The Claimant was a solicitor with the Respondent, which was a private limited company incorporated in 2008. The Claimant had been a shareholder and director since its incorporation along with 2 other solicitors. There were no express employment contracts and no shareholder's agreement. In 2014 the Claimant resigned her directorship and became an employee but was dismissed in 2015. Her claim for unfair dismissal was dismissed as she did not have the requisite 2 years' service to bring her claim. The EJ, having examined the way in which the directors were remunerated (by way of notional salary in one month for tax purposes, director's loans and dividends) concluded that the Claimant was a director of the Respondent and not an employee from her appointment as a director in November 2008 until her resignation in 2014 after which she became an employee of the Respondent. The Claimant appealed.

The EAT dismissed the appeal. The EJ had applied the guidance in Neufeld and reached a permissible conclusion on the material before him. He was entitled to find that the factors which he mentioned pointed away from the existence of a contract of employment.

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Appeal No. UKEAT/0169/16/LA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

At the Tribunal

On 4 May 2017

Judgment handed down on 4 July 2017

Before

HIS HONOUR JUDGE DAVID RICHARDSON

(SITTING ALONE)

DUGDALE (APPELLANT)

**

**

DDE LAW LIMITED (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR DAVID CAMPION (of Counsel)
Instructed by:
EAD Solicitors LLP
Prospect House
Columbus Quay
Liverpool
L3 4DB

For the Respondent
MR SIMON GORTON (One of Her Majesty's Counsel)
Instructed by:
John Hughes and Co
PO Box 125
Liverpool
L37 2WR

CONTRACT OF EMPLOYMENT - Whether established

The Claimant and two others incorporated the Respondent Company as a solicitors' practice. They worked in it as solicitors. From 2008 to 2014 the Claimant (like her fellow directors) did not enter into any express contract of employment, written or oral, with the Respondent, and received payment by loans later repaid from dividends on her shares with a small notional payment of salary equivalent to the personal tax allowance. The Employment Judge, commenting that the directors "acted like partners would have done in a traditional partnership", held that the Claimant was not an employee of the Respondent during this period.

Held: appeal dismissed. The Employment Judge applied the guidance given by the Court of Appeal in Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld & Howe [2009] IRLR 475 and did not err in law.

1. This appeal is brought by Ms Dugdale ("the Claimant") against a Judgment of the Employment Tribunal sitting in Liverpool (Employment Judge Sherratt sitting alone) dated 16 March 2016. The Claimant brought a claim of unfair dismissal against DDE Law Limited ("the Respondent"). It was common ground that her employment terminated on 10 April 2015. The Employment Judge held that she had not become an employee of the Respondent until 6 November 2014 and therefore did not have the requisite two years' service to bring her claim of unfair dismissal. She appeals, contending that she was an employee of the Respondent from its incorporation in 2008.

1. The Respondent is a private limited company carrying on business as a solicitors' practice, principally in the area of criminal law. It was incorporated on 6 November 2008. The founders were the Claimant, Ms Doolan and Mr Egerton. They were practising solicitors. Each held two shares and each was a director. This remained the position until 2014.

1. In 2014 there were several changes. Ms Doolan sold her shares and resigned her directorship. Mr McLorinan became a shareholder and director. On 2 November 2014 following a complaint about her conduct the Claimant transferred her shares and resigned her directorship. By the end of 2014 Mr Egerton and Mr McLorinan were the sole shareholders and directors. The Claimant, however, was employed as a solicitor at a salary of £3,500 per month from 6 November 2014 until her dismissal on 10 April 2015.

1. When the Respondent was founded in 2008 there was no written shareholders' agreement. Nor did any shareholder have an express service agreement or contract of employment. There was no evidence before the Employment Judge that the employment status of the directors was ever considered at the time of foundation. Nor was there any agreement about hours of work or holidays. The Employment Judge found that all the directors worked the hours required to deal with the needs of a busy practice; and they took holidays as they wished while ensuring that there was proper cover for clients in the courts.

1. For the most part the Claimant and the other directors were remunerated by taking money out of the Respondent which was credited to their director's loan account. They would draw monthly amounts which might vary according to the cash available. At the end of the year the loan account was reduced by declaring dividends out of the profits of the company. Thus, for example, in the year ending 30 November 2009, the first year of business, the profits were £188,416; corporation tax was paid in the sum of £53,500; dividends paid were £120,600.

