Mr S M Zikri v Fine & Country Richmond Ltd and The Agency Group – TAG Ltd: 2303374/2024

EMPLOYMENT TRIBUNALS

Case No 2303374/2024

Between

Mr S M ZikriClaimant

Fine & Country Richmond Ltd and The Agency Group – TAG LtdRespondent

Before

Employment Judge Tsamados

Mr P Ward (instructed by Counsel) for claimant

Date 24 April 2025

JUDGMENT

The Judgment of the Employment Tribunal is as follows:

[1]The Claimant was not an employee of the Respondents at the relevant time. The complaints of unfair dismissal and wrongful dismissal are therefore dismissed because the Tribunal does not have jurisdiction to determine them;

[2]The Claimant was a worker of the Respondents at the relevant time. The Tribunal has jurisdiction to determine his complaints of unauthorised deductions from wages, entitlement to annual leave and failure to provide him with written particulars of employment;

[3]The matter will be listed for a further hearing to determine liability and if appropriate remedy for those complaints.

REASONS

[1]The procedural history of this matter is set out in the record of a preliminary hearing which took place on 22 October 2024 in front of Employment Judge Ramsden. I do not propose to repeat it here. Page 1 of 20

[2]The Claimant has brought complaints of unfair dismissal and wrongful dismissal in respect of notice pay, unauthorised deductions from wages, entitlement to annual leave and failure to provide written particulars of employment. The claim is against the two Respondents, one or other, or both of which he alleges employed him. The Respondents, in short, deny the claim on the basis that the Claimant was neither an employee or worker as required for the purposes of the complaints brought.

[3]The matter was initially listed for a full hearing in February 2024 but this was subsequently reviewed and the case was set down for a public preliminary hearing to take place on 22 October at which the Tribunal would determine the Claimant’s employment status.

[4]However, it was not possible to proceed with that hearing on the day due to lack of preparation by both parties, although primarily by the Respondents. This is also set out in the record of that hearing.

[5]EJ Ramsden consequently converted the matter to a private preliminary hearing for case management at which she set the matter down for final hearing, to take place on 3 and 4 February 2025, as well as making case management orders so as to prepare the matter for that hearing. The complaints and issues

[6]The complaints and issues have been set out by EJ Ramsden at pages 10 to 14 of the record of the preliminary hearing which took place on 22 October 2024.

[7]In essence, the Claimant alleges that he was unfairly constructively dismissed and is entitled to unpaid wages in respect of work undertaken but not paid, unpaid holiday pay, unpaid sick pay and notice pay. The Respondents allege that the Claimant was engaged as an independent contractor and his engagement ended by reason of his resignation. As a result, they further allege that the Claimant is not entitled to any of the amounts he says are due to him.

[8]In effect, the Respondents are saying that the Tribunal does not have jurisdiction to determine what is in effect commercial dispute between the parties. Documents and evidence

[9]I was provided with a number of documents some of which I was only able to obtain during the morning of the first day of the hearing. The Claimant provided a bundle of documents consisting of 310 pages. However rather than placing all the documents in a single PDF file, these were contained in a series of three Word folders, and then within sub-folders of each, in which the documents were identified by reference to their item numbers, as opposed to their page numbers, in the bundle index. Some of them are PDF documents, some are Word documents, some are PNG files, some are emails or Outlook items and some are JPEG files. This led to some delay in Page 2 of 20 navigating the bundle and with the best will in the world was not a helpful way to present documents.

[10]I will refer to documents within the bundle by reference to their item numbers given that the documents within the Word folders contain no pagination.

[11]Within the bundle were witness statements from the Claimant and Mr Sean Barrett, who is a Director of both Respondent limited companies. Indeed, I heard evidence from the Claimant and Mr Barrett by way of their written statements and in answer to oral testimony.

[12]There are a number of additional documents which I will only refer to if necessary to do so.

Preliminary matters

[13]On the morning of the first day of the hearing, Mr Ward raised an issue of the waiver of legal professional privilege by the Respondents. The position put forward was as follows. Bundle item 139, an email from Mr Barrett to the Claimant, refers to advice given by his legal team, Healys Solicitors. This document was only disclosed the Friday before this hearing.

[14]The email was sent in the context of the dispute between the parties as to alleged monies owing to the Claimant by the Respondent and by the Claimant to the Respondent (which is a matter that is dealt with in my findings of fact).

[15]Mr Ward submitted that in disclosing this document, the Respondents had waived legal professional privilege; the litigation under contemplation being the “money owed” as referred to in the subject box of the email. As a result of its disclosure, Mr Ward asserted that the Respondents were to disclose the advice given and documents relating to it.

[16]I explained the issue of privilege to Mr Barrett. His position was that he believed that this advice was an informal verbal communication with one of the conveyancing solicitors at Healys, who has since left and is now with another firm of solicitors. He did not believe that anything was put in writing but would need to check his records.

[17]I adjourned to read the witness statements and referenced documents and to allow Mr Barrett to make enquiries as to the advice given as well as, at my suggestion, to take legal advice as to the position regarding privilege.

