Mr A Carter v Atelier Homes Ltd (In Compulsory Liquidation) and others: 1406257/2023

EMPLOYMENT TRIBUNALS

Case No 1406257/2023

Between

Mr A CarterClaimant

1. Atelier Homes Limited (In Compulsory Liquidation) 2. Longflow Holding Limited (In Compulsory Liquidation), 3. Na Li, 4. Zhendong Guo, 5. Dean Muggeridge, 6. The Secretary of State for Business and TradeRespondent

Before

Employment Judge Dawson, Mr Wakeman, Mr English,

Date 22 October 2025

JUDGMENT

[1]The claimant was unfairly dismissed by the first respondent.a. The claimant is awarded a basic award of £1350.30.

b. The claimant is awarded a compensatory award of £2091.08

[2]The claimant’s claim for breach of contract (notice pay) against the first respondent succeeds and he is awarded damages of £11949.00.

[3]The first respondent did not provide the claimant with a required statement of particulars of employment and the claimant is awarded the sum of £1286.00

[4]The other claims are dismissed.

REASONS

[1]By a claim form presented on 15 December 2023 the claimant brought the following complaints;a. Unfair dismissal;

b. Detriment on the grounds of public interest disclosure;

[2]In the claim form, the claimant also ticked the following boxes:a. Breach of contract (relating to notice);

b. Unlawful deductions from wages;

c. Accrued but unpaid holiday pay.

[3]Following a case management hearing on 2 July 2024 when the claimant was represented by a solicitor, Employment Judge Midgley recorded that the claims which had been presented were of unfair dismissal and unlawful detriment on the ground of having made protected disclosures. No objection was made to that record and since then two sets of list of issues have been agreed which record only the claims of unfair dismissal and detriment on the grounds of public interest disclosure. At the remedy part of the hearing the claimant indicated that he was pursuing his claim of breach of contract for notice pay. Those are the claims we have determined.

[4]Although the first and second respondents are in liquidation, the claimant has obtained permission from the High Court to continue his claims against them. The first respondent, through its liquidators, has presented no response to the claim and the liquidators wrote to the tribunal on 2 February 2024 stating that they would not be preparing any formal response to the claim.

The issues

[5]The issues were recorded in an order following a case management hearing which took place on 3 December 2024 when the claimant and the third, fourth and fifth respondents were legally represented and also in an order following a case management hearing on 2 September 2025. The are set out in the Appendix to this judgment.

[6]At the outset of the hearing, we went through the issues with the parties in detail. Subject to what is said below, all the parties agreed that the list of issues was accurate and set out the claims that we must determine. The following amendments or clarifications were made to the list of issues at the outset of the hearing:a. in respect of issue 1.3 the claimant, correctly, pointed out that he had been given permission to amend his claim form to assert that he was a worker within the meaning of section 43K(1) Employment Rights Act 1996 for the purposes of the whistleblowing claim,

b. in respect of issue 3.1.1.1 the claimant varied the date of the written disclosure from 23rd February 2023 to 17 February 2023 and identified the document page 76 of the claimant’s bundle as being the relevant disclosure,

c. in respect of issue 5.1.3, the claimant clarified that he resigned as a statutory director of the second respondent and added to the list of persons who elevated their interests above normal creditors, the first respondent; he also confirmed that that detriments occurred within the resolution of 7 June 2023 referred to in issue 5.1.2;

d. in respect of issue 5.1.8 the claimant clarified that he was dismissed from the second respondent on 11 August 2023,

e. the claimant confirmed that the property being referred to in issue 5.1.15 was the Portuguese property which he was purchasing,

f. the claimant withdrew allegation 5.1.15

g. in respect of issue 5.2, it was expanded to include the issues of whether the third, fourth or fifth respondents were workers within the meaning of section 47B Employment Rights Act 1996.

h. The parties were informed that the tribunal would deal with issues 2.6 and 2.7 within the liability part of the hearing.

[7]We explained to the parties the importance of the list of issues, in that the list of issues were the claims (and the only claims) that the tribunal would decide and we may limit the questions which the parties asked to those arising from the list of issues. Subject to what has been set out above, neither party sought to amend the list of issues. Conduct of the Hearing

[8]As we went through the issues with the parties, the fourth respondent indicated that he may have trouble understanding some English. We asked whether he would wish for an interpreter to be provided and he indicated that he would. On the second day, which ultimately only dealt with matters of housekeeping, the tribunal worked with the fourth respondent to ensure that he understood what was being said and allowed the third respondent (who is his wife) to translate where necessary. At the end of the day the fourth respondent confirmed that he had understood everything. The tribunal was able to provide a translator thereafter.

[9]When the third respondent gave evidence she sought to use the translator. The difficulty with that was that the translator had been provided for the benefit of the fourth respondent, the third respondent not having requested one. Nevertheless, the fourth respondent indicated that he understood English well enough for the translator to translate on behalf of the third respondent.

[10]In the event, the translator was only called upon by either the third or fourth respondent to translate occasional words or phrases.

The evidence

[11]We were provided with a bundle of documents from the claimant running to 228 pages and a separate bundle from the respondent running to 312 pages a Witness Statements bundle that ran to 143 pages plus an Annex and a transcript from an audio recording that was supplied on a USB stick that we did not listen to, and an additional bundle that was not paginated.

[12]Except where otherwise stated, references to page numbers in this judgment are to the hearing bundles and prefixed with either a C or R to indicate whether they are within the claimant’s bundle or the respondent’s bundle.

[13]The claimant objected to the fact that the respondents had amplified their witness statements (notwithstanding the order of Employment Judge Cadney, the claimant said that the respondents had gone further than they were permitted to). The respondents objected to the claimant seeking to rely upon more documents than he had initially disclosed. In the end the issues were resolved by the claimant withdrawing his objection to the respondents relying upon their amplified statements and the respondents withdrawing their objection to the claimant relying upon the larger bundle.

[14]The claimant then sought to rely upon further documents to which the respondent initially objected. The respondent was given time to consider its position. The respondents objected to two of the documents being presented into evidence. The first, which was numbered C299, was withdrawn by the claimant and we have not considered it. In respect of the second being numbered C289, the objection was that it was irrelevant. We decided that it was in the interests of justice to admit the document and if it was, as submitted, irrelevant, it would simply be ignored.

[15]The respondent sought to add a number of additional pages to the bundle which were numbered R313-317. The claimant did not object.

[16]The respondents withdrew their application to call a witness by video link. The Tribunal had been provided with a memory stick and we explained to the parties that we could not insert them to the tribunal system and if the parties wished to play any audio recording to the tribunal, they would need to provide their own facilities for doing so. We also explained how the tribunal would receive such evidence.

[17]The timetable which had been set down at the case management hearing on 3 December 2024 was discussed at the outset of the hearing and we explained to the parties the importance of sticking to it. We sought to identify a more granular timetable which set out the amount of time that each of the third fourth and fifth respondents would spend cross-examining the claimant and his witness and the amount of time the claimant would spend with each of the respondent’s witnesses. That process highlighted a misunderstanding on the part of the respondents in that they believed they would not be cross-examining the claimant until the fourth day of the hearing. In fact, the tribunal was ready to hear cross-examination of the claimant by noon on the second day. The fifth respondent had prepared questions but left them at home and the third and fourth respondent had not prepared questions.

[18]The tribunal invited the third, fourth and fifth respondents to give an indication of how long they each wanted to ask the claimant and his witness questions for. That process revealed that if cross-examination of the claimant and his witness commenced at 10 AM on the third day of the hearing, the process of cross-examination should still finish around mid-morning on the fourth day. That was sufficiently within the timetable to allow the tribunal to adjourn early on the second day to allow the respondents to prepare cross-examination.

[19]Thereafter, the respondents were able to complete the cross-examination in the times anticipated, except for Mr Guo who asked for a further five minutes to cross-examine Mr Lumb and was granted that time. The claimant was able to complete cross-examination within the time permitted within the timetable which had been set down by on 3 December 2024.

[20]The process of asking questions was explained to the parties as well as the fact that the tribunal would ask questions and the party calling a witness could ask clarifying questions.

[21]We heard evidence from the claimant and for the respondents we heard froma. the third respondent,

b. the fourth respondent,

c. the fifth respondent,

d. Mr Chris Eckert,

e. Mrs Jenny Dong,

f. Mr Glenn Gasson.

[22]In addition the respondents sought to rely upon witness statements from Mrs Wai, Mrs Mao, Mr Beckett and Mr Hoong. We explained that we could only give statements limited weight in circumstances where the maker of the statement was not called. The Law Approach To Evidence

The Law

[23]In Gestmin SGPS SA v Credit Suisse (UK) Ltd, Leggatt J gave the following helpful guidance Evidence Based on Recollection [16] While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose:(1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and

(2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate. [17] Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of socalled 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness's memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory) … [22] In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. ... Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.

[24]We have approached the evidence in that way, whilst bearing in mind that in an employment context it is likely there are less documents and there would be in a commercial case. Unfair Dismissal 5. Section 98 Employment Rights Act 1996 provides that it is for the Respondent to show the reason for dismissal and that it is a potentially fair reason. 6. Section 98(4) states that “The determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)- depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and shall be determined in accordance with equity and the substantial merits of the case”. Misconduct 7. In considering a dismissal for misconduct the tribunal must have regard to the test in BHS v Burchell that “First, there must be established by the employer the fact of that belief; that the employer did believe it. Second, it must be shown that the employer had in his mind reasonable grounds upon which to sustain that belief. And, third, the employer at the stage at which he formed that belief on those grounds, must have carried out as much investigation into the matter as was reasonable in all the circumstances of the case” Real Reason for the Dismissal 8. ASLEF v Brady

[2006] IRLR 576

, held that the question is what was the real reason for the dismissal and that it is for the employer to prove. A potentially fair reason may be the pretext for dismissal in other circumstances, for example if the employer makes the misconduct as excuse to dismiss an employee in circumstances where he would not have treated others in a similar way then the reason will not be the misconduct at all since that is not what brought about the dismissal, even if the misconduct in fact merited dismissal. Once the employee has put in issue with proper evidence a basis the contending that the employer dismissed out of pique or antagonism, it is the employer to rebut this by showing that the principal reason is a statutory reason Procedural Fairness

[25]In Sainsbury's Supermarkets Ltd v Hitt

[2003] IRLR 23

the Court of Appeal held that the range of reasonable responses test applies as much to the question of whether an investigation into suspected misconduct was reasonable in all the circumstances as it does to other procedural and substantive aspects of the decision. Law on Compensation

[26]In circumstances where it is found a decision to dismiss was unfair the tribunal must consider how much compensation to award in accordance with sections 122 and 123 the employment rights 1996.

[27]In respect of the basic award, section 122 (2) ERA 1996 provides "Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly" In commenting on that section, Harvey on Industrial Relations states "Where the conduct of the employee before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to do so (ERA 1996 s 122(2)). It is to be noted that the employer may not discover the conduct until after the dismissal, and accordingly it may have had no influence on the decision to dismiss at all."

[28]In respect of the compensatory award, s123 ERA 1996 provides (1)Subject to the provisions of this section and sections … , the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. ... (6)Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. Public Interest Disclosures

[29]The law is found in different sections according to whether a person is certainly have been subjected to a detriment or unfairly dismissed. S.103A Employment Rights Act 1996 provides that

[30]An employee who is dismissed shall be regarded for the purpose of this Par as unfairly dismissed if the reason (or, if more than one, the principal reason) is that the employee made a protected disclosure

[31]S.47B Employment Rights Act 1996 deals with detriments on grounds of making protected disclosures and provides that: A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure (1A) A worker ("W") has the right not to be subjected to any detriment by any act, or any deliberate failure to act, done-(a) by another worker of W's employer in the course of that other worker's employment, or

(b) by an agent of W's employer with the employer's authority, on the ground that W has made a protected disclosure. (1B) Where a worker is subjected to detriment by anything done as mentioned in subsection (1A), that thing is treated as also done by the worker's employer. (1C) For the purposes of subsection (1B), it is immaterial whether the thing is done with the knowledge or approval of the worker's employer.

[32]Under section 43A of the Act a protected disclosure is a qualifying disclosure (as defined by section 43B) which is made by a worker in accordance with any of sections 43C to 43H.

[33]Under Section 43C(1) a qualifying disclosure becomes a protected disclosure if it is made-(a) to his employer, or

(b) where the worker reasonably believes that the relevant failure relates solely or mainly to - (i) the conduct of a person other than his employer, or (ii) any other matter for which a person other than his employer has legal responsibility, to that other person.

[34]Under section 48(2) of the Act, on a complaint to an employment tribunal it is for the employer to show the ground on which any act, or deliberate failure to act, was done. Disclosure of Information

[35]S43B Employment Rights Act 1996 provides (1) In this Part a "qualifying disclosure" means any disclosure of information which, in the reasonable belief of the worker making the disclosure, is made in the public interest and tends to show one or more of the following- (a) that a criminal offence has been committed, is being committed or is likely to be committed, (b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject, (c) that a miscarriage of justice has occurred, is occurring or is likely to occur, (d) that the health or safety of any individual has been, is being or is likely to be endangered, (e) that the environment has been, is being or is likely to be damaged, or (f) that information tending to show any matter falling within any one of the preceding paragraphs has been, is being or is likely to be deliberately concealed

[36]In Kilraine v London Borough of Wandsworth

[2018] EWCA Civ 1436

. The Court of Appeal held "The question in each case in relation to section 43B(1) (as it stood prior to amendment in 2013) is whether a particular statement or disclosure is a "disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the [matters set out in sub-paragraphs (a) to (f)]". Grammatically, the word "information" has to be read with the qualifying phrase, "which tends to show [etc]" (as, for example, in the present case, information which tends to show "that a person has failed or is likely to fail to comply with any legal obligation to which he is subject"). In order for a statement or disclosure to be a qualifying disclosure according to this language, it has to have a sufficient factual content and specificity such as is capable of tending to show one of the matters listed in subsection (1). The statements in the solicitors' letter in Cavendish Munro did not meet that standard" (para 35).

[37]As the EAT has set out in Dray Simpson v Cantor Fitzgerald [2020] I.C.R. 236 "the question in each case, as has now been made clear, is whether a particular statement or disclosure is a "disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the [matters set out in paragraphs (a) to (f)]". However, in order for a statement or disclosure to be a qualifying disclosure, it has to have a "sufficient factual content and specificity such as is capable of tending to show one of the matters listed in subsection (1)". The question of whether or not a particular statement or disclosure does contain sufficient content or specificity is a matter for evaluative judgment by the Tribunal in light of all the facts of the case (para 39). Reasonable Belief

[38]That test on belief in the public interest was set out the case of Chesterton Global v Nuromohamed where it was reiterated that the tribunal must aska. whether the worker believed at the time he was making the disclosure that it was in the public interest and,

b. if so, whether that belief was reasonable

[39]More than one view may be reasonable as to whether something is in the public interest

[40]In Babula v Waltham Forest College it was held that the tribunal should go through a 3 stage testa. firstly considering whether or not the employee believes that the information he is disclosing meets the criteria,

b. secondly considering whether objectively that belief is reasonable and, thirdly

c. considering whether the test has been made in good faith although that is now a matter for remedy rather than considering whether the claim is protected by the legislation. Detriment due to Protected Disclosure

[41]Royal Mail Group Ltd v Jhuti held that if a person in the hierarchy of responsibility above the employee determines that she (or he) should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason.

[42]That approach was clarified by the EAT in Kong v Gulf EA-2020-000357-JOJ where HHJ Auerbach noted "First, the general rule that the motivation that can be ascribed to the employer is only that of the decision-maker(s) continues to apply. Secondly, there is no warrant to extend the exceptions beyond the scenario described by Underhill LJ, which will itself be a relatively rare occurrence, and the surely highly unusual variation encountered in Jhuti. Thirdly, whether in the scenario contemplated by Underhill LJ, or in the variation described by Lord Wilson, two common features are that(a) the person whose motivation is attributed to the employer sought to procure the employee's dismissal for the proscribed reason; and

(b) the decision-maker was peculiarly dependent upon that person as the source for the underlying facts and information concerning the case. A third essential feature is that their role or position be of the particular kind described in either scenario, so as to make it appropriate for their motivation to be attributed to the employer" (para 71).

[43]In Fecitt v NHS Manchester

[2012] ICR 372

, the Court of Appeal held that the test of whether an employee has been subjected to a detriment on the ground that he had made a protected disclosure is satisfied if, "the protected disclosure materially influences (in the sense of being more than a trivial influence) the employer's treatment of the whistleblower"

[44]In Panayiotou v Kernaghan

[2014] IRLR 500

, at para 49 and 52 the EAT held: ''[49] There is, in principle, a distinction between the disclosure of information and the manner or way in which the information is disclosed. An example would be the disclosing of information by using racist or otherwise abusive language. Depending on the circumstances, it may be permissible to distinguish between the disclosure of the information and the manner or way in which it was disclosed. An employer may be able to say that the fact that the employee disclosed particular information played no part in a decision to subject the employee to the detriment but the offensive or abusive way in which the employee conveyed the information was considered to be unacceptable. Similarly, it is also possible, depending on the circumstances, for a distinction to be drawn between the disclosure of the information and the steps taken by the employee in relation to the information disclosed.' … [52] Those authorities demonstrate that, in certain circumstances, it will be permissible to separate out factors or consequences following from the making of a protected disclosure from the making of the protected disclosure itself. The employment tribunal will, however, need to ensure that the factors relied upon are genuinely separable from the fact of making the protected disclosure and are in fact the reasons why the employer acted as it did.'

[45]Kong v Gulf International Bank (UK) Ltd [2022] I.C.R. 1513 57. Thus the "separability principle" is not a rule of law or a basis for deeming an employer's reason to be anything other than the facts disclose it to be. It is simply a label that identifies what may in a particular case be a necessary step in the process of determining what as a matter of fact was the real reason for impugned treatment. Once the reasons for particular treatment have been identified by the fact-finding tribunal, it must evaluate whether the reasons so identified are separate from the protected disclosure, or whether they are so closely connected with it that a distinction cannot fairly and sensibly be drawn. Were this exercise not permissible, the effect would be that whistleblowers would have immunity for behaviour or conduct related to the making of a protected disclosure no matter how bad, and employers would be obliged to ensure that they are not adversely treated, again no matter how bad the associated behaviour or conduct. He Findings of Fact

[46]By way of introductory overview, and subject to our more detailed findings below, the parties in this case were involved as directors and shareholders in Atelier Homes Ltd and Longflow Holdings Ltd (the first and second respondents). There is little goodwill between the claimant and the respondents and it is apparent that they both blame each other for the ultimate failure of those companies. At risk of oversimplification, the first and second respondents were part of a group of companies which carried out property development, the claimant was one of three directors who initially set up the companies, the other two being the fifth respondent and a third person. The third and fourth respondents became involved in the first and second respondents as investors and shareholders but were also appointed as directors of one or the other company. The third and fourth respondents became frustrated with the way the claimant was operating the companies and took the view that he was inappropriately using company funds for his own purposes instead of securing a proper return on their investment, and the investment of others which they had secured. The claimant says that he was behaving properly and the third and fourth respondents should have been more patient in waiting for a return on their investment; if they had waited for another couple of months, the group would have started to sell properties which had been built, easing cash flow and allowing for a return on investments.

[47]It is necessary, therefore, to say a word about what this case is not about. This case is not about the merits of the dispute between the shareholders of the first and second respondent. It is not to decide whether the claimant deliberately, or otherwise, misled investors in order to secure further investment into the first or second respondent or associated companies. It is also not about deciding whether or not Mr Carter misappropriated company funds. It is necessary to consider whether the 3rd to 5th respondents genuinely believed that Mr Carter had misappropriated company funds, because that is the explanation they give for suspending him (amongst other things), however ultimately the claimant was not dismissed for misappropriation of company funds but for other matters.

[48]We commence our judgment with those observations because throughout the hearing the parties frequently lost sight of the issues in this case. The issues, for us, are whether the claimant made protected disclosures and if so, whether he was subjected to a detriment because of that or dismissed because of them. The case is also about whether the claimant was employed by the first or second respondent and was unfairly dismissed by either of them.

[49]We limit our findings of fact to those necessary to resolve the issues in the case. It follows that we will not make findings of fact on all of the evidence which has been presented to us over the course of six days. That does not mean we have overlooked that evidence, simply that we have not needed to make findings on it to reach our decision.

[50]We will set out our general findings of fact and then make findings on the specific issues. General Findings of Fact

[51]It is not in dispute that in November 2018 the claimant, Mr Muggeridge and Mr Beckett founded GD Concepts Ltd, which changed its name to Atelier Homes Ltd on 17 June 2022. It was intended that the business would purchase land and subsequently build high-end dwelling houses. The claimant’s role was to raise development bank finance and structure the business, Mr Muggeridge’s role was to deal with the costs of construction and human resources and Mr Beckett’s role was to oversee construction and ground works.

[52]After the first couple of developments, in February 2019, a Tony Brophy introduced prospective Chinese investors to the directors of GD Concepts Ltd and two developments were identified for purchase. In order to develop those investments a further two limited companies were incorporated, being BGZ (Angmering) Ltd and Bilton Fields Homes Limited and work started between September 2019 and December 2019.

[53]As is well known, in 2020 covid struck the UK and Mr Carter says, and we accept (as being common knowledge) that costs of building started to increase. Mr Carter cites a number of explanations including development sites closing, materials being delayed, planning decisions being delayed and substantial increased costs.

[54]In July 2020 another company of the claimant and Mr Muggeridge, GD Group Investments Ltd renamed itself Atelier Group Investments Ltd. Companies House records show that the claimant was appointed as a director on 17 July 2020 and resigned on 7 June 2023. Mr Muggeridge, was also appointed on 17 July 2020 and he resigned on 1 July 2022. That company was renamed Longflow Holdings Limited on 15 December 2023.

[55]The claimant says that in April 2021, the third and fourth respondents were granted shares in GD Group Investments Ltd as is evidenced by the review of the shareholders agreement at page C34; at that point the claimant and the third fourth and fifth respondents all became equal shareholders. There is no dispute that the third and fourth respondents invested significant sums of money into the first and/or second respondents and also secured investment from other Chinese investors.

[56]The claimant says that it was at this stage that he entered into a service agreement with GD Group Investments Ltd. We will return to this point shortly.

[57]We have not been given the precise dates when the third and fourth respondents became involved in the first and second respondent but it was clearly by April 2021 when they were given shares in GD Group Investments Ltd. Companies House shows that the fourth respondent was appointed as a director to the second respondent on 17 November 2020, resigning in June 2021. The third respondent was appointed as a director on 2 June 2021. The third respondent became director of the first respondent on 1 July 2022, resigning on 7 June 2023 and the fifth respondent was a director of the first respondent between 19 November 2018 and 1 July 2022 and 7 July 2023 and 25 October 2023. He was a director of the second respondent between 17 July 2020 and 1 July 2022.

[58]The fourth respondent says in his statement that through 2021, 2022 and into 2023, he and the third respondent injected more than £1.15 million of their own cash into the companies and also brought investment through contacts of theirs includinga. £800,000 from Ms Di Mao, and

b. £220,000 from Mr Kun-Hang Ho.

[59]Those figures were not contested and we accept them.

[60]In addition we were told, it was not disputed and we accept, that the third and fourth respondent had provided bank guarantees in respect of the bank finance. The fourth respondent told us, and we accept, that they have now been called upon to pay under the guarantees and have paid over £6m.

[61]It is clear from the evidence that we have seen that the claimant was continually seeking to raise money for the respondent companies, and although we do not suggest that he behaved improperly, he wrote what might be described as impassioned pleas for the money. For instance, on 24th of April 2023 he wrote to Ms Di Mao and Mr Kun-Hang Ho, copying the third and fourth respondents as follows: Dear Lucky and Di, Further to my email of March 29" another 100k has been raised by Di. This is a total of 400k raised which we say thank you. We need to raise another £250k to 300k with £100k being an emergency this week as I am concerned that the lending bank is getting nervous with the lack of progress due to slow payments of subcontractors and the attached interest payment which is due to the Bank. The reason we have had to start paying interest to the Bank is because the increase in interest rates is capped in the facility. Please see the below which explain why funding is required. When we approached the lending banks 2 years ago prices for building costs were based at that time. As you can see from the below figures building cost have risen dramatically however so has the sales prices of the houses (GDV) Added to the increased funding required for the build cost, is the increase of interest payment due to the Bank of England interest rate increase. This has put an increase pressure on the business as the bank facility allows for a fixed amount of interest and therefore now we are having to pay the interest to the lending Bank. (see email attached) Heatherlea Heathfield GDV 5.5m increased to 8.8m. an increase of 60% Build cost total 3.2m increase to 4.4m. an increase of 37% Bank facility 3.3m Shortfall in funding 1.1m Church Lane Barnham GDV 4.0m increase to 5.0m. an increase of 25% Build cost total 1.9m increased to 2.4m. an increase of 25% Bank facility 1.8m Shortfall in funding 600k The total shortfall is 1.7m Shortfall funding raised to date is Lina and Gabriel and other investors 1.0m Ashley 50k Lucky 200k Di 200k Total raised to complete projects £1.45m Shortfall required to complete projects £250k to 300k. Note Atelier have a further 400k coming in from other sales but this is taking time which we do not have. I do not like writing emails like this but we are at a critical stage with sales nearing and projects not finished which will put everybody’s monies at risk if the Banks decide to step in and take over.

[62]The letter shows not only the requests for money, but also the increasingly parlous state of the first and second respondent’s finances.

[63]By April 2023 the company could not make payment of salaries (page R146).

[64]The claimant’s solution for the company’s difficulties was to enter into a mezzanine loan scheme. That prompted the third and fourth respondents to engage a firm called Stature London Ltd to conduct a review of the construction costs for the active projects. That showed significant budget overruns on all of the projects as can be seen at pages R 151-152. The third respondent had discussions with the claimant about those matters and notes in her statement that the claimant’s response was not to restructure or reduce costs but to ask for more money from the investors. On 22 May 2023 he wrote to Mr Kun-Hang Ho asking for a further £100,000-£200,000 (page R 158).

[65]The third respondent’s evidence is that at the same time, she became aware that the claimant intended to take £250,000 from the mezzanine loan to purchase his villa in Portugal. She says that the claimant and his wife told her the £250,000 would be taken from the mezzanine loan and it would be paid back from the sale of properties at the Arundel site.

[66]There is no contemporaneous evidence to support the third respondent’s allegation but the fourth respondent did call evidence from Mr Gasson. He had been employed as Design Manager for the first and second respondents. We found his evidence to be credible in that he appeared to us to be a reluctant witness and not particularly trying to support either one side or the other. He told us that he had heard rumours that the claimant was going to obtain the purchase funds for the Portugal house from a mezzanine loan.

[67]On 29th August 2023 the third respondent sent a questionnaire to some members of staff. One response was from Agnes King, who describes herself as the office manager. The questionnaire is at page R 243 and contains a question “You overheard that AC and JC wish to cash out from bridging loan drawdowns to buy their property and you worry about the SPV's may struggling with cash if they have done so.” The handwritten answer is “I know they needed to withdraw 200 K from the business to fund Portugal”. We must be cautious in accepting that statement at face value; it is not entirely clear to us why the questionnaires were written and we have not heard from Ms King.

[68]We make no finding as to whether or not the claimant was intending to fund his Portugal property using the monies from the mezzanine loan, however, having regard to the above evidence, we find that the third respondent was genuinely concerned that he was intending to do so.

[69]There is no dispute that each of the directors was to be paid £50,000 per annum. In addition, it was the evidence of Mr Lumb that the intention was that director’s remuneration would be increased to at least £100,000 per annum and that director’s loans would be used for essential personal cash flow requirements in the meantime, until they could be offset against planned dividends1. It is clear that is the way the claimant operated the business and he ran up a directors loan account of around £150,000 by December 2022. On 8 December 2022, the third respondent wrote to Mr Lumb recording a discussion with the claimant whereby the claimant would waive his directors loan account of £150,000 “as his dividend” and the third and fourth respondents would get £250,000 for the past two years as dividend. In the event any profits in the company were not sufficient to pay those dividends and the claimant’s loan account continued. The third respondent sets out in her witness statement her frustrations with the way the claimant used the directors loan account and, in particular, that he used it to fund personal expenses such as refreshments in Portugal. We find that concern displays a misunderstanding of the purpose of a director’s loan account. A director’s loan account is (at least often) used to finance personal expenditure. That is why it is classed as a loan from the company to the director. Thus, there is nothing intrinsically wrong with the claimant having a company credit card which was used to fund personal expenditure as long as that personal expenditure is recorded within the loan account. Indeed, it would be much more concerning if the expenditure was not being so recorded, and the fact that it was being recorded in that way suggests that, at least to that extent, the claimant was acting with integrity. Nevertheless, we accept that the third respondent found it extremely frustrating that in circumstances where she was investing heavily in the company, the claimant was spending company money on unnecessary personal items, rather than securing a return on her investment.

[70]By June 2023 the third and fourth respondents had become extremely unhappy because of the way they perceived the claimant was operating the company. There were clear financial difficulties and we find that they believed that the claimant was not dealing with those difficulties in the way he should. They perceived him to be too unconcerned about the financial difficulties and too keen to pay himself whilst expecting others to pour money into the company. We do not need to make a decision about whether they were right or not. It may be that the claimant is right and that if everyone had held their nerve matters would have resolved as the companies began to sell houses. Nevertheless, we find that was their genuine view and informed everything that happened thereafter. 1. 1 Mr Lumb represented a business called Profitability Solutions Limited. He has given evidence in this case and in his witness statement he describes himself as being a Fellow of the Chartered Institute of Management Accountants. He says that he was Director of Finance for Atelier Homes Ltd and Atelier Group Investments Ltd between June 2020 and June 2023. In his evidence he confirmed that he was not a statutory director but took on the role of a director in the companies. He worked for one day a week in that role and carried out duties at other companies. We accept that evidence.

[71]On 7 June 2023, the third and fourth respondents wrote to the claimant. They stated that they were not currently demanding repayment of any monies that had been drawn from the directors’ loan account and were seeking to protect the company from the potential banking crisis. They stated that in order to reinforce the faith of investors one of them was guaranteeing their Bentley, their apartment in City Island and a house in Shanghai. They attached a proposed company resolution which set out how investments would be treated and sale proceeds dealt with and included the followinga. the third respondent would be removed from her role as director of Atelier Homes Ltd and the claimant would continue as the sole director of Atelier Homes Ltd,

b. the claimant would resign from his directorships in a number of companies including the second respondent but would maintain his shareholder status.

[72]A meeting then took place on either the 13th or 14th of June (both dates have been used, it seems most likely the actual date was 13 June). Before that, Mr Lumb wrote to the claimant and the third and fourth respondents stating that if the resolution was passed it was likely to trigger a series of events which would result in insolvency and suggested getting advice from an insolvency practitioner. He stated that, at that stage, there was still sufficient profit/cash available from upcoming developments to pay back all suppliers, banks and investors in full.

[73]The meeting took place on 13th or 14th of June but there are no minutes of the meeting and it is not entirely clear to us whether it was a shareholders meeting or a directors meeting or both. Nevertheless, the claimant confirmed in his evidence that at that meeting he resigned from the group of companies including the second respondent but kept his directorship with the first respondent. In answer to the tribunal’s questions, he confirmed that he was resigning from his employment with the second respondent as well as his statutory directorship.

[74]On 19 June 2023, the third respondent wrote to the claimant asking him to turn his full attention to ensuring that the Atelier Homes Ltd’s issues were resolved as quickly as possible and not contact any subcontractors. She also asked him to cease any contact with the companies’ banks unless she had given her authority to do so and stated that Mr Lumb would now report directly to her. She also demanded repayment of the directors’ loan account. It has not been raised in this case, and is not an issue which we need to decide, what authority the third respondent had to issue those demands. It appears to have been accepted that she had the power to do so.

[75]On 22 June 2023, HTB bank, which had provided much of the finances for the building developments transferred the loan to the bank’s Business Support Team (page C141).

[76]The claimant then asked the third and fifth respondents to attend a meeting with an insolvency practitioner, Mr Touhey. Although the respondents take issue with him doing so, we accept that by that stage, because of the actions which had been taken, the claimant and Mr Lumb were concerned about the need to ensure they were not wrongfully trading. The claimant remained a director of the first respondent and we see nothing wrong with him arranging the meeting with the insolvency practitioner.

[77]On 24 June 2023, the third respondent wrote to an HR company which she had instructed stating: Ashley organised an insolvency meeting with his IP practitioner and his accountant next Wednesday, which I don't want to attend. So I guess we need to suspend him ASAP. Let's do the meeting on Monday 4.30pm please. (page C 145)

[78]The third respondent then arranged a meeting on 26 June 2023, which the claimant refused to engage in and on the same day a letter was sent suspending him from his role as director of the first respondent. He was told that he should not contact any customers, suppliers, subcontractors, employees, banks or financiers, advisers or associates of any group company. Again, for the purposes of this case, the authority of the third respondent to send the letter suspending the claimant has not been in issue and we make no comment on it.

[79]On 6 July 2023, Mr Touhey wrote to the third respondent referencing an email which had been sent to him on 27 June 2023. It appears that the third respondent had told Mr Touhey that he should not discuss matters with the claimant. Mr Touhey declined pointing out that the claimant was still a director of the first respondent.

[80]It is not in dispute that at the same time the claimant continued to contact creditors of the business and colleagues who he worked with, indeed on 6 July 2023, he contacted the third respondent and a number of others stating that he planned to continue his duties as managing director and "Despite your insistence of demanding that I do not talk to Banks, Suppliers, Subcontractors etc I have been inundated with calls of concern as to the way you are behaving on behalf of all Group Companies" (R 208).

[81]On 7 July 2023, the claimant sent an email to the third respondent, copying in a number of others including the fifth respondent, with an attached email with the filename “Working Visa Fraud”. He stated that the attached email would be detrimental to all concerned once in the public domain and therefore he implored the third respondent to attend a meeting with Mr Touhey. The claimant then followed through on his threat and sent a document which appears to be 98 pages long to, at least, HTB bank. The claimant says that the text that he wrote appears at pages 214 – 216 of the claimant’s bundle. The respondent disputed that but they have not adduced their own version of what was written., In any event there is no dispute, and we find, that it contained allegations that the first and /or second respondent had been defrauding British officials in obtaining visas for Chinese nationals to work in the UK (page R213).

[82]On 13 July 2023, solicitors acting for the claimant wrote to the third respondent making comments on the employment position of the claimant, his status as a director of Atelier Homes Ltd and the obligations of the directors of Atelier Homes Ltd to the creditors of the company (page C 156).

[83]On 25 July 2023, the claimant served a series of statutory demands as director of Atelier Homes Ltd. He served one on the third respondent, apparently as representative of the second respondent, for the amount of £449,261, another on the third respondent, apparently as representative of GD Church Lane Ltd for £396,747, one on the third respondent as representative of GD Heatherlea Ltd for £1,487,000,660, and one on Mr Muggeridge on behalf of BGZ (Angmering) Ltd.

[84]The claimant told us that he had no intention of pursuing a winding up petition in respect of those statutory demands but simply wanted to record the position of the indebtedness. We fail to see why he could not do so by sending a letter. Such an action was bound to inflame the situation, although we accept that Mr Carter may have felt that he had been treated badly.

