Thread by @JasonBraier

1/ Rainford v Dorset Aquatics Ltd: the EAT considers how the law on s.230 ERA status applies to a director/shareholder of a very small family business.

assets.publishing.service.gov.uk/media/61b0d9ec…

#ukemplaw

2/ 2 brothers owned a family landscaping & water feature business. They split the work between them & worked freely without the other being in control of them. They worked hours they chose, took holidays they chose & were free to do other work outside the company.

3/ The brothers were paid an equal "salary" on which they paid PAYE income tax & NICs on accountants' advice for tax reasons. They also paid themselves dividends. They were directors & shareholders of the business. There was no written contract of employment.

4/ The brothers fell out & one started to do work for company clients but charged to another company & then absented himself from working for the company. He ended up bringing claims for unfair dismissal, notice pay, unlawful deductions & holiday pay.

5/ The jurisdictional question of employee/worker status was raised. The ET decided the C was neither an employee nor worker. The EAT rejected his appeal. The EAT started by looking at the Clark v Clark Construction & SoS v Neufeld on employment of directors/shareholders:

6/ The EAT also noted from Uber the need to focus on the statutory test, the relevance of subjective views of obligations, inconsistency between genuine right of substitution & employment & the potential irrelevance of the basis of salary/taxes.

7/ The EAT distinguished between 2 sorts of control: the control of a shareholder/director over a company (irrelevant to status); & control of a company over what the person does & how he does it. The ET was justified in finding little or no control exercised over C's work.

8/ It had also been open to the EJ on the evidence in this case to make findings of fact about a genuine right to substitute, even though in reality it was unlikely the right would be exercised.