[18]During the break, Mr Barrett sent an email to Mr Ward and to the Tribunal, which stated that he could not find anything that he had received from Healys regarding advice given and that his position was that he believed he sounded them out for general advice, whilst discussing formal matters and certainly did not go into detail, did not receive any instructions on what to do or engage them formally to assist with the matter.

[19]On resuming the hearing, Mr Ward said that the Claimant was taking a pragmatic view and was keen for the case to proceed and rather than making a formal application for third-party disclosure from the solicitors, who would Page 3 of 20 have kept records even of casual advice, which in turn could lead to the hearing being postponed, he would not be pressing the matter.

[20]Whilst I was grateful for this concession, I would point out that as a result of this I did not actually start hearing any evidence until 11.50 am on the first day, albeit I had to read into the case. However, Mr Ward returned to the issue at the end of the first day of the hearing, during his cross examination of Mr Barrett. Conduct of the hearing

[21]The hearing took place by way of Cloud Video Platform. I heard evidence from the parties on the first day and part of the morning of the second day of the hearing. I then heard submissions from both representatives.

[22]I initially proposed to give oral judgment at 3 pm and to deal with remedy on another day if appropriate to do so. Mr Ward indicated that this was not a straightforward matter and suggested that I adjourned today, give a reserved judgment and set a provisional date for a half day remedy hearing, if needed.

[23]I therefore adjourned to give a reserved judgement to later date. I indicated to the parties that I would set a provisional date for a remedy hearing if required for 3 April 2025. However after the hearing, I discovered that this date was not available. Unfortunately, this was not conveyed to the parties.

[24]In the event, the evidence and submissions that I heard really only addressed the issue of the Claimant’s employment status and to a limited extent whether or not he was unfairly constructively dismissed and so what follows from this decision will be determined at the further hearing.

[25]I would apologise to the parties the time it has taken me to finalise and send my judgement. This was due to my part time work pattern and volume of work.

Findings of Fact

[26]I decided all the findings referred to below on the balance of probability, having considered all of the evidence given by the witnesses during the hearing, together with documents referred to by them. Any failure to mention any specific part of the evidence should not be taken as an indication that I failed to consider it.

[27]I have only made those findings of fact necessary to determine the issues. It has not been necessary to determine every fact in dispute where it is not relevant to the issues between the parties.

[28]The Claimant was engaged by the first and potentially the second Respondent, both real estate agencies, as a Real Estate Agent, from 1 December 2020 until he resigned with immediate effect on 3 February 2024.

[29]Mr Sean Barrett is the Director and sole shareholder of the first Respondent. Mr Barrett and Mr Dannie Walton are Directors and joint shareholders of the Page 4 of 20 second Respondent. It would appear from the evidence that I heard that these companies very much operated in tandem, with joint administrative staff and Agents.

[30]As I understand it, Fine & Country is a national umbrella company of estate agents to which, in effect, individual estate agencies are franchised or licensed and are then, within the terms of use of their franchise or license, able to operate under the Fine & Country name and in particular geographic areas or postcodes.

[31]The first Respondent holds the franchise/licence for the Richmond area. The company deals with the buying, selling and renting of high end grand/luxury accommodation. It obtained its franchise/licence in November 2019 but was not operational straightaway due to the Covid-19 lockdown in February/March 2020. 90% of the enquiries or “leads”, as they are referred to, are from prospective buyers.

[32]The second Respondent is a smaller operation than the first Respondent and deals more with the new build market in the Brentford, Ealing, Isleworth and Chiswick areas.

[33]The first Respondent employs a number of administrative staff but they worked for both Respondents. The first Respondent invoices the second Respondent for the use of those staff at a rate of approximately 50% of the cost of their employment. At the time that the Claimant left the Respondents’ engagement approximately 8 to 10 people worked for the first Respondent (and turn for the second Respondent) either as employees or self-employed agents.

[34]The Claimant has worked in real estate for over 10 years. He has known Mr Barrett and Mr Walton for that length of time. Mr Barrett was his first manager when he worked for a previous firm of estate agents. Mr Walton joined that firm later the same year. They worked together for five years and then went their separate ways.

[35]In February 2020, the Claimant and Mr Barrett were in contact regarding the possibility of working together again. They met up and Mr Barrett explained that he had decided to start his own real estate company and had bought the rights to use the Fine & Country name in the Richmond area and outlined a position for the Claimant within the company.

[36]I was referred to bundle items 1 to 5, a series of WhatsApp messages between the Claimant and Mr Barrett on 24 February 2020 in which they discussed the arrangement and the fee structure.

[37]The gist of the arrangement was as follows:a. It would be a trilateral contract between the Claimant, Mr Barrett and the first Respondent; Page 5 of 20

b. The Claimant would be seeking to rent properties initially in the Richmond, Kew and Twickenham areas (in which areas Mr Barrett assured the Claimant that they had stock ready to go);

c. There would be no basic pay but he would receive 60% of the lettings fee, Mr Barrett would receive 30% and “F&C HQ” would receive 10% (although it was not absolutely clear I believe this is a reference to the Fine & Country umbrella company);

d. Eventually the arrangement would apply only to areas that the Claimant selected and the fees would be split 50:50 on each other’s patches.