1. There was, however, one other way in which the Claimant and the other directors were remunerated. They received a small amount described as "director's remuneration". In the first year, the three directors were paid in total £19,500, whereas the dividends were £120,600. By the year ending November 2013 the Claimant was paid £9,500 in this way whereas her dividend income was £86,666. The amounts paid in this way were just sufficient to cover personal allowances for tax purposes. In her evidence the Claimant accepted that part of the reason for this payment was to save tax; she said she did not know any other reason why it was done and did not enquire.

1. For tax and PAYE purposes directors' fees and salary are administered in a similar way. Thus, for example, a payslip was produced for the £9,500 in November 2013 though it was not actually sent to her. A P60 was produced for that amount at the year end, and she declared it as income on the "employment" page of her tax return.

1. The Claimant had described herself as the "senior partner" of the Respondent both to its practice manager and in a letter to the Solicitors Regulation Authority. She considered herself to be the prime mover in its business. In her evidence she made reference to the Respondent as a "firm", not a company. As the Employment Judge found - accepting the unchallenged evidence of the practice manager - she gave orders at the Respondent but did not take them until she became an employee in November 2014.

1. When the Claimant applied for mortgages she varied in the way she described herself. In 2010 she said she was self-employed with a share of net profit. In 2011 she described herself as a shareholder in a limited company with a one-third shareholding and an income of about £100,000. In 2014 she again described herself as self employed.

1. The Employment Judge's Reasons contain a section from paragraphs 7 to 25 where he set out a mixture of findings of fact and recitation of evidence. I have extracted findings of fact from that section and drawn on them in the summary which I have already set out.

1. The Employment Judge then set out relevant law in paragraphs 26 to 34 of his Reasons. He referred in particular to Ready Mixed Concrete v Minister of Pensions and National Insurance [1968] 2 QB 497, Clark v Clark Construction Initiatives Ltd [2008] ICR 635 and Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld & Howe [2009] IRLR 475. He referred the parties to Train v DTE Business Advisory Services Ltd [2009] UKEAT/0201/08.

1. The Employment Judge said, in the course of this summary of the law:

"29. I take the view that in this case I am not deciding whether the claimant was an employee or self employed but whether the claimant when she was a shareholder … and director of the respondent was also an employee working under a contract of employment.

30. Company directors are not employees of the company they direct merely by being shareholders and directors. They can become employees of the company by contract and such contract can be either express or implied and if express it can be oral or in writing in accordance with section 230 of the Employment Rights Act referred to above."

1. The Employment Judge moved to his conclusions in paragraphs 35 to 47 of his Reasons. He found that there was no express oral or written contract, by which he meant, I think, contract of employment. There is no appeal against that finding.

1. He went on to consider the Claimant's argument that a contract of employment should be implied by virtue of the course of conduct between the parties. He pointed out that the Claimant did not have a controlling shareholding even if she appeared to think she was at least first among equals. He pointed out that there appeared to be nothing agreed about holidays or hours of work.

1. He then dealt with the question of remuneration in the following way:

"39. Looking at the way in which the claimant was remunerated, reference is made above to the "notional" salary "paid" in one month only for tax purposes, seemingly without the knowledge of the claimant, and the fact that she took regular monthly loans from the company which were later converted into dividends as far as the level of profit allowed. I have no reason to believe that the claimant was treated differently from the other directors with regard to remuneration but in my judgment this is not the way that an employee would be paid particularly with no PAYE tax being deducted and when it was at a rate less than the National Minimum Wage. I am aware that the NMW regulations do not apply to company directors. It seems to me that the way in which the claimant received payment from the respondent was similar to the way in which a partner in a firm would receive money with monthly drawings pending the determination of profit at the end of the year although in this case there was a fixed payment, like a director's fee, coupled with the monthly loan.

40. The fact that a payslip was prepared in the name of the claimant in only one month and that she did not know about it does not seem to me to be sufficient to make the claimant an employee, when there is evidence to the effect that that was merely a device to use up the personal allowances of the directors during each tax year.