[85]On 1 August 2023, the claimant was requested to attend a formal disciplinary hearing on 7 August 2023 by Mr Muggeridge as director of Atelier Homes Ltd. Five allegations were put to the claimant as follows 1 you failed to follow the reasonable management instructions that were issued by Li Na in the letters dated 19" June 2023 and 26 June 2023 (see attached). Section 1 contains examples that support this allegation. 2. your actions between 15th January 2023 and 15th August 2023 have culminated in a loss of trust and confidence in you and a breakdown in the employment relationship. Section 2 contains examples that support this allegation. 3. you have bullied and harassed a fellow Director (Li Na). Please refer to Section 3 for evidence. 4. you drew up Statutory Demands that you had no intention of filing to cause maximum disruption to the Group and visited the office to deliver them breaching your terms of suspension. 5. you breached the Company's GDPR policy by sending confidential personal information outside of the Company to unauthorised recipients without the approval or knowledge of the data subjects. You committed this breach whilst you were suspended, and also claimed that the Company had acted unlawfully when this was not the case, thereby damaging the Company's reputation with a key investment partner.

[86]The reference in relation to bullying and harassment is in relation to a statement which had been taken from the third respondent including the occasion when she said she felt pressurised to allow the payment from the mezzanine loan in respect of the Portugal property (a copy appears at page R 159).

[87]The claimant did not attend the disciplinary meeting on 7 August 2023 and so it was rescheduled for 10 August 2023. He again did not attend and the meeting went ahead in his absence. The minutes appear at page R 14.

[88]The meeting was chaired by Mr Muggeridge and the minutes show that he found the allegations proved and, having reflected for 24 hours, decided to dismiss the claimant from his role of managing director. The decision was that the claimant’s contract of employment be terminated on the grounds of gross misconduct from 11 August 2024. A letter was sent to the claimant to that effect on 14 August 2023 (page R 18).

[89]The claimant then appealed and an appeal was heard on 11 September 2023, which Mr Carter did attend. The appeal was heard by an external HR consultant Ms Forrest-Lavery. A lengthy outcome letter was sent by Ms Forrest-Lavery (at page R 29 ) which concluded “I therefore conclude that the dismissal should remain in place, albeit that some elements are unfounded and potentially unfair. I recommend that the Company should try to ‘make good’ in respect of this”.

[90]Somewhat unusually, Ms Forrest-Lavery thereafter, entered into direct correspondence with the claimant. On 26 October 2023 she wrote to him stating: As you are aware, there was 16 disciplinary allegations against you, of which I found 12 not founded and in your favour, and the remaining 4 were founded but 2 of them were founded subject to the outcome of the forensic report. I believe it was the correct decision for the business to terminate your employment, mainly as a result of the relationship breakdown and their loss of trust and confidence in you. However, in the absence of the outcome of the forensic report, I can't agree that the summary dismissal for gross misconduct was appropriate and this was the main reason for my comment of "I therefore conclude that the dismissal should remain in place, albeit that some elements are unfounded and potentially unfair. I recommend that the Company should try to 'make good' in respect of this" in the conclusion of my outcome letter. However, my view on this could change subject to the findings within the report (page C242, our emphasis). Mr Muggeridge told us, and we find, that the view of Ms Forrest-Lavery that summary dismissal for gross misconduct was not appropriate, was never communicated to him. Findings of Fact on Specific Issues Issue 1- Employment Status

[91]It is not in dispute that the claimant was an employee of the first respondent throughout the period which we must consider. When the claimant was invited to a disciplinary hearing on 1 August 2023 by the fifth respondent, the fifth respondent was writing on behalf of Atelier Homes Ltd (page R10).

[92]In support of his assertion that he became an employee of the second respondent in April 2021, the claimant points to an email from Nick Lumb to him dated 3 July 2024 at page C40. That email, written after the dispute between the claimant and the respondents had arisen, sets out that Mayo Wynne Baxter, a law firm, had advised the need for director’s service agreement but because £4500 had already been spent on legal costs, a standard director’s service agreement template was purchased from SimplyDocs.

[93]Mr Lumb confirmed that he had purchased a service agreement from SimplyDocs for Mr Carter’s engagement by the second respondent, as appears at page C9. The service agreement provides that the company would employ Mr Carter to work as a director and he would be contracted to work 40 hours per week.

[94]The respondents dispute the genuineness of the document at page C9, pointing to page R262 which they say shows the properties of the document and show it as being created on 13 July 2023 at 9 AM. The claimant says that on that day he amended the service agreement by entering the date of 6 April 2021 on the front and last page and inserting his address. The claimant also says that, at that stage he had a blank service agreement in hard copy and a PDF version which had been filled out, apart from the information which he inserted on 13 July 2023.

[95]The claimant agreed with the respondents that his wage slips showed that his wages were paid by the first respondent, but he asserted that company was simply a payment vehicle for his wages from the second respondent. He says that the work he carried out for the second respondent was looking after the other companies in the group. The fourth respondent was appointed as a director of the second respondent and he agreed that he was paid via the first respondent for work he had done for the second respondent and that the claimant had explained to him that the reason for doing so was to save costs.

[96]On 6 October 2023, the third respondent signed a letter to the claimant. It was sent from GD Investments Ltd. It stated: We are aware that your employment contract with Atelier Group Investments Limited, the main operating subsidiary of Atelier Homes Limited, was terminated for gross misconduct on 11/08/2023 and the decision was upheld following the appeal hearing as detailed in the letter from Forrest Group dated 25th September 2023.

[97]As we will go on to find, that letter was wrong to, at least, some extent in that on 11 August 2023 the claimant was dismissed by Mr Muggeridge on behalf of Atelier Homes Ltd not Atelier Group Investments Limited. However, the letter is evidence that, at least at that point, it was accepted by the third respondent that the claimant had an employment contract with the second respondent.

[98]Overall, we find that following the advice of Mayo Wynne Baxter, the claimant did enter into a contract of employment with the second respondent in April 2021. He was required to carry out work for the second respondent, including the managing of the other companies in the group. He was paid a salary in that respect. The claimant remained an employee of the second respondent until the meeting on 13 June 2023. On that day, we find that he resigned both as a statutory director and as an employed director in accordance with the wishes of the third and fourth respondents. That is what he told us and is consistent with the resolution which had been provided in advance by the third and fourth respondents.

[99]As an employee, the claimant was also a worker of the second respondent. Thus issues 1.2 and 1.3 are answered in the affirmative, the claimant was both an employee and a worker within the meaning of the Employment Rights Act 1996 for the second respondent.

[100]However, the claimant ceased to be an employee and worker of the second respondent on 13 June 2023. Issue 2 Unfair dismissal - Claim Against First and Second Respondents

[101]In respect of issue 2.1, the claimant was not dismissed by the second respondent. The claimant resigned on 13 June 2023. He has not suggested that his resignation amounted to a constructive dismissal and that is not the case which he presents.

[102]The claimant was, however, dismissed by the first respondent, through its director the fifth respondent (it has not been suggested that the fifth respondent did not have the authority to dismiss the claimant). The decision to dismiss was made on 11 August 2023 but it only took effect when it was communicated to the claimant in the letter of 14 August 2023.

[103]Having heard Mr Muggeridge, we are entirely satisfied that he genuinely believed that the claimant was guilty of gross misconduct in that he believed that the claimant had committed the five acts of misconduct set out in the invitation to the disciplinary hearing. The minutes of the meeting on 10 August 2023 show that he took a careful approach to the allegations and reviewed the evidence in relation to them. He did not simply decide that because the claimant had not attended the meeting he would be dismissed.

[104]The tribunal asked Mr Muggeridge about the entry in the “Summary of evidence and supporting evidence” which appears at page R 12. Mr Muggeridge confirmed that was, at least in part, a summary of the evidence he relied upon. At number 5a, one of the allegations is that the claimant had sent an email to a number of recipients stating that Atelier Homes had employed two foreign nationals illegally and attached a large amount of personal data without their knowledge. We were concerned about how much the allegation of illegality had influenced the decision to dismiss the claimant. Mr Muggeridge, in a careful reply, took us through the notes of the disciplinary hearing and how he had addressed that at page 3 of the notes (page R 16). It is clear that his concern in that respect was the breach of the company’s GDPR policy by sending confidential personal information outside of the company to unauthorised recipients.

[105]For the same reason, we also asked him about the part of his witness statement where he deals with the visa fraud email and has inserted a subheading “Blackmail Allegation – visa Fraud Email”. We asked Mr Muggeridge whether that suggested that he was particularly cross about the allegation of visa fraud. Mr Muggeridge confirmed that he did feel that the letter was an allegation of blackmail. Mr Carter, he said, had sent the email in order to force a meeting with his insolvency practitioner. Given the wording of the email and, in particular, the statement “Obviously, the attached email would be detrimental to all concerned once in the public domain and I therefore implore you to attend a meeting with Ken Touhey on Monday pm to take the advice and to move forward”, we accept the evidence of Mr Muggeridge. It was entirely reasonable for Mr Muggeridge to take the view that (in layperson’s terms) the email was an attempt to blackmail Ms Li into doing what Mr Carter wanted. If Mr Carter was genuinely concerned about illegality it makes no sense for him to only send the threatened email if Ms Li were then not do what he wanted in terms of speaking to his insolvency practitioner. Allegations of fraud in respect of these applications are separate from questions of solvency.

