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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Buchan v Secretary Of State For Employment [1996] UKEAT 770_95_2006 (20 June 1996)
URL: http://www.bailii.org/uk/cases/UKEAT/1996/770_95_2006.html
Cite as: [1997] BCC 145, [1997] IRLR 80, [1996] UKEAT 770_95_2006
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EAT/1291/95
At the Tribunal
Judgment delivered on 29 July 1996
THE HONOURABLE MR JUSTICE MUMMERY (P)
MR J A SCOULLER
MR S M SPRINGER MBE
MR R BUCHAN
MR C J IVEY
JUDGMENT
Revised
ADVANCE \D 170.10
APPEARANCES
(EAT/770/95)
For Mr R Buchan NO APPEARANCE BY
OR REPRESENTATION
ON BEHALF OF THE APPELLANT
For the Secretary of State MR BRUCE CARR
For Employment (of Counsel)
The Treasury Solicitor
Queen Anne's Chambers
28 Broadway
London SW1H 9JS
(EAT/1291/95)
For Mr C J Ivey MR GUY PRICHARD
(of Counsel)
Woodfords Solicitors
70/72 Parsons Green Lane
London SW6 4HU
For the Secretary of State MR BRUCE CARR
For Employment (of Counsel)
The Treasury Solicitor
Queen Anne's Chambers
28 Broadway
London SW1H 9JS
MR JUSTICE MUMMERY (PRESIDENT):
INTRODUCTION
In recent years Industrial Tribunals and this Tribunal have heard an increasing number of cases in which a person, being both a director and a majority shareholder in a small private company, which has become insolvent, claims to have been an employee of the company for the purpose of recovering redundancy and other payments from the Secretary of State under sections 106 and 122 of The Employment Protection (Consolidation) Act 1978 ("the 1978 Act"). Different decisions on this point have been reached by different Industrial Tribunals. In some cases the Tribunal has held that the claimant is an employee. In other cases the Tribunal has held that the claimant is not an employee.
This variation in view is not altogether surprising. The precise circumstances of a claimant differ from case to case. There is no comprehensive closed statutory or common law definition of an employee designed to produce a wholly predictable result.
These two appeals provide the Appeal Tribunal with an opportunity to re-consider the legal position of such claimants. Counsel suggested that the Appeal Tribunal should attempt to formulate a test or to frame guidelines for the assistance of legal advisers and of future Industrial Tribunals so as to promote the predictability and consistency of conclusions. The cases on the question of who is an employee, show that it is impossible to devise a single foolproof test to accommodate both (a) the principle of certainty, which requires predicability of result and consistency of conclusion, and (b) the principle of justice, which requires space for the operation of circumstances in individual cases.
There is much to be said for quitting the quest for a single test and for approaching the issue of employee status from different directions. The issue may be illuminated by asking a series of questions - is the claimant under the control of another? Is the claimant an integral part of another's organisation? Is the claimant in business on his own account? What is the economic reality of the relationship between the claimant and the person he claims to be his employer? Is there mutuality of obligation between them? What is their respective bargaining power? It must be noted that:
(1) The issue is always coloured by the context in which the question of the claimant's work status has arisen; and
(2) The answers will highlight conflicting factors operating in any given situation. Some factors will point to an employment relationship. Some will point away from such a relationship. The decision making body has to consider the relevance of all these factors, decide what weight to give to each of them, evaluate them and balance one against the other in order to arrive at a conclusion.
Against this background we propose to focus on the specific question whether a tribunal can ever be legally justified in concluding that a majority shareholder of a company is an employee of the company.
We shall build on the foundations of the statutory provisions. We shall then attempt to state the legal propositions which can be derived from the relevant authorities. Finally we shall consider the legal correctness or otherwise of the conclusions of these two Industrial Tribunals in the light of the facts, the law and the rival submissions of the Appellants and the Respondents.
THE STATUTORY PROVISIONS
Under section 106 of the 1978 Act a payment may only be made out of the Redundancy Fund by the Secretary of State if the claimant is an employee of an employer who has become insolvent. Similarly, under section 122 of the 1978 Act, which is contained in Part VII, an application for a payment by the Secretary of State on the insolvency of an employer may only be made by an employee of the insolvent employer. The relevant definitions are contained in section 153 of the 1978 Act. Those definitions apply throughout the 1978 Act, except in so far as the context otherwise requires. The 1978 Act was enacted to consolidate the law relating to rights of employees arising out of their employment, including the rights relating to the insolvency of employers contained in Part VII. The relevant definitions are as follows:
"`Employee' means an individual who has entered into or works under (or where the employment has ceased, worked under) a contract of employment.
