A Cohen v Sixmen Ltd (in voluntary liquidation) and The Secretary of State for Business, Energy and Industrial Strategy: 6004854/2026
EMPLOYMENT TRIBUNALS
Case No 6004854/2026
Between
Alison CohenClaimantSixmen Limited (in voluntary liquidation) (R1) The Secretary of State for Business, Energy & Industrial Strategy (R2)Respondent
Before
Employment Judge N WilsonIn person for claimantDate 10 July 2026
JUDGMENT
[1]The Claimant was not an employee of Sixmen Limited at the material time.[2]The Claimant’s claims for redundancy pay and holiday pay are dismissed. Page 1 of 12
REASONS
[1]The claimant issued her ET1 on 4 February 2026. ACAS EC started on 28 January 2026 and ended on 4 February 2026.[2]She brings a claim for redundancy pay and holiday pay. In her ET1 she asserts she has been the only employee of the business since November 2023 and that her dismissal was on 31 October 2025. She had business premises from which she operated. The impact of the Covid 19 pandemic caused her to move to an online business from home where she was the sole employee.[3]The first respondent (the claimant’s former business of which she was the Sole Director) is in voluntary liquidation (since 7 November 2025). The second respondent is the Secretary of State.[4]Whilst the Secretary of State accepts in principle someone who is a Director and shareholder can also be an employee under a contract of employment, it is disputed that on the facts of this case the claimant was an employee within the meaning on Section 230 (1) of the Employment Rights Act 1996 (‘ERA’).
Preliminary
[5]I had a 178-page hearing bundle including the index and a 95-page case authority bundle which I checked all parties had access to. Before we heard evidence the claimant stated had filed and served a witness statement bundle on 14 May 2026 by email which neither I nor the second respondent’s representative was aware of. Having checked the case file, it transpired the claimant had indeed uploaded her witness statements. In total the statements are only 5 pages long and I gave the respondent the time to read them and to confirm whether they needed any further time before we hear evidence. I also read the witness statements. Ms Riezzo was happy to proceed once she had read the statements. I explained to the claimant that there is limited weight I can place on the evidence of those witnesses who are not present to have their evidence tested orally.[6]No adjustments were requested for the hearing. The hearing was listed for 3 hours and as such we had time to hear the evidence and submissions only which is why the decision was reserved.[7]I heard sworn evidence from the claimant and submissions from both parties. Page 2 of 12
Findings of fact
[8]My relevant findings of fact are as follows. I carefully considered all the evidence referred to in the bundle and the oral evidence given to me in so far as it is relevant to the issues I have to decide on, even if I do not mention it. I refer to such of the oral evidence as is necessary to explain my decision only. References to page numbers are to the bundle.[9]The claimant was the sole Director of Sixmen Limited. The company ceased trading in November 2025. The company ran into financial difficulties from the start of the Covid 19 Pandemic in 2020 and suffered a drop-in turnover.[10]The claimant closed her shop premises from which she operated the business in November 2023 but continued to operate online from her home.[11]At the time she closed her shop premises the business had made its employees redundant. When she moved the business online it operated from her home from November 2023. She had some adhoc help from former staff, but her evidence was that most of the time from November 2023 she was on her own.[12]The company was incorporated in September 2003, but the claimant opened the shop in March 2004. To begin with she had one lady wo worked for her. By June 2024 she had another lady working for her until she retired in 2023. The claimant also employed a Saturday girl and when she opened another unit she had another member of staff. In all she had employed 4 staff members over the period the shop was open based on her evidence.[13]All those employed during this time were recruited by the claimant and were given a standard employment contract. They were all paid via PAYE as was the claimant.[14]The claimant was the 100% share holder of the company. She accepted in evidence she was the only person with control over the business. The claimant was at all times the sole Director exercising sole financial control including how funds were received into the business bank accounts.[15]The claimant drew dividends from the business but not regularly until the Covid 19 pandemic at which point those drawings ceased. At this time her accountant advised her to take a loan payment rather that dividends (because of the impact the pandemic had on the business’ finances). Prior to this she was not taking dividends regularly but gave evidence that it was when there was a profit.