Employment Status Claim Dismissed Due to Lack of Evidence
📌 In brief
The Employment Tribunal dismissed the claimant's application for payments from the fund because they failed to provide sufficient evidence proving their employment status with the first respondent.
⚖️ Legal holding
To prove employment status, the claimant must provide evidence showing they were subject to a contract of employment.
📖 Technical summary
The claimant's application for payments from the fund was dismissed due to lack of evidence proving employment status.
📜 Headnote Official document
The Employment Tribunal dismissed the claimant's application for payments from the fund due to insufficient evidence proving employment status with the first respondent.
📚 Full judgment Official document
Case number 3308980-1 & 3308982- 3/2023
1
EMPLOYMENT TRIBUNALS
Claimant:
[redacted]
(2) [NAME_1]
Respondent: [redacted]
(2) Secretary of State for Business and Trade
Heard at: Watford Employment Tribunal On: 12 December 2024
Before: Employment Judge Price
Representation Claimants:
[redacted] First Respondent: [redacted] Second Respondent: [redacted]
JUDGMENT
1. All claims made for payments from the [NAME_4] are dismissed.
Reasons
1. The claimants did not attend today’s hearing. There was no application made for a postponement of the matter and no explanation provided for their non- attendance. This matter has previously been set down for a hearing on 1 October 2024 and was adjourned due to the second claimant not being well enough to attend. It was also adjourned on a previous occasion on 23 July 2024 on the basis that the notification given to the second respondent did not appear
Case number 3308980-1 & 3308982- 3/2023
2 to be adequate. The details of this are set out in the record of case managed dated 23 July 2024 and I do not repeat them here.
2. On 1 October 2024, the tribunal made various directions. The claimants were required to provide a schedule of loss by 22 October 2025. None has bene provided to date. Albeit that the direction stated 2025, this was clearly a typographical error, given the date of the hearing.
3. The second claimant was also required to provide medical evidence regarding her inability to attend the hearing listed for the 1 October 2024. This was to be done by 4 November 2024. She has not done so.
4. The claimants were required provide witness statements by 4 November 2024. They have not done so. Indeed, they have not provided any evidence in addition to that provided by the second respondent.
5. Given that this matter has been adjourned on two previous occasions and in the absence of any application to postpone by the claimants I decided to continue with the hearing. Hearings must be conducted proportionately, this includes the use of tribunal time. In addition, fairness to all parties includes the expeditious conclusion of hearings were possible. Considering these principles and the given this procedural history of this claim to date I decided to proceed today to hear the claims.
6. The claimants made an application to the [NAME_4] due to the insolvency of the first respondent. This application was rejected on the basis that the claimants had not shown there were employees. They duly made a claim to the tribunal to challenge that refusal. The Secretary of State was joined to the proceedings as second respondent.
7. The issue before me today, concerned whether the claimants were in fact employees of the first respondent. The burden is on the putative employee to show that he or she was employed, Secretary of State v Neufeld and Howe [2009] EWCA Civ 280, at paragraph 88.
8. The second respondent does not accept that the claimants were employees.
9. The second respondent has provided a significant amount of documentary evidence that the claimants were directors of the company. Although one individual can be both a director and an employee. I reminded myself, that whether or not the claimants were employees is a question of fact for the tribunal to decide.
10. The claimants have provided no evidence to the tribunal in addition to the documents provided by the second respondent. They have not attended and not provided any testimony to support their claim.
11. From the documentary evidence before me the financial position is somewhat complex and unclear. Both claimants took dividends payments from the company of £111,000 in 2021. There is no evidence of dividends being paid in
Case number 3308980-1 & 3308982- 3/2023
3 other years, although the claimants seem to indicate in their directors’ statement that they may have been. There is no clear evidence of wages been paid in the bank statements provided by the claimants. The PAYE records provided by the second respondent indicate the claimants worked for a different number of hours to that which is set out on their claim form. They also indicate that the claimants received a sum lower than the national minimum wage for the work done. The first claimant did not pay tax or NI under the [NAME_5] in 2021. The second claimant did not pay tax or N I under the [NAME_5] in 2020, 2021 or 2022. None of this is conclusive.
12. The claimants stated in a director’s questionnaire they are 50% shareholders each. Again, this is not conclusive.
13. There is no contract of employment in writing. There is no oral evidence of any contract of employment.
14. Further, there is no evidence of personal service, mutuality of obligation or a requirement for personal service. These have been said to be the irreducible minimums of a contract of employment, see Ready Mixed Concrete (South East) v Minister of Pensions and National Insurance [1968] 2 QB 497 and Nethermere (St Neots) Ltd v Gardiner [1984] I.C.R. 612, at paragraph 623. There is no evidence of any other to whom the claimants were answerable to or under the control of in terms of the delivery of their work. There is no evidence that the claimants provided any consideration for the wages they received. Indeed, there is limited evidence they received wages. Finally, there is no evidence that they provided any work or any services.
15. In these circumstances, I cannot conclude that the claimants have proven they were party to a contract of employment and were employees. It follows it has not been proven by the claimants that the requirements of section 186 or 166 of the Employment Rights Act 1996 have been met for any of the claimed payments to be made from the [NAME_4].
16. For these reasons both claims are dismissed.
_____________________________
Employment Judge Price
Date: 12/12/2024
JUDGMENT SENT TO THE PARTIES ON
15/1/2025
For Employment Tribunal – [NAME_6] number 3308980-1 & 3308982- 3/2023
4 Notes
Reasons for the judgment having been given orally at the hearing, written reasons will not be provided unless a request was made by either party at the hearing or a written request is presented by either party within 14 days of the sending of this written record of the decision.
Public access to employment tribunal decisions
Judgments and reasons for the judgments are published, in full, online at www.gov.uk/employment-tribunal-decisions shortly after a copy has been sent to the claimant(s) and respondent(s) in a case.
Recording and Transcription
Please note that if a Tribunal hearing has been recorded you may request a transcript of the recording, for which a charge may be payable. If a transcript is produced it will not include any oral judgment or reasons given at the hearing. The transcript will not be checked, approved or verified by a judge. There is more information in the joint Presidential Practice Direction on the Recording and Transcription of Hearings, and accompanying Guidance, which can be found here:
https://www.judiciary.uk/guidance-and-resources/employment-rules-and-legislation- practice-directions/
❓ Frequently asked questions
What did this decision decide?
The claimant's application for payments from the fund was dismissed due to insufficient evidence proving employment status.
What was the dispute about?
The dispute was about whether the claimant was an employee of the first respondent, which would entitle them to payments from the fund.
How did the court decide, and why?
The court decided to dismiss the claim because the claimant did not provide any additional evidence beyond what was provided by the second respondent, and they did not attend the hearing.
Which laws or rules were applied?
No specific laws or rules were applied in this decision.
What was the argument that mattered most?
The argument that mattered most was the lack of evidence provided by the claimant to prove their employment status.
Was the decision for or against the person who brought the case?
The decision was against the person who brought the case.
What does this mean for someone in a similar situation?
Someone in a similar situation should ensure they provide sufficient evidence to prove their employment status if they wish to make a claim for payments from the fund.
What evidence or documents mattered?
The evidence or documents that mattered were those provided by the second respondent, as the claimant did not provide any additional evidence.