Alexander Semenoff had previously been an employee of Stan Semenoff Transport Ltd, part of a group of companies owned by his father. In 2021, the arrangement changed. The company took him off payroll and instead began making fortnightly payments to a company associated with him, for services he provided across the wider group.
That continued until the company told him it was under cashflow pressure and reviewing its spending. It said he hadn't done any work for the company in the past 12 months despite the ongoing payments, and it stopped paying him with immediate effect. He raised a personal grievance for unjustified dismissal and asked to be reinstated. The company's position was that he wasn't an employee at the relevant time, and that there was no role to reinstate him into anyway.
What was argued
Alexader said the change to how he was paid in 2021 was an administrative shift that didn't reflect the real substance of what he did. He said the payments and other benefits he received weren't family support, they were payment for real work he did across the father's companies, and that he'd never operated as an independent contractor: no invoices, no negotiated commercial terms, no commercial risk carried.
The company said the 2021 change reflected an actual shift in the relationship, from employee to contractor. It said the payments to his company weren't purely commercial, they were partly intended to support him and his children. And it said he'd left to run his own ventures and hadn't done employee-type work for the company since 2021.
What the Authority found
The Authority worked through the real nature of the relationship rather than just the label either side used. Some of its key findings:
- The fact he'd previously been a payroll employee showed the parties had turned their minds before to what employment actually looked like between them.
- It was more likely the payments to his company served a dual purpose, family support and payment for contractor-type services, rather than being employment income.
- The benefits he received appeared better than market value, largely because he was the owner's son.
- The relationship between him and his father had become strained, and it was unlikely an employment relationship would have survived some of what had happened between them.
- The contractual rights and obligations between the parties didn't look like an employment relationship. Where the company had influence over him, that was mostly down to shared commercial interests, not an employer's authority.
- He'd described himself as an Operations Manager, which pointed toward some integration into the company, but he'd also explained that title as useful for his own commercial purposes as a contractor.
The Authority concluded he wasn't an employee of the company at the relevant time, which meant it had no jurisdiction to hear his claims at all.
What this means if you employ family
Family businesses often run on relationship and trust in a way most workplaces don't, and that's exactly why arrangements with family members drift into grey areas that a written agreement would have settled from the start.
This case turned on the Authority having to reconstruct, after the fact, what the parties actually intended, from payment patterns, job titles, and how the relationship played out. That's a hard place to be arguing from, on either side of the relationship.
If you have a family member working in, or for the business under an arrangement that's more habit than agreement, a few things are worth checking. Decide clearly whether they're an employee or a contractor and make the paperwork match. If they are a Director and shareholder there are some extra considerations to also factor.
If you're providing financial support to a family member separately from what you're paying them for work, keep the two clearly apart rather than blending them into one payment. And if someone's job title suggests they're integrated into the business, like an Operations Manager, be aware that can work against a contractor arrangement if the relationship ever ends up in dispute.