Claimant v Glam Candy UK Limited
Outcome
Individual claims
The respondent conceded that the redundancy process outlined in the ET3 was a sham. No genuine redundancy situation existed, no consultation took place, and the claimant was not fairly selected. The respondent provided no alternative fair reason for dismissal under Section 98. In the absence of a fair reason, the tribunal found the dismissal on 4 December 2023 was unfair in law.
The claimant was employed on 1 and 4 December 2023, the only working days before her dismissal. She was not paid for these two days. The tribunal ordered payment of £307.69 gross for these unpaid days.
The claimant's contract entitled her to three months' notice. She was not paid notice pay on termination. Based on her annual salary of £40,000, the tribunal ordered payment of £10,000 gross representing three months' contractual notice pay.
The tribunal found the claimant had taken only 6 working days of holiday in 2023 (the Val D'Isere trip). She was entitled to 25 days per year, leaving 19 days accrued but untaken annual leave. The tribunal ordered payment of £2,923.15 gross for accrued untaken holiday.
Facts
The claimant co-founded a beauty education business in 2011 and was majority shareholder until June 2023 when she sold her shares to Mr Thompson. She continued working in marketing. In December 2023, Mr Thompson removed her as director and sent a sham redundancy letter terminating her employment. The respondent argued she was never an employee, only a director/shareholder. The tribunal heard evidence about her contract of employment issued in 2020, her payment through PAYE, her regular hours worked, her integration into the business, and the control exercised over her by the respondent post-sale of shares.
Decision
The tribunal found the claimant was an employee throughout her service from 2011 to dismissal in December 2023, including the period when she was majority shareholder. The respondent failed to prove the contract of employment did not reflect the true relationship. The tribunal found the irreducible minimum of control, personal service, and mutuality of obligation existed. The dismissal was unfair as the respondent conceded the redundancy was a sham and provided no other fair reason under s.98 ERA 1996. The claimant was awarded basic and compensatory awards, notice pay, unpaid wages, and accrued holiday pay totalling £51,643.84.
Practical note
A majority shareholder and director can simultaneously be an employee if the contract, PAYE payment, working arrangements, and conduct are consistent with employment status, and control passes to another after share sale.
Award breakdown
Award equivalent: 67.1 weeks' gross pay
Legal authorities cited
Statutes
Case details
- Case number
- 4100541/2024
- Decision date
- 8 November 2024
- Hearing type
- full merits
- Hearing days
- 3
- Classification
- contested
Respondent
- Sector
- education
- Represented
- Yes
- Rep type
- lay rep
Employment details
- Role
- Marketing role / senior management
- Salary band
- £40,000–£50,000
- Service
- 12 years
Claimant representation
- Represented
- No