41. Mr Pinder's submission that variations to pay were by agreement between the directors does not seem to me to be consistent with the claimant working under a contract of employment. If she and the other directors were employees and paid a regular salary then they would normally have been entitled to their monthly salary in full. There would have been certainty of monthly income for an employee not a variable amount dependent on available cash flow."

1. He pointed out that the Claimant did not appear, prior to November 2014, "to have been controlled by anyone but herself" (paragraph 43). He concluded as follows:

"45. In the absence of an express contract of employment there is nothing that enables me to conclude that there was an implied contract. There is nothing that seems to me to be any more consistent with the claimant being an employee than with her being a director.

46. Looking at all of the evidence and taking all of these factors into account, in my judgment the claimant and her fellow directors were not employees of the respondent. Although they were directors they acted like partners would have done in a traditional partnership, but running their practice through the medium of a limited company which gave them protection in the event of the failure of the business.

47. I therefore conclude that the claimant was a director of the respondent and not an employee from her appointment as a director on 6 November 2008 until her resignation on 2 November 2014 after which she became an employee of the respondent."

1. Part X of the Employment Rights Act 1996 makes provision for a right not to be unfairly dismissed. This right is conferred only on an employee: section 94(1). Subject to exceptions which are not material in this case the right does not apply to the dismissal of an employee unless he has been continuously employed for a period of not less than two years ending with the effective date of termination: section 108(1).

1. An "employee" is an individual who has entered into or works (or where the employment has ceased, worked) under a contract of employment: section 230(1). A contract of employment means a contract of service, whether express or implied: section 230(2).

1. At a hearing under Rule 3(10) the Claimant was permitted to amend the Notice of Appeal to encompass four grounds. Mr David Campion on behalf of the Claimant has pursued each of those grounds of appeal; and Mr Simon Gorton QC on behalf of the Respondent has resisted them.

1. The first ground of appeal relates to the way in which the Employment Judge dealt with the question of pay.

1. Mr Campion submitted that the Employment Judge failed to address the question whether any of the payments which the Claimant received from the Respondent, whatever their form, were received for services rendered under a contract of employment. He placed particular reliance of the recent decision of the Northern Ireland Court of Appeal in Department for Employment and Learning v Morgan [2016] IRLR 350 at paragraph 23. The Employment Judge should have asked whether the payments were "remuneration for services": see Benjamin v Minister of Pensions and National Insurance [1960] 2 QB 519 at 530. Remuneration is a critical feature in determining employment status. He placed emphasis on [Stack v Ajar-Tec Ltd ]()[2015] IRLR 474, where the Court of Appeal upheld a decision that Mr Stack, a director and shareholder who provided work to a company and received no remuneration, was also an employee. The Employment Tribunal in that case had held that there had been an express agreement that Mr Stack would work for the company and an implied term he would be paid a reasonable amount for the work he did.

1. Mr Campion further submitted that the Employment Judge placed "improper weight" on the manner in which the Claimant was paid. The label did not matter. In Hugh-Jones v St John's College [1979] ICR 848 it was said that it did not matter what the remuneration was called if it was in fact the consideration for doing the work. The Employment Judge should focus on the character of the receipt in the hands of the recipients: see Morgan at paragraph 20 again. Likewise it was irrelevant that the salary component was less than the national minimum wage: the Claimant would not cease to be an employee merely because the national minimum wage was not paid; and the Employment Tribunal should in any event have looked at the Claimant's remuneration as a whole when applying the national minimum wage legislation. Likewise it was irrelevant that there were variations in pay, as many cases show.

1. In response to these submissions Mr Gorton submitted that the Employment Judge directed himself correctly in law having regard to the leading cases, Clark and Neufeld. In substance he asked whether the remuneration was referable to a contract of employment; and he was entitled to find that it was not. On any view most payments were referable to dividends payable to shareholders; they did not compel the Employment Judge to find that there was a contract of employment. The fact that these payments were irregular and varied with cash flow was an important factor for the Employment Judge to assess. The "director's remuneration" could be referable to a contract of employment, but the Employment Judge was entitled to find that it was not, especially where it was a "notional salary" - an accountant's device apparently not resting on any agreement of which the Claimant was aware.

