Stack v Ajar-Tec Ltd - Employment contract can exist despite no agreement on wages [2011] EAT

A contract of service, or for services, can in principle exist even if the parties have not agreed the amount of remuneration - a term can be implied that the employee will be paid for work done on a quantum meruit basis.

Mr Stack was one of three shareholders and directors of Ajar-Tec Ltd. He claimed to also have been an employee of the company, and to have been constructively dismissed in September 2009 - and on this basis presented a claim for unfair dismissal in the Watford Employment Tribunal.

Following a Pre-Hearing Review (PHR), Employment Judge (EJ) Mordsley ruled that Mr Stack was neither an "employee" to enable him to bring a claim under ERA 1996, Pt X, nor a "worker" (for a claim under ERA 1996, Pt II). Although he had been working full time at times, there was no written agreement as to his employment (which was not in itself decisive), there was no agreement as to any level of wages (as opposed to directors' fees and dividends) and the conduct of the parties was such as to indicate that he was neither employee nor worker.

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