BAILII case number: [1996] UKEAT 901_95_0506
Appeal No. EAT/901/95
EMPOLYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At the Tribunal
On 5 June 1996
Before 
THE HONOURABLE MR JUSTICE BUTTERFIELD
MR L D COWAN
MR R JACKSON

MR J G WILLIAMS          APPELLANT
(1) JOHN WILLIAMS MARINE LTD
(2) SECRETARY OF STATE FOR EMPLOYMENT          RESPONDENTS

Transcript of Proceedings
JUDGMENT
PRELIMINARY HEARING
Revised

ADVANCE \D 170.10 APPEARANCE
For the Appellant MR C WALKER
(of Counsel) appearing under the Employment Law
Appeal Advice Scheme

MR JUSTICE BUTTERFIELD: This is an appeal against the decision of the Industrial Tribunal sitting at Norwich promulgated to the parties on 1 June 1995, whereby the Appellant's claim under The Redundancy Payments Scheme was dismissed on the ground that he was not an employee of the First Respondents to his application, John Williams Marine Ltd.
This matter comes before us ex-parte as a preliminary hearing in order to determine whether there is an arguable ground of appeal which can justify this matter going forward to be considered by the full Appeal Tribunal. If there is no error of law disclosed, which is arguable, then there is no purpose in allowing the matter to go forward which would result in costs being incurred by both parties. 
The Appellant, John Williams, was the Managing Director and Chairman of a limited liability company, John Williams Marine Ltd. That was a company incorporated in April 1977. The original directors were the Appellant and his wife; the issued capital of the company was £100 in £1 shares, 99 of which were held by the Appellant and one by his former wife. From the date of incorporation the Appellant worked full-time for his company and received regular monthly payments which were subject to Schedule E (PAYE) deductions and Class 1 National Insurance contributions.
The Appellant ran the company himself employing at one time, up to 18 people. However, sadly the recession ultimately bit and the company ceased trading in May 1992. The Appellant continued to be paid on a regular basis until the company stopped trading.
However, whilst the company stopped trading it has not been wound up and is still extant. The company owns one asset, the factory, from which its operations were formerly carried out. The factory is now leased and it is hoped that ultimately it can be sold to satisfy the company's indebtedness to its bankers. 
The Appellant applied to the Industrial Tribunal for a declaration that he was entitled to a redundancy payment from the company. If he was so entitled, the company being unable to meet such a payment, the Department of Employment would be responsible for paying the Appellant. To be so entitled the Appellant had to establish that there was a contract of service between himself and the respondent Company, under which he was an employee.
The Industrial Tribunal decided that he was not such an employee. They decided that the reality was that he was a full-time working owner/director of the respondent Company and had complete control over it. 
The Appellant now appeals against that decision. His appeal is based solely on the ground that, in reaching the conclusion to which we have referred, the Industrial Tribunal's decision was perverse; that is to say it was a decision which no reasonable Tribunal, properly directed, could have reached on the evidence before it. 
The matter has been helpfully and succinctly argued before us by Mr Walker, who has appeared today for the Appellant, and has said (if we may say so) everything that could possibly be said, in support of this appeal. In particular, he directs our attention to the way in which the Tribunal expressed its decision in relation to the method of calculation of remuneration. He points out that the Tribunal asserted that the Appellant's remuneration, whilst paid on a regular monthly basis, was in reality a payment of drawings on account and his remuneration was only fixed retrospectively and depended on the past performance of the company.
It is submitted to us that that was demonstrably wrong. We are content to proceed on the basis that that is correct. However, the ultimate question of fact for the Industrial Tribunal was whether the reality here was that the Appellant was an employee, or whether the reality here was that he was a full-time working owner/director. 
That was a question of fact for the Industrial Tribunal. They were entitled to look at all the circumstances of the case. It is clear that they did just that. They took into account the regular monthly payments; the fact that those payments were subject to deductions under the PAYE scheme and the fact that the Appellant worked solely for his company, but we are unanimously of the view that the reality of the evidence here is that the Appellant was free to run the company however he chose. Nobody could dismiss him. Nobody could tell him how to run the company. Nobody could tell him when he worked or for how long, or indeed what remuneration he should have. The terms of his employment could not be enforced against him in any way. Although of course, the company was a separate legal entity, in real terms the Appellant was the company.
In our unanimous view, had this Tribunal reached any other decision, that would have been perverse. It is clear that the finding that they did reach cannot be categorised as perverse or unreasonable in any way and despite Mr Walker's efforts, for which we are grateful, we regret that this appeal must be dismissed.