United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT NEITHER PRESENT NOR REPRESENTED
For the Respondents	THE RESPONDENT IS NEITHER PRESENT NOR REPRESENTED


 


MR RECORDER LANGSTAFF QC:

1. This is an appeal by Mr Georgiou against his former employers, Cleo Fashions. The Employment Tribunal found that Cleo Fashions are also insolvent, in liquidation. The claim that was presented to the London North Tribunal on 13 July was for a redundancy payment. A decision was promulgated on 2 August 1999 and Mr Georgiou appeals to this Tribunal with the leave of the President who conducted the preliminary hearing.
2. The issue is whether or not Mr Georgiou was an employee of the company. The facts were these: -

a) Mr Georgiou and his wife formed a company in which they had 250 shares. The company made blouses and dresses and employed some 11 or 12 others. He signed a contract of employment, which is detailed, and in a very familiar form, on 6 April 1993. This appointed him General Manager and Quality Controller, set out his hours of work, his pay and his holiday entitlement. He was, by virtue of his shareholding, also a Director.

b) His wife also worked for the company as a Machinist but had no part, it appears, in the administration, although she part owned the premises in which the business was conducted.

3. The Employment Tribunal made the following central finding upon which it based its decision and I quote:

"We find that Mr Georgiou ran the company and was not an employee of the company, and, that although Mr Georgiou was paid through the PAYE system and Tax and National Insurance was deducted this is only one factor in considering whether he was an employee and looking at facts as a whole we conclude that he was not."

They went on to find that Mrs Georgiou was employed by the company and was therefore entitled to the redundancy payment she claimed.

4. The essence of the finding is therefore in these words:

"That Mr Georgiou ran the company and was not an employee of the company."

as if the two were mutually exclusive. They are not. An employee who is a General Manager or Chief Executive can in every true sense be said to run the company of which he is an employee. It is entirely circular to say that a reason why someone is not an employee is that he is, in the words of the Employment Tribunal, 'not an employee.' No factor which tends to suggest that Mr Georgiou was other than an employee is set out. There is no clue from the extended reasons of the Tribunal why it is that they concluded that Mr Georgiou was not an employee.

5. The Law

An employee is defined in the Employment Rights Act 1996 at s.230 (1) as meaning.

"An individual who has entered into or works under….a contract of employment."

Here Mr Georgiou had entered into a contract of employment. The document was before the Employment Tribunal. There is no suggestion of which we are aware that the document was in any way a sham. If there had been, the Employment Tribunal would have been certain to say so and to deal with that argument.

6. We, therefore were inclined to allow the appeal and to conclude that on any reasonable view of the facts recited to us by the Employment Tribunal, Mr Georgiou must on the basis of the statutory definition be an employee, quite apart from the fact that every other aspect of the work which Mr Georgiou did, to which the Employment Tribunal had regard, would appear to confirm this.
7. However, we are conscious that the Employment Tribunal decision is very sparse and that if we were to take that course, we might therefore be missing a factor, to which they had regard. It may be, perhaps, that in their reference to the facts as a whole and their reference to the payment of tax through the PAYE system being "Only one factor" that there was indeed other evidence available before the Employment Tribunal, which played a part, otherwise un-specified, in their conclusion. We note that the Secretary of State for Trade and Industry denied that either of the applicants were employees. We would be surprised if there was no proper basis for this submission, thin as it might be. The Secretary of State has not been represented before us today; not having been, it appears, notified of this appeal hearing.
8. It is axiomatic that an Employment Tribunal should set out the facts in sufficient detail to let the parties know why they have won or why they have lost. In this case it seems to us that the Employment Tribunal has failed to do so. The only conclusion therefore to which we can properly come is that this appeal should be allowed and the matter remitted to a differently constituted Employment Tribunal for determination of the issue. We need to add only one thing. The Employment Tribunal in its decision dealt with the case of Mrs Georgiou. There is no ground upon which her case can be reopened. She succeeded. It appears to us that there is no distinction properly to be made between her position and that of her husband, unless in some way, upon the basis of some fact, which is not apparent to us, the Employment Tribunal were able to point of some aspect of the control which Mr Georgiou had over the company which is so compelling as to require it. We doubt that such a distinction truly exists, but recognise that the full facts may not be before us. For those reasons we shall allow this appeal and order as we have indicated.