UK: England and Wales: stay of proceedings - the director/shareholder as employee

Earlier this year, in Neufeld v A & N Communications in Print Ltd & Secretary of State for BERR [2008] UKEAT 0177_07_1104, His Honour Judge McMullen QC held that a 90% majority shareholder was an employee for the purposes of Section 230 of the Employment Rights Act (1996). As such the shareholder qua employee was able to benefit from Section 182 of the 1996 Act following the company's insolvency in order to claim redundancy, notice and holiday pay from the Secretary of State (the payments coming from the National Insurance Fund).  

The Secretary of State appealed. The Court of Appeal will hear the appeal in early December. Meanwhile, a stay of all proceedings concerning "the circumstances in which a director and majority shareholder of a company may be regarded as an employee for the purpose of a claim against the Secretary of State pursuant to Section 182 of the Employment Rights 1996 as statutory guarantor for certain categories of debts owed to employees, but unsatisfied on the insolvency of an employer" has been announced pending the Court of Appeal's decision. Click here for further information.  

Note: HHJ McMullen QC relied upon the guidance provided by the President of the Employment Appeal Tribunal in Clark v Clark Construction Initiatives Ltd & Anor [2008] UKEAT 0225_07_2902 (noted here).