[38]On 1 March 2020, the Claimant commenced his role under this arrangement. Mr Barrett’s evidence is that he came into the office and started in the capacity of a self employed agent for the first Respondent. This fell at the start of the first Covid-19 lockdown. As a result, the Claimant did not actually commence any work for a number of months but the two of them remained in contact.

[39]In October 2020, the Claimant and Mr Barrett met again. Mr Barrett advised the Claimant that he was launching a new company with Mr Walton, namely the second Respondent company.

[40]The Claimant ultimately began working under the arrangement with both Respondents in around November 2020. There was no written contract between the parties but the arrangement extended to seeking to buy, sell or rent properties to clients. The Claimant said that he trusted Mr Barrett, they had been friends for years and the terms of employment seem straightforward reasonable. Mr Barrett’s position is that throughout the entirety of the Claimant working for both brands he was always acting in a self-employed capacity. The only difference between the brands (the two Respondents) was the split of fees.

[41]On 11 April 2021, Mr Barrett sent an email to the Claimant and the other Agents. In that email he explained that because of issues surrounding the HMRC IR35 rules, it would be best for each of them to create limited companies which would operate under the second Respondent’s brand. This document is at bundle item 5. In reality, Mr Barrett was stating that in order to avoid those persons having income tax deducted at source and obligations on the Respondent to do assess and pay this, they should effectively set up limited companies as a way around it. By way of comment, I have to say that I am not sure that this suggestion would have achieved the desired effect.

[42]The Claimant did not respond to this email or do anything about it because he was concerned about the legality of the proposal and was advised by relatives and friends not to do so. However, it does not appear that this matter was pursued any further by either party.

[43]The Claimant was provided with company email addresses for both Respondents and given access to company portals and software to assist him with searching for properties that were for sale or to be rented and in Page 6 of 20 locating the owners. He was also provided with training on how to use these portals and software.

[44]The Claimant was regularly emailed and sent texts by WhatsApp from the Respondents containing leads for properties. Whilst these were from a variety of sources they were sent to him either directly from the Respondents or via Moneypenny (see below). The Claimant in addition followed his own leads. It was his role to get in touch with these potential clients and discuss their property needs with a view to securing them as clients in the sale, purchase or rental of properties. It was on successful sales, purchases and rentals that he secured a fee and in turn obtained his share of the fee. Clearly, it was in the interests of both the Claimant and the Respondents that he got back to each and every client in a timely manner. It was certainly in the Claimant’s primary interest to secure deals given that his remuneration depended on it.

[45]The Respondents use a central answering system called Moneypenny which, as I understand it, is in effect an automated telephone secretarial system. Prospective clients of the Respondents would call their telephone numbers having seen properties advertised online but their calls would be diverted to Moneypenny and then to a particular Agent, if one was named in connection with that property. If that Agent did not answer the phone call, Moneypenny would then generate an email message to the Agent advising them of the enquiry. If there was no named Agent, the enquiries would be sent to a generic inbox which the Respondents would then directly to particular Agents for the particular area that property was located in.

[46]In addition if enquiries from prospective clients came via RightMove and Zoopla, they would go to Mr Barrett and Mr Walton and they would then allocate these to the Agent working in that particular area.

[47]The Claimant either worked from home or from the Respondents’ head office in Twickenham. He could go there anytime for support or to get branded merchandise to assist with his role. This consisted of business cards, diaries, stationery, headed note paper and magazines to give to clients which showcased the service provided by the Respondents along with terms and conditions.

[48]The Claimant was also given branded clothing that he wore to client meetings. I was referred to bundle item 160 which consists of two photographs, one of two gilets containing the second Respondent’s logo and the other of the Claimant wearing a branded gilet. In oral evidence the Claimant said that whilst these were provided to him he was not suggesting was compulsory to wear them and it was down to his discretion to use them when he saw fit.

[49]The Claimant was effectively free to determine where and when he worked and when to take breaks. He could choose what days to work although he tried to fit things into working a Monday to Friday week. The only obligation to attend the office was to attend the training and team meetings. Page 7 of 20

[50]The Claimant controlled his own diary and determined what he did, for example viewings or valuations. He could set these at times convenient to him/his clients and any viewings or valuations could take place late in the evenings if necessary. The thrust of what he did and when was dictated by the need to secure a client, particularly if a property was also being marketed by another estate agency.

[51]When taking on selling clients, Agents were free to agree a lower agency fee than the standard 2.5% plus VAT and the period of lock-in to the agency and other personal terms.

[52]There were weekly meetings held by Mr Barrett at the Respondents’ headquarters at which all employees were required to attend. The Claimant was not always able to attend and on occasion had to inform Mr Barrett of the reason why and to let him know that he was unable to attend. I was referred to various text messages at items 15, 16, 18 and 19 of the bundle in support of this.

