BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
United Kingdom Employment Appeal Tribunal |
||
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Georgiou & Ors v Openhand Ltd & Anor [1999] UKEAT 875_98_0111 (1 November 1999) URL: http://www.bailii.org/uk/cases/UKEAT/1999/875_98_0111.html Cite as: [1999] UKEAT 875_98_0111, [1999] UKEAT 875_98_111 |
[New search] [Printable RTF version] [Help]
At the Tribunal | |
Before
THE HONOURABLE MR JUSTICE LINDSAY
MRS D M PALMER
MR S M SPRINGER MBE
APPELLANT | |
(2) SOS FOR TRADE & INDUSTRY |
RESPONDENT |
Transcript of Proceedings
Revised
Revised
For the Appellant | MR M DUGGAN (OF COUNSEL) MESSRS VANDER PUMP & SYKES LOUGH POINT 2 GLADBECK WAY ENFIELD MIDDLESEX EN2 7JB |
For the Respondent | MR N MOSS (OF COUNSEL) MR A TUREK THE TREASURY SOLICITOR QUEEN ANNE'S CHAMBERS 28 THE BROADWAY LONDON SW1H 9JS |
MR JUSTICE LINDSAY : Openhand Ltd was a company that owned and conducted a business which was or included that of being belt and buckle manufacturer or distributor, which business had been begun by Mr Georgiou senior. Within a year of its setting up (the date for which does not appear but which was probably 1981 or earlier) two sons and one son-in-law of Mr Georgiou senior became shareholders in the company. By the time with which this appeal is concerned the capital of the company was divided equally, one third each, between A ordinary shares, B ordinary shares and C ordinary shares. It may well have been so divided from the moment when those three became shareholders. The articles contained provisions so that the balance between those three classes of shares which were respectively held by the two sons and the son-in-law should be broadly preserved between those three branches of the family. There was, for example, to be an A director, a B director and a C director, each appointed and generally to be removed by the corresponding class of shareholders. There was an express provision whereunder a director might:-
" hold and be remunerated in respect of any office or place of profit under the company".
"the reason being that this department does not consider you to have held employees status with [the company]"
"the first question which the tribunal is very likely to wish to consider is whether there is or has been a genuine contract between the company and the shareholder. In this context, how and for what reason the contract came into existence, (for example, whether the contract was made at a time when insolvency loomed and what each party actually did pursuant to the contract are likely to be relevant considerations"
"there is no doubt that a contract of employment was issued in respect of each applicant signed by one of the other directors. It is said by the three applicants that they were employees, that none of them had overall control, that any two could dismiss the third and that were therefore employees entitled to a redundancy payment when the company went into liquidation".
"In evidence, Mr G Georgiou admitted that towards the end when the company was in difficulty, the directors did not take their full salary but the most important and in the Tribunal's view the decisive factor was that the an [sic] overdraft guaranteed by way of debenture secured by all three applicants personally. In the Tribunal's view, this indicates that there was no separation of the applicants as employees and the company.
It is clearly not normal for an employee to put his house an [sic] property at risk in favour of his employer's business".
In all the circumstances therefore we find that the applicants were not employees and their entitlement to a redundancy payment must be rejected".