Ajar-Tec Limited v Stack is a reminder that the absence of agreement about remuneration is not fatal to employment status.
The claimant was one of three shareholder/directors in a company designing audio-visual systems. Only one of the three had a formal written employment contract, although the intention was that they would all become employees, with a salary of £5,000 a month. An executive employment contract was drafted but never materialised into a final agreement. Over four years later the claimant left the company and tried to bring tribunal claims for unfair dismissal and unauthorised deductions from wages.
At the tribunal stage the judge decided that the claims could not be brought because the claimant was nether an employee nor a worker. The judge's reasoning was that there was no employment contract because no specific remuneration had been agreed; he had in effect been working "to protect his investment".
The EAT and Court of Appeal decided that the case would have to start again in the tribunal, because the assumption that the lack of agreement on pay was fatal to status as an employee/worker was incorrect. Whilst the claimant would have real difficulty in establishing that a contract was in place, his argument could not be discounted altogether. The Court of Appeal also commented that the "necessity" test - used in agency worker cases to decide whether a contract of employment should be implied between the worker and the client - is probably not applicable in a case of this kind.