[53]The Claimant’s position is that it was important to Mr Barrett everyone attended these meetings as it was an opportunity to provide team training and offer inspiration and motivation for the work they were doing. In addition the team share ideas. The Claimant’s further position is that he had he simply not turned up, Mr Barrett would wonder where he was. I was referred to item 21 of the bundle which is a WhatsApp message from Mr Barrett to the Claimant asking him if he was still alive during a time when he had not been in contact with him.

[54]The Respondents created a biography for the Claimant and put the details on the company website along with a photograph and title. I was referred to item number 155 in the bundle in support of this. This shows photographs of Mr Barrett and the Claimant as well as others on the second Respondent’s website. The Claimant is described as a “Partner”.

[55]Indeed on various email sign offs, the Claimant is described as either a “Partner” or a “Director” although these titles did not have the formal meaning that one would necessarily tribute to either of those words.

[56]Throughout his engagement with the Respondents the Claimant paid his own income tax and National Insurance to HMRC on a self-employed basis. He initially submitted invoices, in respect of his fees on properties, to the Respondents for payment, although I have not been provided with any copies of these by the parties. The invoices were addressed to Mr Barrett although I was not told whether this was in the capacity as Director of one or both of the Respondent companies. Payment was made variously from one or other of the Respondents. Latterly, the Claimant was not required to submit invoices for payment.

[57]Certain deductions were made by the Respondents in respect of items such as marketing costs. I was told by the Claimant that this was initially £250 per property and then in varying sums, dependent on the size of the property, and covered such matters as marketing, photography floorplans and videography. The Claimant did not dispute that marketing costs were Page 8 of 20 payable but was more concerned that he was not provided with any breakdown of what it covered and simply had to accept it.

[58]Mr Barrett’s evidence is that there would be spells when they would see the Claimant perhaps three or four times a week and then there would be weeks where they would not seem at all. I accept Mr Barrett’s evidence in this regard but I would add that Mr Barrett said that this was not an issue for the Respondents because the Claimant had no working hours or requirements to spend each day in the office and it was up to him how he structured his working days.

[59]Mr Barrett’s further evidence is that when he worked with the Claimant previously there was an issue with him not calling clients back and unfortunately this was something that continued in his role with the Respondents. As a result, the Respondents would often get messages from frustrated or irate clients stating that they could not reach the Claimant (where he was named as the Agent) and he was not calling them back. I accepted Mr Barrett’s evidence given what follows.

[60]Mr Barrett said that whilst the Claimant was a very good agent he did not consistently perform and on occasions would “go missing entirely”, as he put it. He further stated that whilst it was a self-employed model, it was very damaging for the brand and often had a detrimental effect on the business and its Partners, as clients often had homes in multiple locations.

[61]Mr Barrett’s further position is that towards the end of the Claimant’s time with the Respondents, issues began to mount up and he had to give the Claimant an ultimatum that if he received one more complaint about him not returning calls then he would end their relationship.

[62]This is referenced in Mr Barrett’s email to the Claimant dated 11 December 2023 at bundle item 93: “I’ve just tried calling you to discuss the ongoing saga that you seem to create. Dannie and I have discussed this situation that has arisen for the umpteenth time and have both agreed that this is the final straw. You are literally taking the piss out of us with your complete lack of respect to what we have built and we cannot tolerate it further. If you can’t be bothered to call people back then go and do it with someone else’s brand, it’s not going to be accepted here. I am requesting confirmation in writing of your intentions by 10am tomorrow. If you are staying with us then great, but it’s going to require a basic level of performance is met, including calling people back! If you don’t feel up to it, then no hard feelings, deals will be paid as agreed but we part ways immediately. If you don’t respond by 10am then I’ll take that as the latter.”

[63]The Claimant’s position is that this came out of the blue without there being any previous warnings and so he believed it to be very unfair as well as evidencing the level of control that the Respondents exercised over him. He said that he had tried to contact that particular client but they kept missing each other. Page 9 of 20

[64]The Claimant subsequently contacted Mr Barrett to confirm that he was still “on board”, as he put it. I was referred to bundle item 95, a further email from Mr Barrett to the Claimant dated 12 December 2023. In this email Mr Barrett sets out his ultimatum to the Claimant, that namely if he receives one more message to say that he had not called back a client and was unable to show that he had followed this up with a call, text or email, “that’s going to be it “. Mr Barrett said in evidence that with hindsight he realised his email was overly emotional and he regretted the way he had worded it now.

[65]A further incident took place in which the Claimant did not call back a client amid negotiations on a sale. As a result Mr Barrett suspended the Claimant’s access to the Respondent system and emails.

[66]The Claimant only became aware of this on 20 December 2023 and determined that this was as a result of his not getting back to the same client. The Claimant’s position is that he contacted Mr Barrett and explained that he had attempted to contact this client and even followed up his call with a text message (I was not directed to any documents in support of this). In response he says that Mr Barrett “held his hands up”, as he put it. However, the Claimant asked Mr Barrett to send emails from his account to aide his ongoing negotiations (bundle item 118 is a WhatsApp message from the Claimant to Mr Barrett to this effect).