`Contract of employment' means a contract of service or apprenticeship, whether express or implied, or (if it is expressed) whether it is oral or in writing.
`Employment' means employment under a contract of employment.
`Employer', in relation to an employee, means the person by whom the employee is (or, in a case where the employment has ceased, was) employed".
Contracts of Service at Common Law
The most notable feature of those interpretation provisions is that the crucial expression "a contract of service" is not defined by statute. In order to identify the characteristics of a contract of service it is necessary to consult the common law. There are many decisions, not all easily reconcilable, on who has entered into or works under a contract of service. We shall confine our consideration of the authorities to those which most closely bear on the issue of a director and shareholder of a company who claims also to be an employee. There are relatively few authorities on this point. It is possible to state the relevant legal propositions with reasonable certainty and without the need to review all of the cases in detail. The following uncontroversial propositions can be derived from the authorities:
(1) A limited company is a distinct legal entity from those individuals who own shares in it and those who are directors of it.
(2) A director or managing director of a limited company may enter into and work under a contract of service with the company.
(3) A shareholder in a company may enter into and work under a contract of service with the company.
(4) A person will usually be regarded as having entered into and as working under a contract of service if he is bound by contract (whether express or implied, whether in writing or orally) (a) if he is bound to devote all his time to the affairs of the company and to do all in his power to develop and extend its business and (b) if he is engaged on terms which provide for the payment of a regular fixed salary and for determination of that contract.
These propositions may be derived from the following cases cited in argument: Trussed Steel Concrete Company Limited v Green [1946] Ch 115, 121; Lee v Lee's Air Farming Ltd [1961] AC 12; Folami v Nigerline (UK) Ltd [1978] ICR 277 at 280 and Eaton v Robert Eaton Ltd [1988] IRLR 83. (The last case identifies many factors relevant to employee status, but is not a case of a controlling shareholder).
THE CONTROLLING SHAREHOLDER
The application of the legal propositions summarised above to the facts of a particular case may produce a different legal result according to whether or not the claimant has a controlling shareholding in the company. If the claimant is able, by reason of a beneficial interest in the shares of the company, to prevent his dismissal from his position in the company, he is outside the class of persons intended to be protected by the provisions of the 1978 Act and is not an employee within the meaning of that Act. The critical provisions of the 1978 Act give legal protection to a person against being dismissed unfairly, including dismissal for redundancy on the insolvency of an employer, and for guaranteed State payments for employees in that event. A controlling shareholder can prevent the company from dismissing him from his position. It would be inconsistent with the purposes of the 1978 Act to extend protection to a person who cannot be dismissed from his position in a company without his agreement. This result conforms both to common sense and to the industrial or commercial realities of the situation. It is, however, common for submissions to be made on behalf of a controlling shareholder in support of the proposition that he is an employee of a company. Those submissions are most frequently based on the decision of the Judicial Committee of the Privy Council in Lee v Lee's Air Farming Ltd [1961] AC 12. That case is relied on for the proposition that a shareholder, with full and unrestricted control over all the operations of the company, is employed under a contract of service with the company if he works for it full time.
In our judgment, that argument ignores the context in which Lee's case was decided. Reliance upon that case is misplaced optimism in the context of employment protection. In the Lee case a claim was made by a widow for compensation under The New Zealand Workers' Compensation Act 1922 arising out of the death of her husband as a result of an accident in the course of his employment by the company of which he was governing director and controlling shareholder. The company was insured against the payment of compensation in the case of an accident to him in the course of employment. The Judicial Committee held that Mr Lee was a "worker" employed by the company with whom he had entered into, and who worked under, a contract of service. The Judicial Committee rejected the proposition that this was a legal impossibility because he controlled the company. The reasoning of the Judicial Committee was that the company, though under Mr Lee's control, was a separate and distinct legal entity with which he could enter into a valid contract of service, that the company could give orders to him, and that he could function in a dual capacity, acting in one capacity as the person who gave orders to himself in another capacity.
