholders and directors such as Bottrill, Clark and Neufeld. It accepted that there can be an oral contract, but found there was no evidence of anything resembling offer and acceptance of employment terms. The document at p126 was not treated as a written contract because it was created after R2 had ceased trading.
On the facts, the tribunal found that the claimant had complete control over R2, his own work, his hours, and the amount he paid himself. He decided month by month whether to take any wage at all, depending on what the company could afford, and there was no legal obligation on him to work or on R2 to pay him a fixed amount. There was no-one who could discipline or dismiss him, and he could not point to any real evidence of an employer-employee relationship beyond his later assertion that a director could also be an employee. The tribunal considered the pension membership and holiday/sick leave evidence to be of little weight. It concluded that the claimant was not an employee of R2 within s230 ERA 1996, and even if some contract existed it was not a contract of employment, so the claim under s182 ERA 1996 was dismissed in full.
Claims and outcomes
4 findings recorded| Claim type | Issue or finding | Outcome | Protected characteristic | Award |
|---|---|---|---|---|
| Redundancy | Dismissed because the tribunal found the claimant was not an employee within s230 ERA 1996 and therefore had no entitlement to a redundancy payment from the National Insurance Fund under s182 ERA 1996. | Dismissed | — | — |
| Breach of contract | This covered the claim for pay in lieu of notice. It was dismissed on the same basis: no contract of employment was proved, so there was no entitlement to notice pay from the National Insurance Fund. | Dismissed | — | — |
| Holiday pay | The judgment at para 3(c) refers to 'pay in lieu of untaken wages', but the legal discussion is of Working Time Regulations holiday entitlement and compensation for untaken holidays. The tribunal dismissed the claim because the claimant was not an employee. | Dismissed | — | — |
| Unlawful deduction from wages | This reflects the claim for arrears of pay said to arise from non-payment of the national minimum wage. The tribunal did not reach the merits because it found the claimant was not an employee. | Dismissed | — | — |
Legal tests applied
8 references- s230 ERA 1996
- Ready Mixed Concrete multiple test
- irreducible minimum: control, personal service and mutuality of obligation
- Bottrill factors
- Clark v Clark Construction Initiatives factors
- Neufeld modifications
- Autoclenz principle
- s182 ERA 1996
Official outcome judgment PDF
Gov.uk primary recordThe official judgment PDF on gov.uk contains the tribunal's outcome, reasoning, and any remedy details. Where this page does not yet show extracted outcomes for every claim, use the PDF as the authoritative source.
Published on gov.uk under the Open Government Licence v3.0.
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