[16]Her statement of affairs (at page 79) sets out unsecured loans of £56,762.41 under the summary of the company liabilities. However, at page 80 there is the company creditors list, and the claimant is not on the list of creditors. Page 3 of 12[17]The claimant first spoke to an insolvency practitioner in around September 2023. She first realised she would have to close the business at the beginning of 2023, but she thought she could pay the bills with the stock she had. She thought if she closed at the end of August, she would have been through her busiest season and be able to pay all her bills and close down. During August it became apparent that she was not going to be able to pay everyone and was advised to go insolvent. This was largely due to a bounce back loan she was repaying which was a significant monthly payment.[18]She went to meet with insolvency practitioners on 29 September 2023.[19]The claimant was unable to be clear in evidence about the last day of her employment nor when her role as an employee of the business ended. She refers to 2 dates in her ET1; one as the 25 September and the other as the 31 October. Her last pay date was 31 October 2025. That was the date of her final monthly pay. She was receiving £758 pe month because she says this was the maximum Director’s pay she could receive. During the last tax year of the business she realised she had underpaid herself and was able to pay herself more to use up her annual allowance for the last couple of months. She states she was given advice by her accountants to pay herself the maximum per month that she could as a Director and to use her annual allowance for the year to be tax efficient.[20]The claimant has submitted her payslips from April 2024 until November 2025. There are missing payslips for September and October 2025. There are company bank statements disclosed also for October 2024 until September 2025.[21]The claimant’s evidence regarding her employment contract was that she did not think she had to have one and she agreed that as a small business owner she did ‘take on everything’. Whilst her role may have changed over time given in her own words ‘the world of the internet’ she was responsible for most things on balance associated with operating a small business. This however evolved over a period of time as the business ceased to employ others. She had a shop manager at the time of having the shop premises. The claimant was unable to articulate what her specific roles and responsibilities were as an employee that were distinct from Director’s duties. Her oral evidence was that she completed every task within the business and stated she was the Director. She could not articulate her specific responsibilities. It is clear that, in her own words, from the start of the business she had full involvement in every aspect of the business and it is clear that evolved after the pandemic and certainly once the shop closed in 2023. Her role from 2020 appeared to however largely be on how to keep the business from closing and/or from operating as long as she was able to in order to try and pay off the company debts before having to consider closing.[22]The claimant worked from home for the last 2 years of the business. She had no defined hours of work. She stated she was working ‘24/7’. Sometimes she Page 4 of 12 was not busy and would not work at all and sometimes she would be working until midnight.[23]It is clear there was a difference in how she worked pre and post Covid 19 pandemic. Prior to the pandemic she was in the shop 3 days a week and worked from home 2 days a week and she worked 9 am – 5 pm. Her witness statements from other employees confirm that during this time she worked in a number of different aspects of the business. I am careful as to the weight I attach to these statements as the makers are not here to give oral evidence and for their evidence to be tested. I also take note they largely say what the claimant did before the shop premises closed. Post pandemic, that is from 2020 onwards, the claimant was focused on trying to make the business survive the financial losses that occurred as a result of the pandemic.[24]She had no time off from 2020 including any annual leave. The Director’s questionnaire completed by the claimant for the insolvency service also clearly sets out that she ‘was responsible for every aspect of running a small business’. Whilst she says she was entitled to paid holiday (28 days per year) she did not have time off aside from either 2 or 3 days since November 2022. She did not give herself notice of any redundancy when closing the business.[25]The claimant confirmed in evidence she did not have contracted hours of work. Whilst she may have had some regular working pattern pre pandemic, on her own evidence this all changed from 2020. She had no supervision or guidance from anyone. She had an accountant and bookkeeper. There was no one she could refer any grievance to nor was there anyone she had to report in sick to.[26]Her income of £758 per month was the maximum that Directors were able to receive for a small business. The claimant states this was set based on her accountant’s advice but ultimately the decision about how much and how she was to be paid was the claimant’s. She also received a monthly loan interest payment of £627 so her evidence is that her monthly salary was £1385.