Chapman v Chapman Spooner Ltd (In Voluntary Liquidation) & Anor [1996] UKEAT 979_95_0210

EAT

Chapman v Chapman Spooner Ltd (In Voluntary Liquidation) & Anor

[1996] UKEAT 979_95_0210 · 1996-10-02

JUDGE CLARK:

Mr Chapman ("the Appellant") joined Chapman Spooner Ltd ("the Company") in January 1975; initially owning 6% of the shares in the Company. When the Company went into liquidation in December 1994 he owned 51% of the shares. He and his wife were the only directors. The remaining 49% shareholding was held by a Mr Wetton, who was effectively the financial backer of the Company.

From the outset the Appellant received regular remuneration, and tax and National Insurance contributions were deducted at source under the PAYE system. His remuneration was reduced in September 1993. He belonged to the same pension scheme as his staff; he received no directors' fees; there was no written contract of service, nor board minutes evidencing such a contract.

After the Company was put into creditor's voluntary liquidation, following a decision made presumably by the Appellant and Mr Wetton, he applied to the Employment Department for a redundancy payment. The Department accepted that the Company was insolvent, but did not accept that the Appellant was an employee of the Company within the meaning of Section 153(1) of the Employment Protection (Consolidation) Act 1978. A redundancy payment having been refused, the Appellant complained to an Industrial Tribunal. That complaint was heard by the Birmingham Industrial Tribunal on 6 July 1995. It was dismissed. The Tribunal held that he was not an employee. Full reasons for that decision are dated 25 July 1995.

Against that decision the Appellant now appeals. In advancing the appeal, Professor Ritson has suggested that further facts could have been put before the Industrial Tribunal which might have had a material influence on its conclusion. If so, that chance has been lost. It is not our role to permit a second bite of the cherry. He does not challenge the Tribunal's findings of fact contained in paragraph 3 of their reasons. Nor does he dispute the Tribunal's finding that those factors point against the Appellant being an employee. Nor is he in a position to challenge the Tribunal's finding of fact at paragraph 4 of the reasons in these terms:

"The tribunal concluded that the applicant had virtually complete control of the company was under no effective control by a board of directors or anyone else."

We say that because of some of the answers which the Appellant gave in response to the Department's questionnaire on Form RP21(Dir) in particular;

"19. How did you spend a normal working week?

Handled customers, supervised staff, dealt with parts, service & sales. General Office duties. Basically ran the company.

21. Were you subject to control or guidance?

No.

26. What was your shareholding in the company?

51 per cent."

Ultimately Professor Ritson accepted that the question in this appeal was whether it could properly be said that this Tribunal decision that the Appellant was not an employee was perverse, in the sense that it was an impermissible option. See Piggott Brothers Ltd v Jackson

[1991] IRLR 309

We have no hesitation in concluding that this Industrial Tribunal decision cannot be characterised as perverse, and that accordingly we have no jurisdiction to interfere with that decision. The appeal must be dismissed.

Before parting with this case, we should observe that we have been referred to and have considered the judgment of this Appeal Tribunal, Mummery J. presiding, in the appeals of Buchan & Ivey v Secretary of State for Employment (unreported)

EAT/770/95

and 1291/95 29 July 1996. Cases in which leave to appeal to the Court of Appeal has been given. We do not consider it necessary for the purposes of determining the instant appeal, to apply what we take to be that Appeal Tribunal's negative answer to the specific question which it posed itself at page 2F of the transcript, namely:

"... whether a tribunal can ever be legally justified in concluding that a majority shareholder of a company is an employee of the company."

We have decided this case on the particular facts as found by the Industrial Tribunal and the conclusion which it reached based on those facts.