The decision does not mean that there will always be a contract of service in such circumstances. It all depends on the context. That was a case of a claim for compensation. The purpose of the insurance arrangements covering employees of the company was to provide compensation for a dependant, such as a widow, in the event of an accident to an employee. That purpose would be defeated if it were held that Mr Lee was not a worker under a contract of service. The liability to pay compensation could not be avoided by an attack on the validity of the contractual relations between Mr Lee and the company (which was not suggested to be a sham). His position as a controlling shareholder did not make it impossible in those circumstances for his wife to satisfy the conditions for the payment of compensation under the insurance arrangement.
The issue in this case arises in the context of employment protection legislation. Taking the facts of Mr Lee's case, it is difficult, in an employment protection context, to conceive of circumstances in which Mr Lee could have been regarded as an employee of the company for the purposes of making a claim against the company for a redundancy payment or for unfair or wrongful dismissal. None of those events could give rise to any remedy by him against the company, because the wrong of which he would complain, could not occur without his concurrence. That feature would also affect the position of a guarantor of a liability of the company, such as the Secretary of State in relation to redundancy and other payments. The liability of the Secretary of State is to make a payment which the insolvent employer is liable to make, but cannot make because of lack of funds. If a person has no remedy against the company over which it exercises control, he cannot have any claim against the guarantor of the company's liability.
We shall now consider the findings of fact which the Industrial Tribunal made in each of the cases and the decisions reached on the status of the claimant.
THE CASE OF MR RICHARD BUCHAN
(A) Findings of Fact
(1) In about 1985 Croydon Scanning Centre Ltd was incorporated. Mr Buchan and a Mr Colin Parrish were "working directors" of the company and equal shareholders. By 1991 there were 16 people working for the company. Mr Parrish ceased to be a director in 1993.
(2) Mr Buchan spent most of his day working as a scanner operator and getting sales. He decided his daily tasks and controlled staff. He worked a five day week. He had a salary of £35,000, subject to PAYE and National Insurance deductions. He was entitled to five weeks' holiday a year. He had no written service contract. There was no board minute recording his engagement or conditions of service.
(3) On 31 October 1994 administrative receivers were appointed under the terms of the debenture granted by the company to its bankers and on 8 November 1994 Mr Paul Davies, one of the joint administrative receivers, wrote to Mr Buchan as follows:
"In my capacity as Agent of the Company I have to advise you that the Company is no longer in a position to make payments for services rendered by you under its Contract of Employment with you. You should therefore regard your service as terminated, as from 31st October 1994, and accordingly, you should immediately register as unemployed with your local Unemployment Benefit Office, as failure to do so may jeopardise any benefits you may be entitled to receive.
Under the insolvency provisions of the Employment Protection (Consolidation) Act 1978, any claims you may have for accrued pay, holiday pay or payment in lieu of notice may, subject to certain limitations, be paid to you by the Employment Department of the Redundancy Payments Office out of the National Insurance Fund."
Reference was also made to employees with at least two years of continuous service who might qualify for redundancy pay.
(4) Mr Buchan made a claim to the Employment Department. In response to questions on a questionnaire dated 27 November 1994 he stated that:
"his functions, duties and responsibilities as a director were `getting work and general running of company business'.[paragraph 18]
he was not subject to control or guidance [paragraph 21]
he had a 50 per cent shareholding in the company." [paragraph 26]
(5) The Employment Department (Redundancy Payments Service) refused the application on the ground that he was not an employee of the company.
(6) Mr Buchan therefore presented an application to the Industrial Tribunal on 25 January 1995 claiming against the Secretary of State arrears of wages, redundancy pay and payments in lieu of notice pursuant to section 106 of the 1978 Act.
He said, "I maintain that I was an employee".
(7) In his Notice of Appearance dated 9 February 1995 the Secretary of State admitted that the company was insolvent, but did not admit that Mr Buchan was an employee of the company or that he was entitled to receive any payment under sections 106 or 122 of the 1978 Act.
(B) The Decision of the Industrial Tribunal
At the hearing before the Industrial Tribunal at London (South) on 7 March 1995 Mr Buchan appeared in person and gave evidence. The Secretary of State submitted written representations. In the Extended Reasons served on 31 May 1995 the Industrial Tribunal explained their unanimous decision that Mr Buchan was not an employee of the company. The Tribunal's reasons can be summarised as follows:
(1) The enterprise was Mr Buchan's own and that of Mr Parrish.
(2) There was no express or implied contract of employment with the company.
(3) His remuneration arrangements were different from those of the company's other staff.
(4) Mr Buchan was not subject to the control of any person or effectively of the board of directors.
