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When is a controlling shareholder an employee?

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A different division of the EAT has agreed with Elias P.'s analysis in Clark v Clark Construction (see bulletin 29/2/08), setting out the guidance for whether a controlling shareholder of a company is also its employee.

In Neufeld v A&N Communication in Print Ltd., HHJ McMullen QC affirmed the guidance given by Elias P., holding that a 90% shareholder of a company was also its employee. Two additional points of interest arose:-

  • the date at which the individual's status is to be considered is the date of the dismissal, not the date that s/he is alleged to have entered into a contract of employment (para. 14); and,
  • the fact that the individual has offered guarantees (eg guaranteeing the company's debts to a bank)s not inconsistent with employment status (para. 30).