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Autumn News
I Only Work Here
Employees have rights, including a claim on the National Insurance fund for notice pay, holiday pay and statutory redundancy pay if their employer goes bust. But what about directors? What about the controlling shareholders of a small business? Can they wear the worker's hat as well as the employer's? The widely held view has been that they couldn't - the boss or owner would not have the same rights as the workers.In a recent case, the Court of Appeal has held that it is possible for such a person to be an employee. They will have to have a contract which says that they are, and they will have to have behaved in accordance with that contract - it must not be a sham. If it's disputed, the Tribunal will have to consider whether the evidence points to employment or not.
This may not help the owners of all small businesses, because it does depend on how you have operated. However, directors pay National Insurance Contributions, so it's not unreasonable that they should acquire some rights to claim. It's worth thinking about if the worst happens to your company.