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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Laverty v Firecrest Compartmentation Ltd Department for Employment and ... Firecrest NI Ltd [2011] NIIT 01109_11IT (19 October 2011)
URL: http://www.bailii.org/nie/cases/NIIT/2011/01109_11IT.html
Cite as: [2011] NIIT 01109_11IT, [2011] NIIT 1109_11IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1109/11
CLAIMANT: Robert Joseph Laverty
RESPONDENT: 1. Firecrest Compartmentation Ltd
2. Department for Employment and Learning
3. Firecrest NI Ltd
DECISION
(A) The claims against Firecrest Compartmentation Ltd and against Firecrest NI Ltd are not well-founded and accordingly each of those claims is dismissed.
(B) The respondent Department (“the Department”) is not liable to make a payment to the claimant in respect of redundancy pursuant to Article 201 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”).
Constitution of Tribunal:
Chairman (sitting alone): Mr P Buggy
Appearances:
The claimant appeared in person.
1. Firecrest Compartmentation Ltd did not put in a response and accordingly was debarred from participating.
2. The respondent was represented by Mr P McAteer, Barrister-at-Law, instructed by the Departmental Solicitors Office.
3. Firecrest NI Ltd was not represented at this hearing.
REASONS
1. I announced my decision at the end of the hearing. At the same time, I gave oral reasons for that decision. What follows is by way of summary only.
2. I decided that the claims against the employer-respondents had to be dismissed, and that neither of the employer-respondents was liable to make a payment to the claimant in respect of redundancy, mainly for the following reasons.
3. I noted that, at paragraphs 80 and 81 of the judgment of the Court of Appeal in Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld [2009] EWCA Civ 280, the English Court of Appeal set out principles which are relevant in the context of this case.
4. I noted, in particular, that at paragraph 80 of the judgment of the Court in that case, the following points were made:
“80. There is no reason in principle why someone who is a shareholder and director of a company cannot also be an employee of the company under a contract of employment. There is also no reason in principle why someone whose shareholding in the company gives him control of it ... cannot be an employee. In short, a person whose economic interest in a company and its business means that he is in practice properly to be regarded as their “owner” can also be an employee of the company ...
81. Whether or not such a shareholder/director is an employee of the company is a question of fact for the court or tribunal before which such issue arises. In any such case there may in theory be two such issues, although in practice the evidence relevant to the resolution will be likely to overlap. The first, and logically preliminary one, will be whether the putative contract is a genuine contract or a sham. The second will be whether, assuming it is a genuine contract, it amounts to a contract of employment. (It might, for example, instead amount to a contract for services) ...”
5. I noted that, at paragraph 84 of Neufeld, the Court of Appeal broadly endorsed a statement of principles which had been set out by Elias J in Clark v Clark Construction Initiatives Ltd and Another [2008] IRLR 364.
6. I applied the Neufeld and Clark principles to the facts of this case. I noted and concluded the following.
7. I noted and concluded the following. Although the claimant worked regular hours, and worked hard, he worked such hours as he himself considered to be appropriate. It was agreed by the claimant that his terms and conditions were the same as Mr Terrence Crawford’s terms and conditions. I noted that Mr Crawford was confused as to whether he was entitled to 28 days holidays per year, or whether he was entitled to 30 days holidays per year; I was satisfied that this confusion was an indication that the amount of holidays taken by Mr Crawford and Mr Laverty was not dependant upon the extent of any contractual entitlements. Having had regard to the particular circumstances of this case, I considered that the fact that this claimant’s pay was always subject to PAYE tax and National Insurance deductions was of limited significance in the context of deciding whether or not the claimant was employed by the company under a contact of employment.
8. I noted that, from the mid-1990s until 2003, the relevant business was run as an unincorporated partnership, with the claimant and Mr Crawford being the two partners, each of whom had equal shares. I noted that in 2003 the company was incorporated and that, from the date of incorporation, the business was in the hands of the limited company that was thus created. As the claimant himself freely acknowledged, if he had been asked in 2002 whether he was an employee of the business, he would unhesitatingly have answered that question in the negative. After incorporation, there was no change of significance (in the present context) regarding what the claimant did, what he was required to do, why he was required to do it, or how he did it.
Chairman:
Date and place of hearing: 17 October 2011, Belfast.
Date decision recorded in register and issued to parties: