Mr C Lay v Easy Direct Debits Ltd and Others: 1403742/2023
EMPLOYMENT TRIBUNALS
Case No 1403742/2023
Between
Mr C LayClaimantEasy Direct Debits Ltd and OthersRespondent
Before
Employment Judge Mr P Cadney- P STRELITZ (instructed by COUNSEL) for claimant- D SEN GUPTA K.C. (instructed by COUNSEL) for respondent- MR P STRELITZ (instructed by COUNSEL) for claimant- MR D SEN GUPTA K.C. (instructed by COUNSEL) for respondentDate 30 June 2023
JUDGMENT
[1]The judgment of the tribunal is that:- 1. The claimant’s application for interim relief pursuant s128 Employment Rights Act 1996 is dismissed. (If either party seeks written reasons for the decision given orally it must apply in writing within 14 days of promulgation of this judgment) . ---1--- Case Number: 1403742/2023[2]JUDGMENT OF THE EMPLOYMENT TRIBUNAL HELD AT: BRISTOL ON: 30TH JUNE 2023 EMPLOYMENT JUDGE MR P CADNEY (SITTING ALONE) APPEARANCES:- FOR THE CLAIMANT:- MR P STRELITZ (COUNSEL) FOR THE RESPONDENT:- MR D SEN GUPTA K.C. (COUNSEL)[4]The judgment of the tribunal is that:- 1. The claimant’s application for interim relief pursuant s128 Employment Rights Act 1996 is dismissed. ---1---
REASONS
[1]This application for provision of the written reasons following the reasons given orally at the hearing on 30th June 2023 comes before the tribunal in very unusual circumstances.[2]The rules of the Employment Tribunal provide that where reasons for a decision are not reserved but given orally at the hearing itself, either party may apply orally at the hearing for written reasons. If they do not do so they may apply in writing within fourteen days of the bare judgment being promulgated. For the sake of completeness, whilst rule 60 itself does not provide a specific discretion to extend time, the tribunal has a general discretion to extend time (rule 5(7)) which is generally understood to apply in the event that an application is made outside the fourteen day time limit. However, in this case neither party applied orally at the hearing for written reasons, and nor within fourteen days of the promulgation of the judgment, or indeed at any stage thereafter in writing.[3]On 2nd October 2025 the claimant sought a transcript of the whole hearing, “In order to ascertain the extent to which the respondent has argued a contrary position in the ongoing High Court litigation.” This is slightly puzzling given that both parties were represented by counsel and both counsel produced written submissions setting out their positions in respect of the interim relief application. Whilst it was not obvious why a transcript was required, the transcript was provided, but in accordance with the Presidential Guidance the oral judgment was not transcribed. As para 15 of the PD provides, the definitive expression of the tribunal’s reasons are the written reasons if requested and issued. A request for a transcript is not the appropriate mechanism for acquiring the reasons, and a transcript has no standing as a record of the reasons. In any event if the purpose of obtaining a transcript was to determine whether the respondent had changed its position, all that would appear to be required was a record of the oral submissions to determine whether they were consistent with the written submissions, and the oral judgment would not appear to be of any particular relevance; and in any event both parties would have had counsel’s and /or solicitor’s notes of the oral judgment.[4]However, on 2nd December 2025 the claimant sought the transcription of the oral judgement, contending that he could understand the rule if written reasons had been provided, but not where they had not and/or that this represented an unusual and exceptional circumstance. By an email of the same date and for the reasons set out, the application was rejected by Regional Employment Judge Pirani. The claimant renewed his application on 10th December 2025 expressly stating that he was not seeking written reasons, but the opportunity to have access to the audio recording to produce a transcript of the judgment for the purposes of the High Court proceedings. That application was also rejected by REJ Pirani on 15th December 2025. ---2---[5]That would appear to have given the claimant two options within the ET itself; he could have appealed either or both of REJ Pirani’s decisions to the Employment Appeal Tribunal (EAT), and/or applied for an extension of time in exceptional/unusual circumstances for written reasons, and again appealed to the EAT if that application was refused.[6]The claimant, together with his wife who is also a claimant in the High Court litigation, took a third option, which was an application made in the High Court proceedings on 11th December 2025, for an order that the tribunal now produce written reasons. By an order dated 18th December 2025 HHJ Pelling KC (sitting as a judge of the High Court) made the order and has requested that the tribunal provide written reasons by 30th January 2026.