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Martina Murphy
Martina acts on behalf of NHS Trusts, the
Metropolitan Police Authority, and local
authorities, and is on Thompsons Solicitors'
approved panel of Counsel. Martina is also
on the Employment Committee for the
Federation of Small Businesses.
Recently, in November 2009, she was instructed on behalf of a FTSE
250 Company in its application for a High Court injunction which
involved issues of restrictive covenants and protection of
confidential information.
When she's not working, Martina is a keen runner and has
completed the London Marathon. She can often be found at a
ridiculously early hour running around Greenwich Park with the
Greenwich Runners.
partnership, he would be regarded for that purpose as employed by the
partnership.”
The EAT dismissed the appeal, upholding the ET’s decision. In enacting
s.4(4), Parliament had expressly provided that the legal test for
determining whether a person was a partner or an employee of a
partnership (the test under Partnership Act 1890) also determined
whether a member of an LLP was employed by it for the purposes of the
Employment Rights Act 1996. In the context of partnership, the tribunal
had to decide first whether a person fell within the category of
partnership or employment. If it decided that the person was not a
partner, it did not follow that the person was necessarily an employee;
the usual common law tests would still need to be applied, as the person
might in fact be self-employed.
The EAT decided that the tribunal had been correct to conclude that the
words "any purpose" and "that purpose" in s.4(4) had to be regarded as
a reference to K's role as chief investment officer, and that it had to ask
itself whether, if the LLP was a normal partnership under the Partnership
Act 1890, K's role as chief investment officer would be regarded as
employment. The tribunal had been entitled, on the evidence before it, to
conclude that K was not an employee of TFO. It had applied the correct
legal test and had made findings of fact, which it was entitled to make.
The employee status of a controlling shareholder
In Secretary of State for Business, Enterprise and Regulatory
Reform (BERR) v Neufeld & Anor [2009] IRLR 475 CA the Court of
Appeal has given guidance on the approach employment tribunals
should take in considering whether a majority shareholder should be
regarded as an employee.
The case concerned the common situation of a majority shareholder
and/or director of an insolvent company claiming to be an ‘employee’ in
order to claim certain unpaid amounts from the Secretary of State under
the Employment Rights Act 1996 s.182 Part XII (‘employee rights on
insolvency of the employer’). On the facts of these joined cases, directors
with 90% (Neufeld) and 100% (Howe) shareholdings respectively in
their companies were employees.
Although the CA stated that whether or not such a shareholder/director
is an employee of the company is a question of fact, they gave some
helpful guidance. In any such case there are likely to be two issues,
although in practice the evidence relevant to their resolution will be
likely to overlap.
a. The first and logically preliminary issue will be whether the putative
contract is a genuine contract or a sham.
b. The second issue, assuming there is a genuine contract, is whether it
amounted to a contract of employment (as opposed to eg a contract
for services) at the relevant time.
The CA made it clear, that, in particular, it will be no answer to a
majority/controlling shareholder’s claim to be an employee to argue that
he cannot be an employee in law because:
(i) The extent of his control of the company means that the control
condition of a contract of employment cannot be satisfied; or
(ii) He has practical control over his own destiny and cannot be
dismissed from his employment except with his consent.
Further, the CA observed that an owner acting as an owner, as is
inevitable in small companies for example, can also be an employee.
TC
Snow Problems
Although what has been arguably the coldest snap in a
generation has passed, its effects will be long felt. The popular
press reported that millions were told that they would lose a
day’s pay if they did not get into work while Sky News announced
that one in ten firms said that their entire workforce had been
absent at times during the worst affected period. This article
considers the issues which are likely to arise during episodes of
extreme weather and suggests a guideline approach.
Starting point
our authors
The starting point will always be the contract of employment or
written particulars of employment. If there is a clearly defined policy
to deal with inclement weather then that should be the end of the
matter. This, however, will rarely be the case.
Disciplinary sanction
Theoretically, an employer might want to take disciplinary steps
against an employee who has failed to turn up for work if, in their
opinion, the employee was able to work but had chosen not to.
As part of any disciplinary procedure an employer would be required
to inquire into the known circumstances of each absence. This would
be essential given that consistency in treatment is one of the
hallmarks of a fair disciplinary procedure. Given the extreme weather
experienced almost universally this year it would be difficult for an
employer to investigate the circumstances of each case and, therefore,
to ensure a consistent approach.
It would almost always be unfair to dismiss an employee for failing to
turn up to work where hampered by snow, particularly where the
employer was aware that the employee would not be able to attend.
Deductions from wages
Anecdotal evidence suggests that some employers have proposed to
make, or have made, deductions from wages. By way of the ERA 1996,
ss. 13(1) and 15(1) no deductions may be made from a worker’s
wages unless:
i. It is required or permitted by a statutory or contractual provision;
or
ii. The worker in question has given his/her prior consent to the
deduction.
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