[67]When Mr Barrett looked at the Claimant’s sent email box, in order to forward emails to him, the first email he found was one from the Claimant to a client asking them to pay him an acquisition fee directly into his personal bank account (at bundle item 101). This amounted to £25,000. Mr Barrett said he was in total shock at reading such an email and equally upset given that given they were more than just colleagues, the Claimant was the last person he thought would attempt to “steal” from him, as he put it.

[68]Mr Barrett sent the Claimant a screenshot of the email and they subsequently discussed the matter by telephone during which the Claimant’s position was that he did not believe he had done anything wrong. Mr Barrett was completely confused by this stance on two levels: firstly if, as the Claimant alleged, he was employed by the Respondents, what grounds would you have to ask a client to pay you directly; secondly, on the actual model that the Claimant was employed on, the fees were always paid to the brokerage and dispersed accordingly.

[69]The Claimant’s position is that the buyers of that particular property, an investment property, were very good friends of his and as they felt they were getting a good investment opportunity, they agreed to pay him an acquisition fee. His further position is that Mr Barrett had told him about asking investment buyers for an acquisition fee in the past and so he did not see there was anything wrong in what he was doing. Further, his evidence was that as there was no agreement between them to split any acquisition fees, he never told Mr Barrett about it. The Claimant’s view was that this was a separate agreement with friends separate to his arrangement with the Respondents. The Claimant’s further position is that he never received the acquisition fee (although I am unclear whether this was conveyed to the Respondents at the time of the events in question). Page 10 of 20

[70]Thereafter, there were multiple messages and phone calls between the parties in order to resolve the matter and any outstanding fees owed to the Claimant. The Claimant was seeking payment of outstanding fees on deals relating to certain properties. Mr Barrett’s position was that until the issue of return of the £25,000 paid to him directly by the client was resolved, he would not pay him any outstanding monies. The respective parties’ positions are evidenced in bundle items 119-123, a series of WhatsApp messages between the Claimant and Mr Barrett.

[71]There was further correspondence between the parties regarding the unpaid fees and the return of the acquisition fee. This appears to culminate in February 2024.

[72]By email dated 3 February 2024, the Claimant wrote to Mr Barrett and Mr Walton in which in essence he stated that he resigned forthwith on the basis of a constructive dismissal. The grounds for this were stated to be that he had not received his outstanding “wages”, as he called them, had been denied access to his work emails and the work portal and so it was impossible him to do his job, he had not been invited to any staff meetings and had been deleted from the WhatsApp work groups. In addition, the properties in his patch had been given to another member of the team. The email and one sent earlier on 23 January 2024 set out the amounts that the Claimant said owing to him (bundle item 141).

[73]Mr Barrett believes that he wrote back to the Claimant challenging this letter but there was no such document within the bundle.

[74]The Claimant’s position is that whilst he was never off work due to ill-health he could not send a substitute to work in his place. Mr Barrett stated that if the Claimant was not able to attend he could arrange for other agents to cover his work and they would then split any fee received.

[75]His further position is that if he needed to be away on annual leave, he would let Mr Barrett know when he would be away, he could not simply just disappear without letting the Respondents know. I was referred to an exchange of WhatsApp messages dated 6 September 2023 at bundle item 20 with regard to the Claimant’s travel to San Francisco. This indicates that whilst the Claimant is about to depart on a plane, Mr Barrett was aware that the claim was travelling albeit perhaps had forgotten exactly when.

[76]In an email from the Claimant to Alex within the second Respondent company, the Claimant sent a biography in which he refers to working within the “self-employed model of estate agency” (bundle item 14). In reexamination he clarified that he was not asked to put this down but was simply asked to write a biography. When he was asked why he said that then (as of course he disputes that he was self-employed), the Claimant responded that it was to make the self-employed model look like the way forward, to make it look good. Page 11 of 20

[77]The Claimant was the subject of the complaint made by a landlord of a property. This appears to have arisen in December 2023 but continued after the Claimant had resigned.

[78]The gist of this complaint was that it was alleged that the Claimant’s communications with the landlord were poor, that he unilaterally varied the date of payment of the rent to the landlord by the tenant and had put in incorrect address within the tenancy agreement. It is fair to say that the Claimant does not accept these allegations.

[79]The complaint was investigated under the second Respondent’s complaints procedure (which is an attachment to bundle item 110) but ultimately it was adjudicated upon by the Property Redress Scheme (PRS) as part of what is referred to in the complaints procedure as an independent review.

[80]I considered bundle item 146 in particular which is the Proposed Decision of the PRS dated 9 0April 2024. This states that in consideration of the poor service delivered and the failure in the duty of care owed to the landlord an award of £900 should be paid to the landlord.

