Being paid is not essential for employment status

In Secretary of State for Business Innovation and Skills v Knight, the EAT has held that someone can still be an employee for the purposes of employment law even if they have not exercised their rights to be paid remuneration. In this case, the managing director and sole shareholder of a company had elected not to be paid for two years to attempt to keep the company afloat but she nonetheless remained an employee and therefore entitled to redundancy payment from the Insolvency Service under section 166 of the Employment Rights Act.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.