[7]The order is slightly puzzling, firstly as the reasons for making the order include the conclusion that as a recording exists the oral judgement has been or can be transcribed; but the order itself is not for transcription of the oral judgement (transcription being an essentially administrative function and in any event transcription of the judgment being expressly prohibited by the Presidential PD), but the provision of written reasons, which is as set out above an entirely different judicial function. Secondly, the order itself does not refer to the fact that no application has ever been made to the tribunal itself for written reasons (or indeed that the claimant has expressly disavowed making any such application in correspondence with the tribunal, whilst at almost exactly the same time making an application for written reasons to be ordered by the High Court) or to the fact that REJ Pirani had expressly refused the applications for transcription or access to the audio recordings, and /or why the High Court had concluded in those circumstances that it was appropriate to make the order (For avoidance of doubt I obviously do not know the extent to which these matters were or were not placed before the court when the order was made). Thirdly if the application had been made to the tribunal the first question would have been whether to extend time for the provision of the written reasons. The order is silent as to whether, and if so on what basis the High Court has determined for itself to extend time or disapply the rule, but given that the order is not to consider an application for written reasons, but to produce the written reasons themselves by 30th January 2026 it is presumably at least implicit that it has done so. In compliance with the order I will assume that High Court has determined that issue itself, and have not sought to consider whether or not to extend time.[8]The reasons set out below are the written reasons following the oral judgment as given on 30th June 2023.[9]By this claim the claimant brings a number of claims including a claim for automatic unfair dismissal (S103A ERA 1996) asserting that the reason (or principal reason) for his dismissal was that he had made public interest disclosures within the meaning of s43B ERA 1996. ---3---[10]The application before me today is for an order for interim relief in the making of a continuation of a contract of employment order (s129 ERA 1996) against the first respondent. The respondent resists the application on the basis that it is not “likely” (within the meaning of s129) that the tribunal which determines the complaint will make a finding that the claimant was automatically unfairly dismissed pursuant to s103A ERA 1996.[11]There is a dispute between the parties as to whether the claimant is entitled to rely on some of the matters set out in the Claim form and/or his witness statement. They have very helpfully resolved that issue for today’s purposes by providing redacted documents for which the tribunal is grateful.[12]The law is not in dispute. The tribunal can only make one of the orders set out in section 129 if it holds that it is “likely” that the tribunal which determines the complaint will find (in this case) that the reason or principal reason fell within s103A. “Likely” in the context of s129 means that there is ”a good chance” that the tribunal will find in the claimant’s favour; and a good chance means something more than the balance of probabilities, indeed a significantly higher likelihood (Ministry of Justice v Sarfraz [2011] IRLR 562 per Underhill P). That test applies to all aspects of the claimant’s claim that may be in issue.[13]In London City Airport v Chacko [2013] IRLR 610, the EAT set out the approach to be taken in determining an application for interim relief: “[23] In my judgment the correct starting point for this appeal is to fully appreciate the task which faces an employment judge on an application for interim relief. The application falls to be considered on a summary basis. The employment judge must do the best he can with such material as the parties are able to deploy by way of documents and argument in support of their respective cases. The employment judge is then required to make as good an assessment as he is promptly able of whether the claimant is likely to succeed in a claim for unfair dismissal based on one of the relevant grounds. The relevant statutory test is not whether the claimant is ultimately likely to succeed in his or her complaint to the Employment Tribunal but whether “it appears to the tribunal” in this case the employment judge “that it is likely”. To put it in my own words, what this requires is an expeditious summary assessment by the first instance employment judge as to how the matter looks to him on the material that he has. The statutory regime thus places emphasis on how the matter appears in the swiftly convened summary hearing at first instance which must of necessity involve a far less detailed scrutiny of the respective cases of each of the parties and their evidence than will be ultimately undertaken at the full hearing of the claim.” ---4---
Background
[14]For the avoidance of doubt the matters set out below are simply taken from the documents and the Particulars of Claim. I have not heard any evidence and I am not making or purporting to make any findings of fact. They simply provide the background to enable my decision as to whether or not to make a continuation of contract of employment order to be understood.[15]The first respondent Easy Direct Debits limited (EDD) was incorporated by the claimant and his wife on the 11th June 2015.The claimant and his wife assert that they were equal 50/50 shareholders in the first respondent (the respondent asserts that this is not accurate and there was in fact a third minority shareholder but this dispute is not of any significance for today’s purposes). On the 28th October 2020 the shareholders entered into a share purchase agreement (SPA) with the second respondent by which the second respondent acquired the entire share capital of the first respondent. From that point the first respondent has been a wholly owned subsidiary of the second respondent.[16]The first respondent’s business involves offering a service to veterinary practises to assist them to receive payments from clients, particularly in respect of preventative health care plans, which allows pet owners to pay the practise by direct debit throughout the year. In its early years it fell outside the scope of requiring Financial Conduct Authority (FCA) authorisation as it was able to rely on the services of other FCA authorised businesses. The Particulars describe it as a “dashboard” in front of the payment services, with outsourced providers providing the regulated activity relating to direct debit transactions. In 2019 this position changed as the BACS payment system required sponsorship from a bank to grant direct access to the direct debit arena. In about November 2019 NatWest agreed to be the first respondent’s sponsor bank. The first respondent was thus compliant with the regulatory regime and had regulatory approval.[17]The claimant contends that his longer term vision for the first respondent was that it would obtain its own regulatory authorisation from the FCA. This had not happened at the point of the SPA and he contends that there were two non-negotiable features of the SPA, which were that the first respondent would continue on its path to regulatory authorisation, and that he would continue to run the first respondent. He contends that these terms were agreed and form part of the SPA. In pursuance of that objective, with the sponsorship of NatWest the first respondent was able in principle to acquire BACs Facilities Management status subject to obtaining the relevant FCA approval.[18]The claimant contends that whilst in general the relationship between him and the second respondent was good and the business of the first respondent was successful, that he was banging his head against a brick wall in relation to gaining regulatory authorisation for the first respondent. He contends that problems began to arise in the early part of 2021 when the second respondent refused to share ---5--- information which the first respondent needed for its FCA application. In February 2022 he was informed by the second respondent's Group Managing Director that a decision had been taken that the second respondent had a red line, and would not support the first respondent being a regulated entity. On the 29th September 2022 he was informed by the second respondents Group Mergers and Acquisitions Director that he was not to proceed with the FCA application. Thereafter there were a series of unsuccessful negotiations in relation to the potential buy back of the first respondent and/or other proposals which would have involved the claimant leaving the first respondent. Following an unsuccessful meeting on the 11th May 2023 the claimant’s employment was on the 7th June 2023 terminated with immediate effect purportedly for gross misconduct relating to decisions relating to the financial remuneration of and/ or a loan to an employee AB, and/or the interference in disciplinary matters involving AB. Claim[19]The claimant contends that the reason or principle reason for his dismissal was that he had made one or more protected disclosure.[20]Both parties have submitted detailed written submissions which I have read and taken into account, and in addition both have supplemented them by oral submissions this morning. I will not deal with every point made but will set out in summary below the reasons for coming to my conclusions.[21]Respondents Submissions - The respondent submits that there are a number of fundamental aspects of the claim, all of which are in dispute, and that on the information before the tribunal that there is not a good chance that the final tribunal will find in the claimant’s favour in respect of any of them.[22]They submit that, without submitting them to detailed analysis at this stage, that the protected disclosures in essence fall into two categories. Firstly the claimant alleges that the second respondent is in breach of the SPA. Secondly the claimant alleges that the second respondent’s failure to pursue the goal of securing FCA authority for the first respondent itself caused the first respondent to be in breach of the FCA and other regulatory requirements.[23]The respondents submits that there are factual disputes underpinning the claimant’s assertions which mean that it is not likely that the tribunal which ultimately hears the case will conclude that he had made disclosures of information tending to show any breach falling within in any of the categories of section 43B Employment Rights Act 1996, and/or that any such disclosure was in the reasonable belief of the claimant in the public interest. In broad outline, they assert that the SPA does not include or provide any obligation to pursue FCA authorisation for the first respondent; and to the contrary contains assertions that operating in the way that it did was in compliance with the existing regulatory framework. Firstly it follows from this that any assertion by the claimant of the failure to pursue FCA authorization for the first respondent was not a disclosure of information tending to show a breach of any legal obligation within the SPA as none existed. Secondly they contend that not only did the claimant assert ---6--- that the existing operating model of the first respondent that was in accordance with regulatory requirements, but that that was an entirely accurate assertion. There is therefore a live issue as to whether the claimant will be able to demonstrate that any of the disclosures on which he relies tend to show any breach falling within s43B and are protected disclosures within the meaning of the ERA 1996.