Meaning of employee

Individuals must be "employees" working under a contract of employment in order to benefit from the protection of most statutory rights.

Last month the Court of Appeal said that for a contract of employment to exist there must be an element of control by the employer over the work of the employee. As a result the Court held that a worker, employed through an agency to work for a single company for more than two years, could not claim to be an employee of the agency. This meant that when the agency terminated her placement after complaints from the company she had been working for, she had no right to claim unfair dismissal rights, naming the agency as her employer.

In contrast, the fact that someone is a controlling shareholder in a company does not mean she/he cannot also be an employee. The Court of Appeal has ruled that although this could be a significant factor, it did not automatically prevent the individual from having employee status.