[27]It is clear that as an employee this would fall below the national minimum wage. She confirmed in evidence she was aware of this. She was happy to accept this she stated because she was also able to receive dividends to essentially top up this income.[28]Her P60 for 2025 shows her income was £9100 for the tax tear to 5 April 2025. This exact same amount is mirrored in the company’s financial statement for the year ending 31 January 2024 as Director’s remuneration. I find this evidence points to the claimant receiving a Director’s salary of £758 per month not an employees salary particularly where she states this was agreed by her due to her accountant’s advice as it was tax efficient and that she could top it up with dividends. This is clearly an arrangement beneficial to her as Director and owner of the business.[29]This is also supported by the claimant being in control of how and when she was paid and on occasions delaying or missing payment of her income when for example the company had bills to pay or had issues with cash flow. The Page 5 of 12 claimant did not pay herself during the last couple of months before the business became insolvent. It is evident from her oral evidence that she also delated payments to herself where it was in the financial interests of the business.[30]The claimant was also making loans to the business as is demonstrated by her bank statements. She was in her own words ‘always juggling money’ and would loan the company money and sometimes she would be able to repay that loan back to herself but sometimes she would not. She claims she is owed circa £56,762 in loans.[31]The claimant’s oral evidence was lacking in clarity with regards to what she precisely did from home once the shop closed and her business moved online.
Legal Framework
[32]What is an employee?[33]Under section 230(1) of Employment Rights Act 1996 (“ERA”), an employee is defined as: “an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment”.[34]Under section 230(2) of the ERA a contract of employment means “a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing”.[35]In Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, McKenna J set out the conditions required for a contract of service, namely that:“(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master. (iii) The other provisions of the contract are consistent with its being a contract of service.” Page 6 of 12[36]The importance of the test set out in Ready Mixed Concrete was affirmed by the Supreme Court in Autoclenz Ltd v Belcher and others [2011] ICR 1157. The ‘irreducible minimum’ for a contract of employment comprises:a. Control;b. Personal performance; andc. Mutuality of obligation.[37]The key factors to be taken into account in determining whether an individual is an employee are:- -The degree of control that the employer has over the way in which the work is performed; -Whether there is mutuality of obligation between the parties – i.e. was the employer obliged to provide work and was the individual required to work if required; -Whether the employee has to do the work personally.[38]However, even if the irreducible minimum is met, that is not definitive. The existence of the above three elements does not mean that a contract of employment actually exists only that it potentially does. Additionally, the individual must be sufficiently integrated into the employer’s organisation and must not be carrying out the work on account of their own business. It is necessary to then look at all the other relevant circumstances which must be consistent with there being an employment relationship. Those relevant circumstances, factors, will vary from case to case but can include: -The intention of the parties; -Custom and practice in the industry; -The degree to which the individual is integrated into the employer’s business; -The arrangements for tax and national insurance; -Whether benefits are provided; and -The degree of financial risk taken by the individual.[39]A check list approach should not be adopted in relation to other factors, and the Tribunal must stand back from the accumulated detail and consider the overall picture. Page 7 of 12[40]When deciding questions of employment status, a Tribunal can look beyond what is written in the contract between the parties and consider how the relationship worked in practice (Autoclenz). It is necessary to consider all circumstances of the relationship and to go beyond any labels which the parties apply. Naturally, this means that the wording in any document and the assumptions made by the parties will only be part of the matters to be considered when making a determination. The test is not ‘what was the claimant called’ or ‘what do the documents label the parties’ or ‘what did the claimant think they were’.[41]There is no single test concerning how to determine a person’s employment status. Each case falls to be determined on its own particular facts and often there are factors pointing in each direction which complicate the determination. The usual approach requires all aspects of the relationship to be considered.[42]I considered the guiding principles in the above-mentioned established cases and Secretary of State v Neufeld and Howe [2009] EWCA Civ 280.