[106]Thus, we accept that Mr Muggeridge had a genuine belief in the claimant’s misconduct. Moreover, he had reasonable grounds for that belief. The claimant had manifestly served the statutory demands and contacted fellow employees. Mr Muggeridge reviewed the other evidence as set out in the notes of the disciplinary meeting and, we find, did so conscientiously. There were reasonable grounds for the belief which he reached. There was also a sufficient investigation. Evidence had been gathered and the claimant was invited to a meeting to discuss that evidence. The claimant has not suggested that any other evidence should have been obtained.

[107]In respect of issue 2.4, given that the claimant had been suspended and given the matters which Mr Muggeridge found proved, we are unable to say that the decision to dismiss fell outside the range of reasonable responses. The provision of personal data to the bank (in respect of the alleged visa fraud) was serious misconduct. It can only have been sent in order to further the claimant’s unhappiness with the third and fourth respondents. There was no valid reason for sending it to those recipients rather than the Home Office or the police. The serving of statutory demands on other groups in the company in circumstances where the claimant stated that he had no intention of pursuing a winding up petition, can also reasonably be seen as vexatious and misconduct.

[108]In respect of issue 2.5, however, we do not find that the respondent adopted a fair procedure. Although no criticism is made of the fifth respondent in respect of the way he conducted the process, we are critical of Ms ForrestLavery. The outcome to the appeal which she sent to both the claimant and the respondent, whilst somewhat unclear, gave the impression that the dismissal should be upheld. She did not overturn the decision to dismiss the claimant. At its highest, she suggested that some elements were potentially unfair.

[109]However, it is known from what she wrote to the claimant, that in fact she believed that summary dismissal for gross misconduct was not appropriate. If that was her view, as the appeal officer, she had a duty to communicate that view to the first respondent. As Mr Muggeridge fairly accepted, if it was not appropriate to dismiss the claimant for gross misconduct, the claimant would have been entitled to notice.

[110]Having observed Mr Muggeridge, he seemed to us to be someone who was keen to follow process and take advice from others. He had only been brought back into the company after the claimant had left to try and help the third and fourth respondents and had, initially, been resistant to the idea that he should be the officer who heard the disciplinary proceedings. He was not keen to be involved in the process. We have no doubt that if Ms Forrest-Lavery had properly communicated her view to Mr Muggeridge, the claimant would not have been dismissed for gross misconduct.

[111]In those circumstances the first respondent did not adopt a fair procedure because the dismissing officer did not communicate her actual conclusion to the first respondent.

[112]In respect of issue 2.6, we must decide whether, if the respondent did not use a fair procedure, he would have been dismissed in any event. In her communication to the claimant of 26 October 2023, before stating that she could not agree that summary dismissal was appropriate, Ms Forrest-Lavery stated that she believed it was the correct decision for the business to terminate the claimant’s employment, mainly as a result of the relationship breakdown and their loss of trust and confidence in the claimant. That is the view that should have been unequivocally communicated to the first respondent.

[113]If that view had been correctly communicated, we find that Mr Muggeridge would have agreed, but it is also likely that he would have restarted the disciplinary process on the basis that it was a process to dismiss for breakdown in trust and confidence. A fair procedure in those circumstances would have taken a further six weeks. Moreover, after that six weeks had ended, the claimant would have been dismissed on notice. Thus the claimant’s employment would have continued for a further six weeks plus his notice period. We have no doubt that such a decision would have been within the band of reasonable responses, the relationship between the claimant and the respondents had irretrievably broken down. The third and fourth respondents had lost all faith in the claimant.

[114]Issue 2.7 requires us to consider whether the claimant contributed to his dismissal by culpable conduct. It will be obvious from what we have said that he did. It was culpable conduct to send the letter of 7 July 2023, containing the threat to send the visa allegation email if the third respondent did not do what he wished. It was also culpable conduct to send the personal employment details Ms Di Mao and Mr Kun-Hang Ho to HTB and others. It was culpable conduct to serve statutory demands in circumstances where he had no intention of presenting a winding up petition. We find that the claimant contributed to his dismissal to the extent of 65%. The basic award and the compensatory award will be reduced accordingly. Breach of Contract – Notice Pay

[115]The first respondent has not provided any response to the claim and has not attended at this hearing in order to advance any defence to the claim for breach of contract.

[116]We are satisfied that the claimant was entitled to some notice upon termination unless we were satisfied that the claimant was, himself, in repudiatory breach of contract. We are not so satisfied. Therefore the claimant was entitled to notice. Issue 3- Protected Public Interest Disclosures (‘Whistle Blowing’)

[117]In dealing with this issue, when we consider the factual issues about whether the claimant made disclosures 1, 2, 3, 4, 5 or 6, in parallel we will consider whether the claimant reasonably believed that the disclosures were in the public interest and whether he reasonably believed that the disclosures tended to show that a criminal offence had been committed or is likely to be committed or a person was failing or likely to fail to comply with any legal obligation or there had been concealment.

[118]Disclosure 1 is an allegation of a series of disclosures, generally verbal, that the employment of Ms Di Mao and Mr Kun-Hang Ho (also known as Lucky) was illegal and fabricated in order to obtain loans from them. It is alleged that there was a written disclosure on 17th February 2023 (page C 76) and verbal disclosures to the third and fourth respondents and to Mr Eckert.

[119]There is no doubt that Ms Di Mao and Mr Kun-Hang Ho required visas to work in the UK. There is also no doubt that the first and second respondent wanted them to invest money in the business. In March 2021, the claimant on behalf of the GD group of companies, was involved in instructing UVIC Ltd to assist in obtaining the visas. He signed the agreement on 10 March 2021 and sealed it with the GD Concepts Ltd company seal (page R 45). He sent a large amount of documentation to UVIC. On 23 March 2021 the third respondent sent a draft job description to the claimant saying that Ms Di Mao’s salary would be £35,000 per year and he sent it on to the fifth respondent stating “he will send advert back to you tomorrow” (page 46). The fifth respondent then sent an email to the third respondent, copying the claimant, which stated “updated Job Description incorporating the requirement for Chinese speaking for negotiations with investors and material supply”.

[120]On 17 May 2021 Mr Carter sent copies of the company’s accounts to UVIC.

[121]On 21 July 2021, the Home Office granted GD Concepts Ltd’s application to become a licensed sponsor under the skilled worker immigration route.

[122]There is no doubt that it took some time to employ Ms Di Mao as she began work in February 2023. Somewhat curiously the company which she was being employed by (which appears to have been the first respondent) could not afford to pay her salary. Therefore she was required to pay six months of her own salary upfront to the company for it to be paid back to her as wages. We have struggled to understand why anybody would want to enter into such an arrangement. The third respondent explained that it was because Ms Di Mao had invested money in the company and wanted to be an employee so she could check the books. We are sceptical of that explanation. We consider it more likely that a person who had invested money in the company would be unwilling to pay a further £21,000 to become an employee simply to inspect the books. Nevertheless, it is not our function to decide whether the arrangement did contravene any immigration laws. We are entirely satisfied that the claimant was fully aware of the arrangement and the contemporaneous documentation shows that he was going along with it. Further, not only was he going along with the arrangement (having and completed the application and provided much of the necessary back up documentation needed to approve the Visa) the claimant was asking Ms Di Mao (and Mr Kun-Hang Ho) to make further investments into the company.

[123]Mr Kun-Hang Ho was employed from 22 February 2022 in a senior buyer role. The third respondent’s evidence is that because the first respondent lacked funds to pay his wages, she loaned £30,000 to the first respondent to cover his salary.

[124]It is necessary to consider the allegation that the claimant told Mr Eckert in May 2023 that if the salaries of Mr Kun-Hang Ho and Ms Di Mao were paid he would go straight to the police.

[125]We heard from Mr Eckert who flatly denied that allegation.

[126]On 20 March 2023, Mr Kun-Hang Ho wrote to the claimant stating that there was no problem with him transferring £80,000 before Friday but that he needed to receive his salary for that month (page R252). The claimant forwarded that email to Mr Eckert and asked him to pay Mr Kun-Hang Ho’s salary. If the claimant was so concerned about the legality of the arrangement that in May 2023, he threatened to go to the police, it is difficult to see why he would be willing to pay Mr Kun-Hang Ho in March 2023. He told us that he did so because “there was “a gun to my head” on March 28th, referring to the need to get Mr Kun-Hang Ho’s investment of £80,000. We do not find that to be credible. If the claimant really had been so concerned about the alleged visa fraud that he was threatening to go to the police, we find that would have overridden his desires to get a further £80,000 out of Mr Kun-Hang Ho. Moreover, when asked why salary payments had not been made in April, as set out above, the claimant gave the explanation of lack of funds (R147). He did not give the explanation that it was because Ms Di Mao and Mr Kun-Hang Ho had been employed illegally. We reject Mr Carter’s evidence in this respect.

[127]The only documentary evidence which the claimant relies upon is page C76, in an email of 17 February 2023 he wrote as follows: I have not had a response from Lucky reference the below email. Can you chase? We also need to review what he is achieving for the company in view of the redundancy we are presently undertaking.