On 10 July 1995 Mr Buchan served a Notice of Appeal. On 10 November 1995 the Appeal Tribunal directed that the matter proceed to a full hearing and that the Chairman be asked to produce his notes of evidence.
(C) Mr Buchan's Submissions
Mr Sherratt made the following submissions in support of Mr Buchan's appeal:
(1) There was a presumption of a contract of service if a director is required full-time for a company in return for a salary.
(2) The presumption was supported by the evidence. Mr Buchan worked alongside other employees as an operator of a scanner and as a sales manager. He spent only five per cent of his time in the role of a director. A director can be an employee as well as an office holder. Mr Buchan devoted his time exclusively to the business of the company. He was the company secretary who was also an employee of the company. He had no other business activities.
(3) The reasons given by the Industrial Tribunal for concluding that Mr Buchan was not an employee were illogical. The manner in which he was initially appointed as a director was irrelevant. It was not necessary to have an express or written contract of employment. Such a contract could be and often is inferred. The remuneration arrangements of senior management are often different from those of other members of the staff. It could not be said that he controlled the company. He was only a 50 per cent shareholder.
(4) In brief, the Industrial Tribunal's decision was plainly wrong. It offended reason and properly informed logic. There was overwhelming evidence that he was employed by the company. For nearly ten years he had paid PAYE. It was outrageous to deny him the benefit of redundancy pay after he had contributed as an employee over that ten years.
THE CASE OF MR CHARLES IVEY
(A) Findings of Fact by the Industrial Tribunal
(1) For some years Mr Charles Ivey was a sole trader. In 1984 he formed a company (Charles Ivey Ltd) to take over his business. He held 99 out of the 100 £1 issue shares in the company. The remaining share was held by the company secretary. Mr Ivey and the company secretary were the two directors on the board. They met as a board twice a year. There was a third director who ceased to be active.
(2) Mr Ivey was appointed managing director under a written contract, replaced by an updated version in 1989 in the same form as that issued to other employees. Mr Ivey's wish was to instil a team spirit amongst all those who worked for the company. His contract provided for payment of £28,500 a year, for reimbursement of expenses and for a 44 hour week. He had 22 days a year holiday and the benefit of a contracted out pension scheme. He worked every day.
(3) In November 1993 he took a salary cut of £6000. At that time the company's premises were moved to Cheam and the company also acquired a franchise to retail Alfa Remeo cars. Alfa Remeo imposed strict controls over the business through managerial visits.
(4) On 20 January 1995 the company went into receivership and Mr Ivey ceased to work for it.
(D) The Decision of the Industrial Tribunal
The Industrial Tribunal reached the conclusion that Mr Ivey was not an employee of the company. The hearing took place on 18 May 1995. Mr Ivey was represented by Counsel. The Secretary of State for Employment made written submissions. The Extended Reasons for the decision were sent to the parties on 14 June 1995. Although it was stated to be a decision of the Chairman (Professor Rideout) sitting alone, it is common ground that he sat with two lay members.
The reasons for the Tribunal decision that Mr Ivey was not an employee of the company and therefore not entitled to claim unpaid redundancy compensation from the Secretary of State may be briefly summarised as follows:
(1) The intention of the parties, as indicated in the written contract, was only one factor in the equation.
(2) The reality of the situation was that Mr Ivey controlled the company. The majority of his time was spent in discharging the functions of a "controlling managing director". (He accepted in the answer to the questionnaire that he was not "subject to control or guidance").
(3) Charles Ivey Ltd was "in every sense the Applicant's company". At the end of the day he was a business man carrying out the functions of a business man, rather than an employee behaving as such. In an important concluding paragraph of the extended reasons (paragraph 10) the Industrial Tribunal said:
"10. We are aware that the import of this decision is that an individual with a controlling interest who manages the company will have great difficulty in proving himself to be an employee. The position of a managing director subject to the control of a board in which he does not have a controlling interest is, in this respect, entirely different."
(C) Submissions of Mr Ivey
Mr Ivey appealed by Notice of Appeal served on 25 July 1995. At a preliminary hearing on 29 January 1996 the Appeal Tribunal directed that the appeal be allowed to proceed to a full hearing.
Mr Prichard made the following submissions on behalf of Mr Ivey in support of the appeal:
(1) The Industrial Tribunal were wrong in law in deciding that Mr Ivey could not be an employee because of his job function i.e. manager and businessman. A manager performing managerial tasks may be as much an employee as a "production worker".