[43]The issue of where a Tribunal is faced with deciding whether a majority shareholder has ‘employee’ status was discussed in Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld and another case 2009 ICR 1183, CA, where the Court of Appeal made the following modifications to the eight factors identified by the EAT in Clark v Clark Construction Initiatives Ltd and anor 2008 ICR 635, EAT; first factor: where an individual’s employment status is in dispute, the court or tribunal must be satisfied that any relevant document is a true reflection of the claimed employment relationship, and for this purpose it will be relevant to know what the parties have done under it. The alleged employee may, therefore, have to do rather more than simply produce the contract itself, or a board minute or memorandum purporting to record his or her employment sixth factor: the EAT may have overstated the potential negative effect of the terms of the contract not being in writing. While this was an important consideration, if the parties’ conduct pointed to the conclusion that there was a true contract of employment, tribunals should not seize too readily on the absence of a written agreement to justify rejecting the claim seventh and eighth factors: loans, guarantees and the existence of a controlling shareholding would ordinarily be irrelevant but ‘never say never’ is a wise judicial maxim. 44.The Court in Neufeld commented that the fact that a controlling shareholder/director does not draw his or her salary could point against the existence of a contract of employment if his or her remuneration had been irregular. However, if he or she was contractually entitled to a salary, the fact that he or she did not take it could not retrospectively diminish this right. Page 8 of 12
Conclusions
[45]The burden of proving employment status is on the claimant.[46]She has no written contract and gave no evidence about the terms of any implied contract nor what were her asserted contracted hours were for which she was expected to be paid.[47]The claimant’s witness evidence does not really address issues regarding the substantive working relationship save to state she was involved in every aspect of the business from the beginning of the business. Significantly no cogent oral evidence was heard about her responsibilities and obligations as an employee after the Covid 19 pandemic period and certainly after the shop premises closed. In oral evidence she was only able to refer to sales being something she was involved in to distinguish what she was doing prior to the shop closure that was separate from her Director’s role. I do however take account of the examples she gave in her written statement which were not challenged but are largely examples from when there was a shop premise. Control and supervision.[48]From the beginning of the business, it is clear there was no supervision of her work. She was involved in ‘everything’. She had no clearly defined role or responsibility even when she did have a shop and there were employees of the business. From 2020 the claimant’s regular working hours changed due to the Covid pandemic to working whenever and however she needed to in accordance with the needs of the business. There were days she states she did no work and there were others she worked until midnight albeit she was not clear what that involved. No one controlled how she worked, where she worked nor her hours of work.[49]There was no evidence of there being any limitations on when she could take holiday. Indeed, in line with the needs of the business, she did not take holiday for the last 2 years of the business (save for 2 or 3 days). This points away form her being entitled to any contractual 28 day holiday as asserted.[50]She had a high degree of financial control including over how she received income and whether she received it at all. She stopped receiving income during periods when the business was struggling financially. She agreed to take an income up to the maximum permitted for Director’s for tax purposes (meaning she was being paid less than the equivalent of the national minimum wage) and towards the end of the business delayed and/or missed her income payments entirely during some months. I am not persuaded she was contractually entitled Page 9 of 12 to a salary as an employee as opposed to a Director’s salary /fee which benefitted the company for tax purposes. The reasoning for how the payment was calculated, the fact it fell below minimum wage and that she topped it up with dividends when she chose to points away from employee status. I cannot reasonably conclude she was being paid for working a minimum number of hours for the business for example based on her evidence. Personal performance[51]There was no evidence put forward to support a requirement of personal performance. Indeed, there was no cogent evidence form the claimant about what her specific role(s) as an employee was post pandemic which she was employed to perform herself.