Claimant v Savage Cabbage Limited
Outcome
Individual claims
The tribunal found that clause 7 of the contract, when interpreted in context, did not cover business interests held prior to the contract's execution. The respondent was aware of the claimant's interest in Little Fish Labs Ltd before the contract was signed. It made no commercial sense to require advance written permission for pre-existing interests. Therefore, the dismissal was not for a fair reason under s.98 ERA.
The tribunal found the respondent was not entitled to dismiss the claimant without notice under clause 7. The claimant's interest in Little Fish Labs Ltd did not constitute a breach justifying summary dismissal. Therefore, the dismissal without notice was a breach of contract, entitling the claimant to two months' notice pay.
Facts
The claimant founded and worked for a CBD wellness company from 2016. In September 2023, she sold her shares to Cannim Group and continued as CEO under a new contract she drafted. She was also a 75% shareholder and director of Little Fish Labs Ltd, a separate company. After disputes over the share purchase agreement arose in mid-2024, the claimant was dismissed in September 2024 for allegedly breaching clause 7 of her contract by holding an undisclosed business interest in Little Fish Labs. The respondent argued this justified summary dismissal.
Decision
The tribunal found the dismissal unfair and wrongful. Clause 7, when interpreted in context and with commercial common sense, could not apply to business interests held before the contract was signed, especially where the employer was aware of those interests. The respondent had knowledge of the claimant's involvement in Little Fish Labs before the contract was executed, so dismissing her for this reason was neither a fair reason under s.98 ERA nor justified summary dismissal. The claimant was awarded £125,053.50 for unfair dismissal and £12,062.16 for wrongful dismissal.
Practical note
A restrictive covenant requiring advance permission for business interests cannot fairly be applied retrospectively to pre-existing interests known to the employer at the time of contracting.
Award breakdown
Award equivalent: 59.4 weeks' gross pay
Legal authorities cited
Statutes
Case details
- Case number
- 6020927/2024
- Decision date
- 27 November 2025
- Hearing type
- full merits
- Hearing days
- 2
- Classification
- contested
Respondent
- Sector
- healthcare
- Represented
- Yes
- Rep type
- self
Employment details
- Role
- CEO
- Salary band
- £100,000+
- Service
- 8 years
Claimant representation
- Represented
- No