1. The second ground of appeal relates to the Employment Judge's finding that the Claimant and her fellow directors "acted like partners would have done in a traditional partnership" (paragraph 46). Mr Campion submitted that this statement is indicative of an error of law. Given that the Claimant and her fellow directors were certainly not partners, it was essential to look at the substance of their relationship to the Respondent in order to decide whether there was a contract of employment. The Employment Judge conflated directorship and partnership, overlooking a key difference. A person who is a true partner cannot be an employee, whereas a person who is a director can be and often is an employee. He submitted also that the Employment Judge ignored the fact that the Claimant was held out to HMRC as an employee.

1. Mr Gorton replied that the Employment Judge's finding on this question, which was solidly based on earlier findings of fact, was pertinent, for it was part of his task to look at how the relationship worked in order to decide whether a contract existed. Partnership can exist without a contract of employment. The Employment Judge did not ignore the fact that the Claimant was held out as an employee: he found that it was a device.

1. The third ground of appeal relates to the question of control. Mr Campion argued that the Employment Judge erred in giving any significant weight to the question of control, given the approach in Neufeld (see paragraphs 81 and 86) and the professional status of the Claimant. A low level of actual day-to-day control does not preclude an employment relationship: see [White v Troutbeck SA ]()[2013] IRLR 949. The fact that the Claimant had been suspended from work during 2014 was a feature pointing to control which the Employment Judge did not evaluate. Mr Gorton replied that the Employment Judge considered the question of control as required by the Ready Mixed Concrete case; he committed no error of law; and he did not address the question of suspension (which could arise whether or not the Claimant was an employee) because this was not argued below.

1. The final ground of appeal concerns the Claimant's status as director and shareholder. Mr Campion argued that the Employment Judge drew a false distinction between being a director and being an employee in paragraph 45 of the Reasons. These are not mutually exclusive states. The true question was whether the Claimant was an employee or self-employed. Mr Gorton submitted that there was no error of law on the part of the Employment Judge; the Employment Judge was well aware that a director could be an employee; he had not forgotten this when he wrote paragraph 45, which simply means "a director alone".

1. The Employment Appeal Tribunal is concerned only with the question whether there is an error of law in the decision of the Employment Tribunal: see section 21(1) of the Employment Tribunals Act 1996. It is well established that it will read the reasoning of the Employment Tribunal in the round, avoiding a pernickety or over-technical approach, when it considers whether the Employment Tribunal has stated the law correctly and applied it correctly at the point of decision.

1. The classic definition of a contract of employment is found in the Ready Mixed Concrete case at page 515 (MacKenna J):

"A contract of service exists if these three conditions are fulfilled. (i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service."

1. Later, elaborating on the question of control, he said:

"… Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted.

"What matters is lawful authority to command so far as there is scope for it and there must always be some room for it, if only in incidental or collateral matters." - Zuijs v Wirth Brothers Proprietary Ltd [[1955] 93 CLR 561 at p571].

To find where the right resides one must look first to the express terms of the contract, and if they deal fully with the matter one may look no further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by implication."

1. It is established law that a company may enter into a contract of employment even with a person who is the principal shareholder and in sole control of the company: see Lee v Lee's Air Farming Ltd [1961] AC 12, helpfully summarised and explained by Rimer LJ in Neufeld at paragraphs 27 to 38. Later, after reviewing a host of cases, Rimer LJ summarised the position at paragraph 80:

"80. There is no reason in principle why someone who is a shareholder and director of a company cannot also be an employee of the company under a contract of employment. There is also no reason in principle why someone whose shareholding in the company gives him control of it - even total control (as in Lee's case) - cannot be an employee. In short, a person whose economic interest in a company and its business means that he is in practice properly to be regarded as their 'owner' can also be an employee of the company. It will, in particular, be no answer to his claim to be such an employee to argue that: (i) the extent of his control of the company means that the control condition of a contract of employment cannot be satisfied; or (ii) that the practical control he has over his own destiny - including that he cannot be dismissed from his employment except with his consent - has the effect in law that he cannot be an employee at all. Point (i) is answered by Lee's case, which decided that the relevant control is in the company; point (ii) is answered by this court's rejection in [Secretary of State for Trade and Industry v] Bottrill [[1999] IRLR 326] of the reasoning in Buchan [v Secretary of State for Employment [1997] IRLR 80]."