[81]The Claimant’s concern is that he was not involved in the process sufficiently and that he believed this to be unfair. Indeed he refers to a number of documents within the bundle which he had not seen before including the PRS Proposed Decision and the award of compensation. Mr Barrett denied this and said that the matter had to be dealt with internally and that they had to engage with each other to conduct an investigation into it. He added that the second Respondent had been found to have manipulated documents and had to pay £900 compensation and that the matter was still under investigation by an ombudsman.

[82]In cross-examination with Mr Barrett, Mr Ward revisited the issue of the email of 3 February 2024 (bundle item 139) in which Mr Barrett had referred to legal advice. Mr Ward put to Mr Barrett that he was using this as a bargaining chip or as some sort of counterclaim to try and reduce the Respondents’ liability to pay the Claimant what he was owed. Mr Barrett denied this. He further put to Mr Barrett that he was basing his refusal to release funds until the matter of the £25,000 acquisition fee was resolved on advice given by his legal team, Healys. Mr Barrett denied this and referred back to his email and what he said at the start of the hearing, in essence that he got verbal off-the-cuff general advice as a result of explaining in very limited terms what the issue was. He had not made a note of it, there was nothing he could find in writing and he could not recall the exact advice given.

[83]At this point at 4:21 pm on the first day of the hearing, almost at the end of Mr Barrett’s cross-examination, Mr Ward made an application for a third party disclosure order. He sought disclosure from Healys Solicitors of any or all legal advice given to and/or any other communications with Mr Barrett or either Respondent in relation to the Claimant between 1 and 3 February 2024. Page 12 of 20

[84]I identified that such an order would fall under rule 33 of the Employment Tribunal Procedure Rules 2024 and that the test was in essence one of relevance and necessity.

[85]Mr Ward said that he acknowledged that seeking such disclosure would delay the process of the hearing but he believed that this is balanced against the need for justice and fairness. He submitted that Mr Barrett was given advice and so there should be a record of this and the firm of solicitors would be able to provide that. Further it will be there, if Mr Barrett is to be believed, and it is absolutely necessary for it to be provided. He further submitted that if I were to find the Claimant to be an employee we would then move on to deal with the test of constructive dismissal. If the Respondents had taken advice and that advice turns out to be false then the dismissal falls under the judgment of Malik v BCCI

[1997] IRLR 462

. HL. If the application is not granted then potential evidence which is there but not made available to the Claimant would cause him prejudice.

[86]Malik states that an employer who operates its business in a dishonest and corrupt manner is in breach of the implied contractual term of trust and confidence and in particular that the trust-destroying conduct extends to any conduct by the employer likely to destroy or seriously damaged the relationship of trust and confidence tween the parties and that the employee does not need to have known of the trust-destroying conduct whilst employed.

[87]There was a short adjournment during which I considered this matter. On resuming the hearing, I told the parties that the Claimant’s application was refused for the following reasons. The request comes very late in the day. The Claimant is not even sure if these documents exist and the application is highly speculative. It cannot go to constructive dismissal because if it comes to light that Mr Barrett was not given such legal advice then the Claimant cannot rely on this because he could only have resigned in response to what he knew happened at that time. I did not believe in the circumstances that Malik was engaged. Moreover, the Tribunal’s overriding objective is to deal with matters fairly and justly and proportionately. To grant such a speculative application would mean having to adjourn for the order to be drafted, served, complied with and the resultant compliance then considered. That would mean having to adjourn these proceedings for some considerable time. Submissions

[88]At the end of the evidence I heard submissions from both parties. These were limited to the issue of the Claimant’s employment status. I do not propose to set these out within my Judgment but would assure the parties that I considered them fully. In summary, Mr Ward submitted that the Claimant was an employee and alternatively a worker, and that he was constructively dismissed, whereas Mr Barrett submitted that the Claimant was self-employed and that I should dismiss the claim.

[89]Given the evidence and submissions heard I decided to limit my conclusions to determining the Claimant’s employment status and if appropriate the issue of constructive dismissal. Page 13 of 20 Essential law

[90]Section 230 of the Employment Rights Act 1996: “(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment. (2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing. (3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—(a) a contract of employment, or

(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker's contract shall be construed accordingly. (4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed. (5) In this Act “employment”— (a) in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and (b) in relation to a worker, means employment under his contract; and “employed” shall be construed accordingly.”

Conclusions

[91]In order to claim unfair dismissal (as well as other rights, such as entitlement to itemised pay statements, redundancy, statutory minimum notice of termination and the ability to bring a breach of contract claim in the Employment Tribunal) a person must be employed (ie work under a contract of service).

[92]A person who is self-employed (ie working under a contract for services) is not entitled to bring a claim, although he may still fall within the definition of worker under section 230(3) of the Employment Rights Act 1996 (ERA 1996) for the purposes of a claim of unauthorised deductions from wages (and under an almost an identical test, entitlement to annual leave under the Working Time Regulations 1995).

[93]There is no clear guidance given by case law by which Employment Tribunals are able to distinguish between those who are employed and those who are self-employed. An “employee” is defined simply as someone who has entered into, or works under, a contract of employment (section 230(1) ERA 1996). A “contract of employment” means “a contract of service or apprenticeship, whether express or implied, and (if it is express), whether it is oral or in writing” (section 230(2) ERA 1996).