[52]There was no evidence from which I can reasonably make any positive findings about whether the first respondent could oblige the claimant to work personally or not. Mutuality of obligation[53]When assessing the mutuality of obligation between the claimant and the first respondent I must consider if there was an obligation on the employer to provide work and on the employee to accept and perform the work offered. As noted in relation to control above, little evidence was put forward in this respect by the claimant. It is reasonable to conclude that the claimant chose when and how to work even when she had the shop premises. I accept that at times after the pandemic the claimant worked long hours, but consider that this was a matter of choice, as a Director and sole shareholder of the business because she naturally would have had a financial interest in the business surviving the financial difficulties it found itself in from 2020 onwards. She herself stated she worked to pay off the company’s debts before closing the business. This is on balance inconsistent with employee status. I cannot reasonably conclude that the first respondent was expecting the claimant to work a number of hours and to be paid for that time[54]The claimant places emphasis on the fact she was paid through PAYE like the other employees of the business. There can be any number of legitimate reasons for the claimant to have been paid this way. Indeed, it is telling that her payments were fixed to the threshold that a Director could receive and was done for tax efficiency. The claimant’s salary was clearly able to be delayed or increased (where for example she realised she had not used the threshold for the year permitted for Directors) and in fact she was not being paid the national minimum wage but was content with this as her salary was topped up by dividends essentially. All of this is inconsistent with an employee relationship where one would ordinarily expect a) the national minimum wage to be paid b) agreed contractual working hours – express or implied and c) consistent Page 10 of 12 monthly salary. I cannot reasonably conclude that the first respondent was obligated to pay the claimant a salary as an employee.[55]There is no written contract of employment. I have to look at the reality of the relationship between the first respondent and the claimant. The claimant was unable to articulate what any implied terms of her employment were in the absence of any written contract. She had no defined role even before the pandemic and was involved ‘in all aspects of the business’ but was unable to say how that was different to a) that of her role as a Director and b) the employees who were employed to do specific roles. She had no contractual hours. There were inconsistencies with her evidence about the hours she worked; there being a reference to working both 80 hours per week and 48 hours per week. In any event her oral evidence was also unclear in this regard. What was clear is that she worked as required at her own discretion. There were clearly times she had nothing to do. There was no obligation on the first respondent to provide work for her to do. She did not take holiday during the last 2 years of the business operating save for 2 or 3 days. Despite saying she was entitled to 28 days leave she did not engage this. Once the shop closed, she did what was needed to try and pay off the debts of the business before it closed but was unable to do that. She had an inconsistent pattern of remuneration particularly for the last two years of the business.[56]The claimant personally funded the company. She operated a Director’s loan account. She gave some limited examples of what she did as evidence of being an employee (sales, serving customers in the shop and unpackaging deliveries and cleaning) ) these were limited to tasks within the shop premises whilst she had the shop. I am not satisfied given the lack of cogent evidence about her roles and responsibilities after the shop closed, her not being supervised by anyone, being in control of her own working hours and not being managed or supervised on a day-to-day basis that (when taken into consideration alongside all the other relevant factors and findings) that the claimant was an employee of the respondent.[57]She argues she was the sole employee of the business after the shop premises moved but there was a lack of cogent evidence about the nature of the relationship after this time. After the shop closed in fact her working pattern and income became even more inconsistent with the concurrent financial difficulties the first respondent found itself in.[58]I find on balance if any employee status existed that it ceased arguably once the business started to experience financial difficulties and started to make all its employees redundant and certainly by the time the shop closed in November 2023. After this time the claimant’s evidence was lacking clarity about her roles and responsibilities; she clearly had no regular working pattern, she was not supervised or managed in anyway, she had full financial autonomy and control over whether she would be paid or not, and the first respondent was not obligated to provide her with work to do for a minimum amount of hours per week and to pay her for that work. All of this is inconsistent with employment status. Page 11 of 12[59]Accordingly, I do not find the claimant was an employee of the first respondent from November 2023 onwards and the claim is accordingly dismissed.