[128]That is not a disclosure of information that shows that a criminal offence or breach of legal obligation is being committed or has been committed. The respondent say that in context it shows that he was simply chasing funds again. We agree.

[129]There is simply no evidence that the claimant made any disclosures about the alleged illegal visas before he was suspended and we find that he did not do so. We find that the claimant was entirely happy with the employment arrangements until after he was suspended. It was only when he had been suspended that he alleged that there had been illegal activity.

[130]Thus we find that disclosure 1 was not made.

[131]In respect of disclosure two, it is alleged on 31 May 2023, the claimant stated to the fourth respondent that genuine staff were struggling to pay their mortgages and rents but he was not paying Mr Kun-Hang Ho and Ms Di Mao “because they are illegal”. The fourth respondent denies that allegation and for the reasons we have given in respect of disclosure 1 we prefer his evidence over the claimant’s.

[132]This disclosure was not made.

[133]The next alleged disclosure is that at a board meeting on 14 June 2023 (the evidence appears to have been that it was on 13 June 2023) the claimant and Mr Lumb provided evidence to show that the current financial position of the first respondent was that it was insolvent because of the impending actions in the written resolution and insolvency advice should be taken.

[134]The claimant’s witness statement does not address this point at all. At paragraphs 104 and 105 he simply states:104. On 11 June 2023 NL wrote to me, R3 and R4 regarding insolvency of R1 if all the actions of the written resolution were carried out. 129

105. 14 June 2023 a Board Meeting was held with me, NL and R3 (latterly Julie Carter) where it was agreed that solvency advice should be taken due the contents of the written resolution. During this meeting I demanded to know what was sent to HTB. R3 replied "I do not know, and it was R4 who sent it".

[135]Thus, on the claimant’s evidence, there is no evidence that he made any disclosure at the board meeting (and we have not seen any minutes of the board meeting).

[136]As we have said above, on 11 June 2023, Mr Lumb set out to the claimant and the third and fourth respondents what he says the effect of the proposed resolution would be (page C 129). It is possible that both Mr Lumb and the claimant would have said something similar at the meeting on 13 June 2023. In order to be as fair as possible to the claimant, we have considered whether we would have found a protected disclosure if the claimant had repeated the contents of that email at the board meeting.

[137]There is no doubt that the email contains information. It includes a statement that, with the exception of the HMRC payment plan, Mr Lumb considers there was still sufficient profit or cash available to pay back all suppliers, banks and investors. He says that the steps that will be taken in the coming week will have a huge impact on the next three months and recommends that before taking those steps there is a need to take advice from an insolvency practitioner. However, he does not say that he believes the information in his letter tends to show that any criminal offence had been or was likely to be committed or that any person had failed or was failing to comply with a legal obligation.

[138]We have given anxious consideration to the question of whether it can properly be said that the letter discloses information that a person is likely to fail to comply with any legal obligation. It might be argued that it is implicit in the statement “I think we need advice from an insolvency practitioner to guide us…” that its author thinks that it is likely that there will be a breach of a legal obligation, however we do not consider that to be the case. People approach insolvency practitioners for a range of advice, including about company restructuring, entering into voluntary arrangements, administration or voluntary or compulsory liquidations. We find that there is nothing in the email which indicates that there was a risk of a breach of a legal obligation. The email certainly raises the risk that Atelier Homes Ltd will become insolvent, but insolvency does not, of itself, indicate breach of a legal obligation.

[139]Of course, the question is not whether the email disclosed information which tended to show that a person was likely to fail to comply with any legal obligation, but whether the claimant reasonably believed that it did. The claimant has provided no evidence in this respect. Therefore, we can only find that he believed what is set out in the letter. As we have said, the letter does not disclose information that a person is likely to commit a criminal offence or breach a legal obligation.

[140]Thus, even if the claimant had told us that in the meeting on 13/14 June 2023 that he repeated the contents of the email of 11 June 2023, we would not have found that amounted to a protected disclosure.

[141]It is alleged that the claimant’s solicitors’ letter of 13 July 2023 to the first respondent was “clearly insolvent” amounted to a protected disclosure.

[142]The letter appears at page C 156. It is a letter which not only sets out that Atelier Homes Ltd is at risk of insolvency, but also sets out that the duty of directors to creditors of the company has been engaged. It contains the following paragraphs: It is without a doubt that, applying the facts of the matter relating to Atelier Homes to the above, the duty is triggered in the case of Atelier Homes. This cannot be ignored by my client and he intends to comply with his obligation. Mr Muggeridge is also bound by this obligation and will have no option but to do the same. Failure to do so would put Mr Muggeridge in breach and at risk of sanction or potential director’s disqualification on this basis. … It is widely recognised that professional advice is essential and company directors should not seek to rely solely upon their own judgement where there is a trigger for the creditors’ interest duty. It is my understanding that you have failed to engage with the advice of Ken Touhey of Insolvency and Recovery Ltd or move forward with engaging with the process of his being instructed to act further. Summary Position My client remains a Director of Atelier Homes. My client owes obligations to creditors and given the financial position of the company the creditor’s interest duty is triggered. My client will comply with his obligations in respect of the creditor's interest duty incumbent upon him. Ken Touhey will be instructed to act and advise further, my client has authority by way of his office as a company director to do this. The purpose of this letter is to set out to the position of my client in respect of his obligations to creditors and that he will comply with this duty and by way of discharging that duty that is to instruct Ken Touhey to act further. Without wishing to appear trite, you are either with my client in doing this or against him. There can be no middle ground given the circumstances of the group as a whole. It is the view of my client that acting together is in the best interests of Atelier Homes and the wider group. This is consistent with advice that I understand Ken Touhey has already provided albeit you have refused to attend any meeting to listen to the same. If you do not engage in a cooperative manner and in accordance with the advice of Ken Touhey the insolvent administration of Atelier Homes will be unavoidable. The impact of this will be group wide. If Atelier Homes fails it would by way of appointed administrators call in the debts of the company and pursue those debts - the primary debts being from Atelier Group Investments Ltd, GD Heatherlea Ltd, and GD Church Lane Ltd. In the event of Atelier Homes failing it would have the unintended consequence of acting as a barrier to Atelier Group Investments Ltd from being able to pursue or obtain its commercial objectives. It is my understanding that the failure of the group as a whole would likely follow. My client wishes to see the financial position of the group resolved with the support of the financial director and advice of Ken Touhey. This is not a personal matter between my client and yourself, it is a plea for you to follow the advice of financial professionals advising Atelier Homes and the wider group. Next Steps Please acknowledge receipt of this letter and confirm to my client that you will engage and come to the table with my client, Dean Muggeridge, the Director of Finance and Ken Touhey for the reasons set out above.

[143]Again, the claimant has not said what he reasonably believed this letter showed, in terms of the commission of a criminal offence or breach of a legal obligation and we can only infer any belief from what he said in the letter. The letter is much fuller than the letter of Mr Lumb and sets out the legal obligations on the directors of Atelier Homes Ltd but it does not suggest that Mr Muggeridge (the only other director of Atelier Homes Ltd) is likely to breach any legal obligation. Indeed, the letter expressly states that its purpose is to set out the position of the claimant but goes on that if recipients of the letter do not engage in a cooperative manner with Mr Touhey the administration of Atelier Homes Ltd will be unavoidable.

[144]The letter does not, on close analysis, disclose information that a criminal offence is being or is likely to be committed or a person is failing to comply with any legal obligation or likely to do so and it does not suggest any concealment. That being the only evidence we have, we do not find that in that letter, the claimant made a disclosure of information which he believed tended to show those things.

[145]It is alleged that on 14 July 2023 the claimant wrote to HTB and others disclosing details of the unlawful visas for loan scheme. The claimant says that he set out the information pages 214-216.

[146]Part of what the claimant wrote is “…these transfers happened for both and Di Mao was appointed as employed on 1st March 2023.I refused to pay either Di Mao or Lucky [Mr Kun-Hang Ho] from that point onwards as I had clear concerns over the legality of the Working VISAs being obtained.” That statement was untrue, as we have set out above the claimant paid Mr KunHang Ho in March 2023 (after he had invested £80,000) and stated that the only reason they had not been paid in April 2023 was because of a lack of funds.

[147]We find that had the claimant been genuinely concerned about visa fraud he would have done something much sooner than he did. We find that the claimant only raised these allegations once he had been suspended and because he was angry at the way he had been treated. We do not accept that the claimant believed that any of the information which he had disclosed tended to suggest that a criminal offence had been, was being or was likely to be committed or that a person had failed, was failing or was likely to fail to comply with a legal obligation or that there had been concealment of information tending to show those things.

[148]It might also be said, having regard to the list of issues, that this disclosure was not made to the claimant’s employer. The claimant has not relied upon the other parts of the Employment Rights Act 1996 which permit disclosure to people who are not the claimant’s employer. Given that the claimant was legally represented at the hearing when the list of issues was created and that the list of issues was sent to the claimant on a subsequent occasion, we do not consider that this is an unfair point to make.

[149]In respect of disclosure 6, the claimant relies upon a letter from his solicitors dated 15 August 2023 which made further allegations of an unlawful visas scheme.

