She had relied upon an unsigned contract of employment and various P60s to show she was an employee of the company.
The decision caused a degree of eyebrow raising among Insolvency Practitioners.
In a separate case of Ajar-Tec Ltd v Stack UKEAT 0293/13, an employment tribunal held that a director and shareholder, who performed part-time work for a company without pay for at least three years, was an "employee" and a "worker" for the purposes of the Employment Rights Act 1996.
The tribunal had implied a term that the individual should have been paid at a reasonable rate from a reasonable starting date. However, on appeal, the EAT's view was that it was necessary for the tribunal to determine whether there was an express or implied contract before going on to consider any implied remuneration terms.
The EAT therefore remitted the case to be heard by a different tribunal.
The key difference between this case and Knight seems to have been that in Knight, C was entitled to remuneration, she had an unsigned contract, she just never drew a salary, in order to assist her failing business.
It seems a pretty fine distinction given that she was the sole director and the sole shareholder and director and would have in effect drawn up her own contract of employment.
Sarah Rushton (email@example.com)
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