[24]Moreover they point to the fact that underpinning the disclosures and repeated within them is the proposition that failing to secure FCA authorisation was increasing the operating costs of the first respondent, and causing it to be less profitable than it would otherwise have been, with financial consequences for the claimant. They contend that read as a whole the fundamental proposition being advanced by the claimant was not that the failure to pursue the objective of securing FCA authorisation for the first respondent itself involved or would involve any breach of the FCA regulatory regime as the existing process was compliant; but rather his underlying complaint was that the respondent’s failure to do so was in breach of the SPA and/or causing him financial loss or harm. This, even if true, is an entirely personal dispute which necessarily did not, and which he could not reasonably have believed, to have any public interest.[25]The other fundamental point made by the respondent it is that it has provided evidence, both in the form of witness statements, and in the documentary evidence contained in the bundle which sets out clearly why the claimant was dismissed and the basis for concluding that he had been guilty of gross misconduct; as set out in the dismissal letter and at paragraph 24 of the statement of Mr Duncan Philips. They submit that despite the claimant’s criticisms of the process and the decision, that the conclusion is entirely rational and supported by contemporaneous documentary evidence, that the respondent at very least reasonably believed that the claimant had committed the misconduct alleged; and that there is nothing before the tribunal today to indicate that either that the reason was not the genuine reason, or that it is “likely” that the claimant will establish, or the tribunal conclude that the reason for dismissal was not that given by the respondent.[26]Claimant’s Submissions - The claimant submits that in respect of the public interest disclosures that the disclosures themselves are clear, and there is no basis for the tribunal today to conclude that it is not likely that eventual tribunal will not hold the claimant did not have a reasonable belief that they tended to show a breach of a legal obligation and possibly other breaches, or that there was no public interest. In respect of the SPA the claimant points out that a breach of the SPA did not simply affect him but would affect his wife and the minority shareholder and/or employees of the first respondent. In respect of the regulatory breaches they are clearly serious allegations and that, as the claimant put it, either the first respondent would have to itself acquire FCA authorisation, or would have to cease trading. In either eventuality that would affect the shareholders, the employees, and the customers of the first respondent, which is sufficient to engage the requirement that the disclosures were in his reasonable belief made in the public interest, and there is therefore no basis for doubting that it is likely at the final hearing that he will be able to demonstrate that the disclosures relied on are protected disclosures. ---7---[27]In respect of the causal link between any disclosures and the dismissal he contends firstly that the dismissal was self-evidently procedurally unfair in that there was no investigation including any input from him, there was no disciplinary hearing in any meaningful sense, and he was not offered the right of appeal. Put simply he was kept out of any meaningful participation in the process, or the opportunity to advance any defence to the allegations. Given the size and administrative resources of the respondent that cannot simply have been an oversight and must have been deliberate. Secondly the matters relied on as gross misconduct cannot on any rational analysis be considered to be gross misconduct justifying dismissal. Those two factors are linked in that the claimant contends that the reason for the failure to conduct any appropriate investigation and /or disciplinary hearing was precisely because the reasons for dismissal would not withstand scrutiny or analysis. If that is correct there must be some other reason for the dismissal other than that relied on by the respondent. Applying the Kuzel v Roche test this is at least sufficient to discharge the evidential burden on the claimant, and for the burden to shift to the respondent. In those circumstances it is unavoidable that tribunal will conclude that the reason given was not the true reason, and it is at least ”likely” that it will conclude that the true reason was the making of the protected disclosures.
Conclusions
[28]My conclusions are that I fundamentally accept the respondents submissions. It is by no means impossible that the claimant will be held to have made one or more protected disclosures, but on the information before me there are live issues of fact and law that which mean that it is not possible to say that it is “likely” (in the sense set out above) that he will do so.[29]Secondly whilst I accept the claimant’s criticisms of the procedural flaws of the approach taken by the respondent to his dismissal, it does not follow in my judgement that the tribunal which ultimately hears the claim will reject the proposition that the reason given for dismissal that was the genuine reason. The points made by the claimant may be good ones, and he may ultimately succeed, but they are not in my judgement sufficient to cross the high threshold for making an a continuation of contract order, and accordingly the claimant’s application is dismissed.