[150]We find that this letter was sent as part of Mr Carter’s ongoing attempts to put pressure on the third and fourth respondents to operate the first and second respondents in the way that he wanted to. It was entirely consistent with his threat to the respondents made on 7 July 2023 (page R 210). For the reasons we have given in paragraph 145 we do not believe that Mr Carter had a belief that the information he was disclosing tended to suggest that a criminal offence had been, was being or was likely to be committed or that a person had failed, was failing always likely to fail to comply with a legal obligation or that there had been concealment of information tending to show those things.

[151]Given our findings that the claimant has not made any protected disclosure it is not necessary for us to go further. However, in case we are wrong in our conclusions set out above, we set out in the alternative our findings on the other issues. Issue 4- Whistle Blowing Unfair Dismissal (s103A of the Act) - Claim Against First and Second Respondents

[152]We are entirely satisfied that when Mr Muggeridge made the decision to dismiss the claimant, he was only doing so for the reasons which were recorded in the minutes of the disciplinary meeting as we have set out above. The principal reason for the claimant’s dismissal was not any of the alleged disclosures. Issue 5- Whistle Blowing Detriment (s 47B of the Act)

[153]Detriment 1- it is true that on 5 June 2024, the fourth respondent sent an email to Hampshire Trust Bank (HTB) which resulted in the first respondent’s account being referred to the bank’s business support unit. The emails, which appear in redacted form at page C 119, set out allegations of wrongdoing by the claimant in the way he had dealt with the respondent’s finances and concerns about his activities. The emails were sent before alleged disclosures 3, 4, 5 and 6 were made and so can, at most, have been motivated by the alleged disclosures about illegal working/ visas. The emails sent by the fourth respondent make no reference to the visas or any alleged illegal working.

[154]The fourth respondent explained to us that on the last Friday of every month the bank had a meeting on-site with the directors. He had attended the meeting at the end of May 2023. The representative of the bank had expressed concern about the fact that more funds had been drawn down under the loan facility than should have been- having regard to what stage the building work had reached. The loan, as we understand it, was to be drawn down in stages commensurate with the work carried out. The fourth respondent says that the representative said that an advance had been released for a kitchen to be installed but the kitchen had not been installed and it amounted to a “mistrust”. The fourth respondent said that he and his wife (the third respondent), following that meeting were extremely concerned. They were liable under personal guarantees in respect of the bank loans and if it was suggested they were guilty of behaving inappropriately it could have significant ramifications for the other work they were involved in and their indebtedness to the bank. They decided to contact the bank and set out what they understood to be the position which they did in the emails of 5 June 2023. That explanation is entirely credible and a much more likely explanation than them simply wanting to do the claimant down because he had made disclosures about alleged illegal working. Thus, we accept the fourth respondent’s explanation and do not find that the sending of emails was in any way influenced by the alleged disclosures (which we have not found proven in any event).

[155]Detriments 2 and 3: It was clarified that detriments 2 and 3 both relate to the draft resolution of 7 June 2023 and its implementation on 13th or 14 June 2023. Again, the only disclosures which could have influenced these detriments would be disclosures 1 and 2. We have set out above our findings as to why the third and fourth respondents created and sought to implement the resolution. They were motivated by their concerns as to how the claimant was behaving in respect of the finances of the company. Again, we are entirely satisfied that their behaviour was not in any way influenced by the alleged disclosures.

[156]In respect of detriment 4, the third respondent has explained that she believed that the claimant was trying to push the first respondent into an unnecessary insolvency process against the will of the investors. It is clear that, by now, there had been a wholesale breakdown of trust between the claimant and the third respondent. The third respondent’s refusal to attend the meeting was because she no longer trusted the claimant. It was not because the claimant had alleged illegal working. Moreover, even if we had found that the claimant had made disclosures about the insolvency of the first respondent, we are satisfied that the third respondent’s refusal to attend a meeting with Mr Touhey was not for that reason. The third and fourth respondents were not in any way trying to hide the state of the company, they were fully cooperative with the bank and willing to be transparent about the entire position, as is clear from the emails of 5 June 2023. The alleged disclosures did not influence, even in a trivial way, the third respondent behaviour in this respect.

[157]In respect of detriment 5, we are satisfied that the third respondent suspended the claimant because of the third and fourth respondent’s concerns about his behaviour within the company and, in particular with respect to finances. That included that the claimant had been in contact with Mr Touhey and wanted the third respondent to attend a meeting with him. It was not in any way influenced by the alleged disclosures.

[158]The alleged detriment 6 flows from the claimant’s suspension. The third respondent wrote to 11 people, including Hampshire Trust Bank, informing them of the claimant’s suspension because she wanted him to have no further influence in the company. That was her motivation, not the alleged disclosures.

[159]In respect of detriment 7, the third respondent emailed Mr Touhey for the same reason, namely that she wanted the claimant to have no more involvement in the company. That was her motivation. We have already set out why she did not attend the meeting which the claimant had arranged with Mr Touhey for 20 June 2023. The same explanation is the reason why the third respondent removed access to the company’s servers for the claimant.

[160]Detriment 8, is an allegation that the claimant was effectively dismissed from the second respondent without payment of notice. He was not. He resigned in June 2023. Moreover, we are satisfied that the dismissal of the claimant from the first respondent was in no way influenced by the alleged disclosures. It was for the reasons which the fifth respondent has given.

[161]In respect of detriment 9, it was inevitable that banks and brokers would be told of the claimant’s suspension and dismissal. We are entirely satisfied that was not because of the claimant had made the alleged disclosures.

[162]In respect of detriment 10, there was a dispute in the evidence as to whether the car belonged to the claimant or the first respondent. The claimant was adamant that it was his car. In those circumstances it is difficult to see any detriment if, after he had been dismissed, the first respondent stopped making car payments. In any event, for the reasons we have given, the claimant’s suspension and dismissal were not, in any way, influenced by the alleged protected disclosures. The non-payment of car payments flowed from the suspension and dismissal.

[163]In respect of detriment 11, we heard no live evidence about the removal of shares although the claimant refers to it briefly in his witness statement at paragraph 156 and in his conclusion. Again, we are satisfied that any of the actions taken by the third and fourth respondent were not because of the alleged disclosures but because of their deep dissatisfaction with the claimant in terms of how he was running the company. In that respect, this is a typical shareholder dispute. It appears that in this dispute the third and fourth respondents got the upper hand, but that does not mean that they were behaving because of any disclosures, and we do not find that they were.

[164]In respect of detriment 12 the loss of future earnings capacity is simply a consequence of those matters which have gone before and not because of any disclosures. Detriment 13 is, also, a description of a consequence of the claimant’s dismissal, not a separate detriment. Likewise, at best, detriment 14 is a description of a consequence following his suspension, although it is difficult to see how decisions being made by creditors and the official receiver can be said to flow from alleged disclosures in any event. Conclusions on Liability

[165]The claim of unfair dismissal succeeds because of the way the appeal was carried out.

[166]The claims of unfair dismissal or detriment because of making a public interest disclosure fail primarily because we find that the claimant did not make any public interest disclosures. If we are wrong in that conclusion, we are satisfied that the actions of the third and fourth respondents were because of their displeasure with the way the claimant had conducted the business of the first and second respondent and, in particular, the financial aspects of the business. The actions of the third and fourth respondent were not in any way because of the alleged disclosures. Likewise, the actions of the fifth respondent were because of his belief in the claimant’s misconduct and not because of any alleged disclosures (even to a trivial extent).

[167]In those circumstances it has not been necessary for us to consider the additional question of whether the third, fourth or fifth respondents were workers within the meaning of the Employment Rights Act 1996 for the purposes of section 47B ERA 1996.

[168]In reality, this was a falling out among shareholders. We have formed no opinion as to who was right or who was wrong in that dispute. We are, however, satisfied that it is not a case where the claimant was subjected to a detriment or dismissed because he had made protected disclosures.

Remedy

[169]The claims of unfair dismissal and breach of contract have succeeded against the first respondent.

[170]We find that the claimant was paid a net salary of £3168 per month plus a car allowance of £750 per month and medical expense insurance of £65 per month. Thus, his net loss of earnings, from the date of his dismissal, is £3983 per month.

[171]In respect of the claim of breach of contract, we accept the claimant’s evidence that he was entitled to 3 months’ notice pay, and therefore suffered a loss of £11,949 when he was dismissed without notice.

[172]In respect of the claim of unfair dismissal, the claimant is entitled to a basic award. We accept the claimant’s evidence that he was employed for 4 years whilst over the age of 41 and therefore he is entitled to 6 weeks’ pay capped at £643 per week, amounting to £3858. Because of our findings, the claimant is entitled to 35% of that award being £1350.30.

[173]The claimant is also entitled to a compensatory award based on the six weeks it would have taken the respondent to fairly dismiss him. At £3983 per month, the claimant suffered a loss of £5974.50 over 6 weeks. 35% of that amount is £2091.08.

[174]In addition, the claimant had not been provided with a statement of his terms and conditions at the date proceedings were commenced and we award him two weeks’ pay in that respect, again capped at £643 per week, being a total of £1286.

[175]The above sums are payable by the first respondent.