1. In principle therefore there could be a contract of employment between the Respondent and the Claimant, or for that matter between the Respondent and either of the other shareholders and directors. The fact that each had a degree of ownership and control did not negate the possibility that all or each of them had such a contract.

1. It does not, however, follow that such a contract necessarily existed. Whether there was a contract between a shareholder/director and the company, and if so whether it was a contract of employment, is to be decided by the application of ordinary principles. Thus in Neufeld Rimer LJ said at paragraph 85:

"85. In deciding whether a valid contract of employment was in existence, consideration will have to be given to the requisite conditions for the creation of such a contract and the court or tribunal will want to be satisfied that the contract meets them. In Lee's case the position was ostensibly clear on the documents, with the only contentious issue being in relation to the control condition of a contract of employment. In some cases there will be a formal service agreement. Failing that, there may be a minute of a board meeting or a memorandum dealing with the matter. But in many cases involving small companies, with their control being in the hands of perhaps just one or two director/shareholders, the handling of such matters may have been dealt with informally and it may be a difficult question as to whether or not the correct inference from the facts is that the putative employee was, as claimed, truly an employee. In particular, a director of a company is the holder of an office and will not, merely by virtue of such office, be an employee: the putative employee will have to prove more than his appointment as a director. It will be relevant to consider how he has been paid. Has he been paid a salary, which points towards employment? Or merely by way of director's fees, which points away from it? In considering what the putative employee was actually doing, it will also be relevant to consider whether he was acting merely in his capacity as a director of the company; or whether he was acting as an employee."

1. Rimer LJ then commented on, and approved with modification, guidance which had been given by Elias J in Clark v Clark Construction Initiatives Ltd [2008] IRLR 364 at paragraph 98. The Employment Judge in this case summarised that guidance.

1. Against this background I can immediately dispose of the Claimant's fourth ground of appeal. I do not think the Employment Judge committed any error of law when he said that the question was whether the Claimant, when she was a shareholder and director of the Respondent, was also an employee working under a contract of employment: paragraph 29 of his Reasons. He was correctly reflecting the guidance in Neufeld; a director of a company is the holder of an office and will not be an employee merely by virtue of office; more must be proved. In paragraph 41 of his Reasons he was picking up the same point. He did not fall into the error of supposing that being a director and being an employee were mutually exclusive.

1. I turn next to the second ground of appeal: did the Employment Judge err in law because he took into account that they acted like partners in a traditional partnership?

1. In my judgment it is important to read the Reasons of the Employment Judge against the background that the parties, though lawyers, had not expressly entered into any contracts of employment either orally or in writing. The question was whether it was appropriate (to adopt the word used by Rimer LJ in paragraph 86 which I have quoted), in order to make sense of the conduct of the parties, to imply that they had done what they had not expressly done - namely, enter into contracts of employment with the Respondent.

1. Against this background it was in my judgment plainly relevant for the Employment Judge to take into account that the parties, though adopting a corporate structure, were modelling themselves on a partnership structure, "acting like partners would have done in a traditional partnership". Such a partnership can and does operate without any contract of employment between the partnership and the individual partner; rather it operates under partnership law, usually supplemented by the terms of a partnership agreement; and it is common for partners to draw against available funds by means of loan accounts until profits are calculated.

1. It is not fanciful to suppose that the Claimant and her fellow directors and shareholders intended to operate the company through its corporate structures, without individual contracts of employment, drawing against available funds through directors' loan accounts and receiving dividends in due course. There may have been an underlying shareholders' agreement of some kind; but it does not follow that there were contracts of employment between the shareholders and the Respondent.

1. I therefore reject the second ground of appeal: it was relevant, when the Employment Judge considered whether to imply a contract of employment, to take into account the overall method of operation by which the Claimant and her fellow shareholders and directors were proceeding. I can see no error of law in his doing so.

1. This brings me to the Claimant's first and principal ground of appeal - that the Employment Judge failed to have proper regard to the element of pay and to ask whether it was received under or was referable to a contract of employment.

1. In a private company a working director and shareholder may be remunerated in at least three ways, or in a combination of those ways. Firstly, dividends may be declared in respect of the director's shareholding. Secondly, the company or more usually the board may decide to pay directors' fees. Thirdly, the company or more usually the board may decide to enter into a contract of employment and pay remuneration under the contract.