(2) It was established by authority that a person may be both a director of a company and one of its employees.
(3) Although the Industrial Tribunal recognised that control is no longer a decisive factor in determining whether a person is or is not an employee, the Industrial Tribunal in fact used control as the decisive factor and reasoned that, because Mr Ivey controlled the company, he controlled the manner in which he performed his own job. He was not under the control of the company and was not therefore an employee of the company.
(4) Also, on the question of control, the Tribunal erred in attaching insufficient significance to the control exercised by Alfa Romeo as franchisee over the way in which Mr Ivey performed his job.
(5) There was no good reason for the Industrial Tribunal to go behind the express terms of the written contract, which was a contract of employment. There was no suggestion that the contract was not genuine or not bona fide. The contract was good evidence of the parties' intentions.
(6) Mr Ivey always wished to be regarded as one of the employees of the company. There was nothing else that he could have done to achieve that relationship with the company.
(7) Mr Ivey was not appealing against a decision of fact. He was appealing against a legal error in the test or approach adopted by the Tribunal. The factors which predominated were consistent with Mr Ivey's claimed status as an employee - the description of his job, the written contract, the obligation to pay him a fixed salary. The Industrial Tribunal erred in regarding one factor as decisive, namely whether his functions were performed under the supervision of the board of the company. The Industrial Tribunal erred in drawing a hard distinction between, on the one hand, a "businessman" and, on the other hand, an employee. Many employees, such as managers and departmental heads, discharge functions which call for the initiative and skills of a businessman or entrepreneur. They are no less employees because of that. Mr Prichard concluded his submissions by asserting that the decision of the Industrial Tribunal set an undesirable precedent in industrial terms. Consensus management was important. It was important that owners, part-owners and managers, who wished to engender the appropriate team spirit in their organisation, should be seen to share democratically in the enterprises they own and manage. It is just and proper that they should share the benefit of being an employee, as well as the burden necessary to ensure the survival of the business.
CONCLUSIONS
(A) Fact or Law
In determining these appeals the limits on the jurisdiction of the Appeal Tribunal are relevant. The limits of the jurisdiction have been explored and explained in the Court of Appeal's decisions in O'Kelly v Trusthouse Forte Plc [1983] ICR 728 and Clifford v Union of Democratic Mineworkers [1991] IRLR 519.
The position on jurisdiction may be summarised as follows:
(1) An appeal to the Appeal Tribunal from a decision of an Industrial Tribunal is confined to questions of law. It is not a re-hearing or reconsideration of the case.
(2) A decision of an Industrial Tribunal on the question whether the claimant is or is not an employee who has entered into or works under a contract of employment within the meaning of the 1978 Act (or of any other relevant legislation) may involve the determination of
(a) a pure question of fact e.g. a finding on disputed oral and documentary evidence whether the claimant agreed or did not agree on a certain date to terms and conditions set out in a document;
(b) a pure question of law e.g. a determination on a disputed question of construction of certain documents or on the disputed interpretation of a statutory provision. The formulation of the appropriate legal test to be applied for determination of the issue of employee status is a question of law;
(c) questions of both law and fact.
(3) The jurisdiction of the Appeal Tribunal therefore depends on the nature of the specific question which the Appellant (or cross-appealing Respondent) proposes for decision on the appeal.
(a) The Appeal Tribunal may correct an explicit or implicit misdirection in the decision of the Industrial Tribunal on a point of law;
(b) Unless the decision of the Industrial Tribunal involves a misdirection on a point of law or is perverse, it may not differ from the Tribunal in its decision on a disputed question of primary or inferred fact or reach a different conclusion on the overall evaluation of the relevant documentary and factual material and of the various factors relevant to determination of the issue.
(4) Although "the triple categorisation of issues as "fact" and "law" and "mixed fact and law" may not be "very helpful in the context of the jurisdiction of the Appeal Tribunal", it is convenient for the purposes of ascertaining the limits of the Appeal Tribunal's jurisdiction to have those distinctions in mind. Those distinctions prevent the Appeal Tribunal from falling into the error of posing for its decision a single general composite question such as "Is the Applicant an employee? in a case which may involve decisions on a number of questions of disputed primary fact, disputed construction of documents, statutes and disputed questions of fact and degree which involve the weighing and evaluation of a number of factors present in a situation. In the last case different Tribunals may be legally entitled to reach different results. The Tribunal must ask of each question which arises for its decision whether it is pure fact or a pure law or a mixed question and only exercise its jurisdiction on those matters which fall within the realm of law.
