Appeal No. EAT/698/93
	I N T E R N A L

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 26th October 1993

	Before

	THE HONOURABLE MR JUSTICE KNOX

	MR K M HACK JP

	MR P M SMITH

MR A G BROOK	APPELLANT

SECRETARY OF STATE FOR EMPLOYMENT	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

	PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	NO APPEARANCE BY OR
ON BEHALF OF THE APPELLANT

	MR JUSTICE KNOX:  This is an appeal by Mr A G Brook from a decision of the Industrial Tribunal sitting at Cardiff on the 18th May 1992, and sent to the parties on the 10th June 1992, whereby the Tribunal decided unanimously that Mr Brook was not an employee of the Company of which he was a Director within the meaning of Section 153 of the Employment Protection (Consolidation) Act 1978.  

	It followed that his complaints under Sections 106 and 122 of the Act of 1978 fell to be dismissed.

	The only issue is whether or not that initial decision was one which reveals an error of law.  We have not had any appearance before us today, either by or on behalf of Mr Brook, and indeed attempts to make contact with him by this Tribunal have been uniformly unsuccessful.

	We have, however, read the papers with care and it seems to us that there is no error of law shown in the Industrial Tribunal's decision.  Essentially the decision was to the effect that there were two fatal barriers to the claim that Mr Brook mounted on the basis that the Company which he had been a Director of had become insolvent and therefore the Secretary of State for Employment became liable under Section 122 of the Act of 1978 for such matters as redundancy payments.  These two flaws are first that on analysis there was not such a contractual arrangement between Mr Brook and the Company as amounted to a contract of service which is a sine qua non of there being liability for making a redundancy payment.  The second was that if there was such a contract of service there was not anything in the nature of an ascertainable week's pay as required in paragraph 2 of the 4th Schedule to the 1978 Act to warrant the claim for a redundancy payment.  The essence of the arrangement between Mr Brook and the Company was that at the end of the year the trading record would be examined and if the Company had been sufficiently profitable to warrant a payment in his favour, such a payment would be treated as made, and if there were no such profits he would be paid nothing.  Indeed, that is what happened in 1989/90 where his remuneration was nil.

	In the last year in respect of which his claim in these proceedings arose, the Company went into Receivership and it is fairly evident that there was no such surplus in view as would warrant his being regarded as entitled to any particular sum by way of remuneration.  That does not fit the way in which a week's pay is defined in Schedule 14, paragraph 3(2) and because redundancy payments are geared to a week's pay, under paragraph 2 of the 4th Schedule of the Act of 1978, that state of affairs would be fatal to any claim to a redundancy payment.

	The points that are raised in the Notice of Appeal seemed to us to be directed at the proposition that if Income Tax and insured persons National Insurance Contributions have been paid that by itself is enough to establish an employer/employee relationship.  That is not right as a matter of law.  There is ample authority, notably Airfix Footwear Ltd v. Cope [1978] ICR 1210 and O'Kelly v. Trusthouse Forte plc [1983] ICR 728 for the proposition that although the Income Tax and National Insurance treatment of a person claiming to be an employee is a relevant factor, it is not by itself conclusive.  Those two cases are illustrations of the proposition that one may well get one answer for Income Tax and National Insurance purposes and a different answer for employment and, in particular, redundancy payment purposes.  The specific reason, therefore, for suggesting that there was an error by the Industrial Tribunal, which is raised by the Notice of Appeal seems to us to be misconceived.

	For those reasons we dismiss this appeal.