United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 866_95_2811

Appeal No. EAT/866/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 28 November 1995

HIS HONOUR JUDGE H J BYRT QC

DR D GRIEVES CBE

MR R TODD

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MRS J SMALLEY          APPELLANT

SECRETARY OF STATE FOR EMPLOYMENT          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellant NO APPEARANCE BY OR

BEHALF OF THE APPELLANT


 


JUDGE BYRT QC: This is an appeal from the decision made on 25 May 1995 by a Chairman sitting alone for the Liverpool Industrial Tribunal. He decided that the Applicant (and now the Appellant) was not entitled to a payment from the Secretary of State in respect of a claim under Section 122 of the Employment Protection (Consolidation) Act 1978, when the company she worked for became insolvent.

The facts quite shortly are that Mrs Smalley had joined the company in 1971. At that time there were three shareholders and three directors, namely her husband, his father and uncle; in other words it was, in every sense, a family business.

In due course, the Appellant became a director herself and a shareholder. In 1982 she got a contract of employment and thereafter she received a weekly wage, paid National Insurance contributions and PAYE. By 1989 she and her husband were sole shareholders and directors.

In 1992, at the instance of the bank, Mr and Mrs Smalley had to mortgage their home and inject a further £40,000 capital into the business. From then onwards, they had almost equal shareholdings. For the last 80 weeks, before the company went insolvent, she herself received no salary. Payment under Section 122 is limited only to employees and the Secretary of State in this case has contended that the Appellant was not an employee.

We have this morning received a statement from Mrs Smalley, in which she makes a variety of comments and advances certain arguments in relation to the Chairman's stated reasons. In effect, she says that she was in every sense an employee; she had a contract of employment; she was paid wages which were taxed under the PAYE system; made National Insurance contributions. So far as control is concerned, she advanced a number of arguments, some of which are good and some not so good, but at the end of the day the Chairman had to weigh up all these factors and make a difficult decision about whether she was an employee or not.

We think that this is a case which should be argued fully. We have not been referred to any authorities, and there must be certain authorities which offer guidance on the issues in law in this case.

In all the circumstances, we think this is an appropriate matter to go forward to a full hearing and that is the decision of all of us.