[94]There is no single test which determines whether a person is employed or self-employed although there have been a large number of cases which have Page 14 of 20 tried to establish the approach to be adopted to determine this issue. The usual approach taken is referred to as the multiple test which requires all aspects of the relationship to be considered and then to ask whether it could be said that the person was carrying on a business on his/her own account (O’Kelly v Trusthouse Forte plc

[1983] IRLR 369

,CA). The multiple test requires the consideration of a number of factors.

[95]The first consideration is whether there is a mutual obligation to supply and perform work, ie is the employer contractually obliged to provide work and the person obliged to carry it out? This is the most important single factor. If no such obligation exists, then the person is not an employee (Carmichael v National Power plc

[2000] IRLR 43

, HL).

[96]It is also a vital component that the Respondent has a sufficient framework of “control” over the person, although direct supervision and control is absent in many kinds of employment today (Montgomery v Johnson Underwood Ltd

[2001] IRLR 269

, CA) If the person controls when, where and how s/he performs the work, this degree of autonomy would suggest that s/he is selfemployed. However, if the employer has the power to tell the person when, where and how to perform, it would indicate that the person is an employee (Ready Mixed Concrete (South East) v Minister of Pensions and National Insurance

[1968] 2 QB 497

[97]Another factor is that the other provisions of the contract must be consistent with its being a contract of service. The Tribunal needs to consider the purpose of the contract and what the parties intended when they formed it. It is the nature of the agreement and the actual performance of the contract which counts, not simply the label attached to the relationship by the parties. For example, just because a person is told by an employer that s/he is self employed does not mean that is the true legal position.

[98]The method and mode of payment to the person could be a relevant factor. If pay is referable to a period of time rather than productivity, this suggests that the person is more likely to be an employee. He is also more likely to be an employee if he gets paid sick leave and is subject to the usual disciplinary and grievance procedures. However, again this is not necessarily conclusive of employee status.

[99]The above assumes that it is clear what the contract terms are, but this may not be the case. When deciding what terms have been agreed between the parties, the first step is to look at any written contract. This can be a problem. People sometimes sign pro forma contracts which are designed to prevent them from being an employee, eg by stating that there is no mutuality of obligations or that they have the right to send along a substitute (see below). However, if there is evidence of the true nature of the agreement this should be considered (Autoclenz Ltd v Belcher & Ors

[2011] IRLR 820

, SC; Protectacoat Firthglow Ltd v Szilagyi

[2009] IRLR 365

, CA; Consistent Group Ltd v Kalwak & Ors

[2008] IRLR 505

, CA; and Redrow Homes (Yorkshire) Ltd v Buckborough & Sewell

[2009] IRLR 34

, EAT). This was most recently emphasised in Johnson v G T Gettaxi (UK) Ltd

[2024] EAT 162

[100]Certain employment rights apply to “workers”. For example, entitlement to Page 15 of 20 annual leave and holiday pay, the National Minimum Wage and the ability to bring a claim in respect of unauthorised deductions from wages.

[101]If the person is an employee then they will also satisfy the definition of worker. But sometimes the problem is to prove that the person is a worker as opposed to self-employed.

[102]The definition of worker within section 230 (and for other claims reliant on this status) is wider than the restrictive definition of employee. It covers those who have entered into, or work under, a contract of employment and any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not, by virtue of the contract, that of a client or customer of any profession or business undertaking carried on by the individual.

[103]A worker is different from someone who is self-employed. Self-employed individuals can make their own choices as to what work they do and when and where they do it. They work for themselves. Although the practical realities of getting work mean they must satisfy (often quite stringent) requirements of those who engage their services, ultimately the choices are their own to make (O’Brien v Ministry of Justice

[2013] IRLR 315

, SC).

[104]There are three key elements to the definition of worker in the legislation: 1) there must be a contract between the individual and the “employer”; 2) the individual must be required to work “personally” for the employer; and 3) the individual must not be working for someone who is in reality her client or customer. As long as these apply it does not matter if the individual is in business on her own account (Hospital Medical Group Ltd v Westwood

[2012] IRLR 834

CA.)

[105]As a general rule a good distinction will be the difference between an individual who markets her services to the world in general and someone who works in a subordinate position in circumstances where she is integrated into the employer’s business (Windle & Anor v SS for Justice

[2014] IRLR 914

, EAT). Although there are some borderline situations where it is difficult to determine whether a person is a worker, recent case law has the effect that the definition should widely apply.

[106]It is particularly important that the person is required to do the work “personally”. Someone who is allowed to send a substitute to work in his/her place (Premier Groundworks Ltd v Jozsa

UKEAT/0494/08

applying Express & Echo Publications Ltd v Tanton

[1999] IRLR 367

, CA.) However, a limited amount of delegation does not necessarily mean that a person is not a worker, eg that the person can only arrange a substitute if he is unable (as opposed to unwilling) to do the work, or that a substitute can only be provided with the employer’s prior approval (ibid).

