• Claimant: Andrew James Hassard
• Respondent: Department for the Economy
  

A company director and shareholder was also found to be an employee for the purposes of a redundancy payment from the department under the statutory scheme.

The claimant became a director and majority shareholder in Norfee Bikes Limited in 2017.  He held 74% of the shares and intended to trade with the same name.  He was given a salary of £36,000 (no objection from the other shareholders).  The claimant was also put into a Nest pension and his pay was increased and received bonuses.  There was another colleague who was also paid a salary with bonuses.  The claimant did not receive a dividends or loans from the company but he was not accountable to a manager or supervisor.  At its height there were seven employees working for the company.

In July 2022 the claimant set up another company and it sublet part of Norfee’s premises. There were issues with cash flow with Norfee and the claimant opted out of receiving a salary and making contributions in respect of pension. In 2023 Norfee entered into liquidation. The claimant then made an application to the respondent for payment of redundancy, notice, arrears of pay and holidays arising out of the insolvency of the company. 

The respondent rejected the claim stating they were not satisfied that he was an employee as defined under Article 3 of the Employment Rights Order.

The Tribunal found that the claimant was an employee based upon the circumstances.  The respondent argued that his employment had been transferred to another company set up by the claimant. However, taking a holistic view the Tribunal was not persuaded that the business was transferred to that new company before September 2023 when the insolvency occurred and that there was no automatic transfer of the claimant’s employment under TUPE.  As a result, it was found that the claimant was entitled to a redundancy payment and arrears of pay under the Scheme.

The basis of the statutory scheme is to provide protection for those employees who are unable to get a redundancy payment from a, now, insolvency employer.  This case tends to tread a fine line when it comes to the extent of protection that should be offered and the fact that the claimant operated the company, which is obviously separate to the individual, and then started to work for a new company which he was involved in its establishment.  Perhaps this will provide for greater protection under the Scheme to those in similar situations based upon the core elements required under the legislation.

NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/