1. It is relevant, as Rimer LJ said in Neufeld at paragraph 86, to consider how a director and shareholder has been paid. He said that payment of salary will point towards employment and payment of director's fees will point away from it. In my judgment payment by dividend will also generally point away from it. This is because entitlement to a dividend derives from the shareholding; it is not dependent on the existence of a contract of employment. In a case, such as this, where there are three shareholders who work in the company, the dividend will not depend on or be linked to the work of the individual shareholder; it will depend on the profitability of the company as a whole. But the circumstances of payment are infinitely variable and care needs to be taken before laying down any general rule.

1. The cases discussed by Weatherup LJ in the Northern Ireland Court of Appeal case of Morgan illustrate the range of possible outcomes in a case where a shareholder and director is paid by dividend. In Morgan the director and shareholder had a written contract of employment describing him as an "employee director" and expressly stating that he could take remuneration as dividend if he so wished. The Employment Tribunal found that he was an employee; and the Court of Appeal upheld the decision. Weatherup LJ referred, however, to other cases where payment of dividend to working directors or shareholders had not been found to be referable to a contract of employment: see paragraphs 15 to 21. He emphasised that the outcome of the cases was fact sensitive: see paragraph 22. He said it depended on the basis on which the payment was received - whether it was remuneration for services rendered under a contract of employment.

1. The existence in Morgan of a genuine written contract of employment which expressly acknowledged the right of the employee to take salary as dividend meant that it was not difficult to say that the remuneration was for services rendered under a contract of employment. That feature is entirely absent from this case. The Employment Judge was to my mind correct to take his guidance from Neufeld.

1. Likewise, I do not consider that the decision of the Court of Appeal in Stack is of any real assistance in determining this case. In Stack the Employment Tribunal found that there was an express contract of employment into which a term entitling the employee to payment was to be implied. In this case there is a clear finding that there was no express contract of employment. I would add that in Stack Tomlinson LJ expressed misgivings about the reasoning of the Employment Tribunal: see paragraphs 23 to 26 and again paragraph 31. The appeal appears to have been dismissed because the precise grounds of appeal upheld in the Employment Appeal Tribunal had not been made out: see paragraphs 28 to 30.

1. The Employment Judge was not bound to reach a different conclusion because a small part of the payment to the Claimant was classified by the accountant as "director's remuneration". He found that this was purely notional and seemingly unknown to the Claimant. He took it that the accountant intended it to be salary (though I would note that the accounts simply say "director's remuneration", and director's fees are collected in a similar way to salary). He did not commit any error of law because he discounted the importance of this feature. He was entitled to be sceptical about its importance. His point about the National Minimum Wage is a makeweight point of no real significance to his overall reasoning.

1. I have reached the conclusion that, reading the Employment Judge's reasoning in the round, there is no error of law in the way he approached the question of payment. He applied the guidance in Neufeld and reached a permissible conclusion on the material before him. He was entitled to find that the factors which he mentioned pointed away from the existence of a contract of employment. While it is true that the amount of pay can vary under a contract of employment, it is not a normal feature of a contract of employment that payment is taken by means of loans in variable amounts, repaid by dividends at the end of the year.

1. This leaves finally the Claimant's third ground, which relates to the question of control. It is of course true that the Ready Mixed Concrete test is concerned with the right to control rather than actual control: see the quotation above, and also White v Troutbeck SA [2013] IRLR 286 at paragraphs 37 to 44, and [2013] IRLR 949 at paragraphs 18, 38 and 41. Whether or not the Claimant was an employee, the Respondent had a right to control what she did: she was a minority shareholder and could be overruled by her fellow directors and shareholders. They could for example suspend her from involvement in the Respondent whether or not she was an employee. So the right to control was not a point of any great significance.

1. The point which the Employment Judge made about control in paragraph 43 was a practical and evidential one. The Claimant had for many years prior to 2014 held herself out as effectively the senior partner, taking orders from no-one. The fact that she gave up her directorship and shareholding at the time when she was expressly given the status of employment tended to show that there was a real change at this time. I do not think the Employment Judge fell into legal error by making this point.

1. For these reasons I conclude that the Employment Judge did not err in law. He reached a permissible conclusion on the material before him. The appeal will be dismissed.