(B) MR BUCHAN'S CASE
In our judgment, Mr Buchan's appeal should be dismissed because there is no error of law in the decision of the Industrial Tribunal. The Tribunal were entitled, on the material before them, to conclude that Mr Buchan was not an employee of the company but was, through the company, running his own business enterprise. As beneficial owner of 50 per cent of the shares in the company he was able to block any decision by the board or of the company a general meeting with which he did not agree, including a decision as to his own dismissal or terms of service. In other words, Mr Buchan's agreement was necessary before he could be dismissed summarily or on notice. If he did agree to a decision to dismiss him, then that would not be a "dismissal" within the meaning of the 1978 Act. It would be a case of what is sometimes called "self-dismissal". The intervention of the administrative receiver did not and could not alter Mr Buchan's legal status viz a viz the company. The appointment of the receiver and the receiver's views on the employment status of Mr Buchan are not, in our view, relevant to the determination of the issue whether Mr Buchan was an employee of the company. If Mr Buchan was not an employee before the receivers were appointed, he would not become an employee by reason of that appointment. The control taken by the receiver is over the assets of the company and he acts in place of the directors. That event is not relevant to the issue whether or not the director had or had not been an employee of the company.
(C) MR IVEY'S CASE
In our judgment, there is no error of law in the decision of the Industrial Tribunal that Mr Ivey was not an employee of the company. As in the case of Mr Buchan, the Industrial Tribunal were entitled, on the material before them, to conclude that Mr Ivey was not an employee. In reaching that conclusion the Tribunal did not apply the wrong legal test or adopt the wrong legal approach. On the legal principles summarised above, we have reached the conclusion that Mr Ivey's case is a fortiori that of Mr Buchan.
(1) There is a distinction, properly recognised by the Industrial Tribunal, between an individual running his own business through the medium of a limited company and an individual employee of a limited company who is subject to the control of the board of directors of that company.
(2) The context in which the issue of employee or non-employee arises under the 1978 Act is protection of employment. More particularly, the purpose of sections 106 and 122 of the 1978 Act is to provide for State funded compensation to be available for employees employed by those whose businesses have failed financially. It is not the purpose of those provisions to provide compensation to an individual businessman or entrepreneur whose own incorporated business ventures have been unsuccessful.
(3) The Industrial Tribunal did not err, as argued by Mr Prichard, in regarding the role of a managing director and an employee to be mutually exclusive. They recognised, in their reference to the authorities, that a director may be an employee. They were dealing with a different case - the case of a person who was a director and controlling shareholder of the company claiming to be employed by the company which he controlled and by which he could not, unless he concurred, be dismissed or made redundant.
(4) The Industrial Tribunal did not err in confusing control of the company with control over the manner of doing the job. They recognised, however, the reality of the situation at work, namely that an individual who, through his beneficial shareholding, controls the running of the company, would at the same time control, or be in a position to assert control over, the way in which he works within the company.
(5) The "Control" exercised by Alfa Romeo as franchisor was rightly regarded as irrelevant to the existence of a contract of service between Mr Ivey and his company. A franchisor exercises control to protect the use of his name in, and the commercial association with, the business of another. Such control as Alfa Remeo exercised did not, on any view of the matter, lead to Mr Ivey being employed by Alfa Romeo. If Mr Ivey was not an employee of the company before the franchise agreement with Alfa Romeo and it is difficult to see how he became one as a result of the company entering into that agreement.
(6) The Tribunal were not bound to reach a conclusion that Mr Ivey was an employee by virtue of the written contract. The written contract was only one factor to be considered. The label which the parties put on their relationships in the context of work is no more conclusive of the legal relationship than the label which the parties put on a relationship in the context of the occupation of property (e.g. licensee or tenant).
(7) The Industrial Tribunal did not err in law in deciding the issue solely by reference to control as an indicator of employment status of Mr Ivey. The Tribunal examined all aspects of the company's business and Mr Ivey's part in it and concluded that the true nature of the relationship was that he was a man running his own business. He was not at the same time employed as an employee in the business which he was running and it is difficult to conceive of circumstances in which that could be the case.
For all these reasons, we dismiss both appeals. We grant leave to appeal. As already observed, these cases are increasingly common. If we have misinterpreted or misapplied the law, it would help us, the Industrial Tribunals and those responsible for giving advice to have a corrective ruling as soon as possible from the Court of Appeal.