The position of "company director" is an "office" not an employment. A director may be an employee as well as being a director but this is not automatic - indeed it is common practice for companies to have non-executive directors who are not employees, have no service agreement and no employment relationship of any sort with the company.

It is worth noting here that the fact that a person claiming to be an employee is the controlling shareholder of a company and ultimately has the power to prevent his own dismissal does not prevent him being an employee ( Sec'y of State (DTI) v Bottrill 1999 ICR 592, CA).

The question of whether a director is an employee can be particularly relevant when a company goes into insolvent liquidation as those who count as employees may then be able to claim on the National Insurance Fund for compensation for unpaid wages and some other benefits and the fact that a person is also the controlling shareholder of the company by which he is employed does not of itself prevent him being an employee for the purposes of the unfair dismissal legislation (see Connolly v Sellars Arenascene Ltd CA 2001 ICR 760, Court of Appeal and/or Secretary of State for BERR v Neufeld & Anor CA 2009 ICR 1183 on 2nd April 2009).

See also Insolvency/government guarantees on insolvency of employer and/or Company Directors/shareholder in insolvent company and/or Employee/definition of .