In a case in the Court of Appeal which Lord Justice Tomlinson said was "not a good advertisement for our system of resolving employment disputes", Stack -v- Ajar-Tec Limited, Mr Stack was held to be an employee and a worker and able to pursue constructive unfair dismissal and deduction from wages despite never having had a Contract of Employment and having worked without pay or asking for pay for a number of years. Mr Stack, a shareholder and director brought business skills to the business and from a period of time after its formation it was found that he operated at about 80% of full time on the company's business. This case demonstrates the importance of clear written agreements between shareholders and directors.
The case has been ongoing for nearly 3 years and has already had 1 trip to the Court of Appeal. There were enormous evidential difficulties in trying to interpret what the parties specifically agreed and what they had not, but on the second outing to the Court of Appeal the Court held that there was sufficient evidence to find in law an employment contract. The company conducted themselves as if a service agreement was in place. The use of implied terms (when there is no express verbal or written agreement) can still lead to an outcome such as this. I haven't calculated how many Judges sitting in the two Employment Tribunals, the two Employment Appeal Tribunal hearings, and the two Court of Appeal hearings actually dealt with this case, but if any bright law student wants to count them up and tell me I would love to hear. For further information please contact [email protected]