[107]It is also important to consider the true contractual position as indicated above. Although any written contract will be the starting point, it may be possible to prove that the document does not reflect the true agreement between the parties. But this will need strong evidence. Page 16 of 20

[108]The definition of worker excludes people who carry on a business or profession where the other party is a client. This would exclude professionals such as solicitors, doctors and dentists and also sole traders and taxi drivers. There can be marginal situations where the person is not in one of these obvious categories yet is working for more than one “employer” at the same time. This does not necessarily mean the person is treating the employer as a client. A good indicator in many, but not all cases, is to consider the extent to which the individual is integrated into the employer’s business (see Westwood above).

[109]In the absence of a written contract, it is particularly important to determine the true nature the relationship between the parties had it been reduced to writing.

[110]Dealing first with the issue of whether the Claimant was an employee.

[111]It appears to me that if one looks at the intention of the parties at the time that this arrangement started it quite clearly was to set up a self-employed relationship and not an employee relationship. This is clear from what Mr Barrett said in evidence and in particular from his email attempting to get Agents to set up their own limited companies so as to bypass difficulties with HMRC under the IR35 process. The Claimant certainly went along with the self-employed arrangement albeit at some point he has come to the conclusion that he was an employee or in the very least a worker. And of course the parties can be placing the wrong label on the relationship, either deliberately or naively. The intention of the parties is of course a factor but is not necessarily in itself determinative of employee status.

[112]The Claimant initially submitted invoices and later on was not required to do so but he received payment of his fee on each completed transaction less deductions of which the only one I heard evidence on was in respect of sales fees. He dealt with his own income tax and National Insurance in respect of this income. Again this is a factor but not necessarily in itself determinative of the matter.

[113]Again I would state that control is a factor but is not necessarily in itself determinative of the nature of the relationship. However, in view of my findings, I do not accept that the Claimant was under the control of the Respondents in the sense of an employee/employee relationship. There was a degree of control but this did not go beyond determining that he essentially did what he was supposed to do, that is to undertake his role professionally, to liaise with the other agents at team meetings and training and to follow-up leads in a proper and timely manner. This would be the same even if the relationship was one of worker or as a self-employed contractor.

[114]The Claimant was essentially free to determine how and when he worked and only receive remuneration in respect of completed sales/purchases/rentals. He had a degree of autonomy which is not in itself indicative of employee status. The manner in which he received remuneration was entirely in his own hands albeit the amount he received was set by the Respondents. Page 17 of 20

[115]The Claimant said that attendance at weekly meetings was compulsory but I note that in his resignation letter he complains of no longer being invited to the meetings. Whilst it might be desirable to have weekly team meetings I was not convinced it was compulsory. Indeed there were occasions on which the Claimant did not attend meetings and whilst his evidence was that had to tell the Respondents where he was, I was more inclined to believe that this was simply as a matter of courtesy.

[116]Clearly on occasions he did not have a presence in the business, as Mr Barrett put it. On a number of occasions this led to Mr Barrett sending him text messages using the words “are you alive” (although I accept that Mr Barrett and the Claimant wrote to each other generally in a casual manner given their lengthy work experience and friendship).

[117]Similarly in the context of the Claimant taking annual leave, the Claimant was advising the Respondents out of courtesy of his intended absences. Indeed the one documentary example of this I have is where Mr Barrett again uses the phrase “are you alive” in querying the Claimant’s absence. On balance of probability I accepted Mr Barrett’s evidence of the Claimant going missing for periods of time.

[118]Whilst the Claimant may have been obliged to attend training regardless of his employee status this was clearly necessary and all the parties.

[119]I considered the issue of the complaint against the Claimant by the landlord of a property. Whilst I did not see it was relevant for me to delve any further into the merits or otherwise of this complaint beyond obviously bearing in mind there had been a determination by the PRS, it appeared to me that this was being relied upon as an indication of the level of control that was exercised over the Claimant by the Respondents.

[120]Having considered the matter, I formed the view that within any profession one would expect there to be some form of regulation of an individuals behaviour whether or not they were an employee, a worker or a selfemployed contractor. This could extend to having an internal complaints procedure and also a right of independent review. In itself, I did not see this to be an indication of employee status. Even a self-employed contractor would be required to behave in a proper and professional manner and if they fell short of that to be subject to investigation, sanction and ultimately their services being dispensed with. In this case, the criticism may been of the Claimant’s conduct but the findings and the sanction were imposed upon the second Respondent.

[121]In terms of mutuality of obligation, my conclusion is that whilst the onus was upon the Claimant to cut deals in order to obtain payment of his fees, he was not put under any obligation to do so but of course would be entitled to a fee if he did complete a deal. He was expected to follow-up leads in a proper and timely manner because this reflected upon the Respondents’ reputation and potentially caused losses to other agents.

[122]Whilst the Claimant did not receive payment in respect of sickness benefits, I heard no evidence that he was off sick. Indeed the only relevance of this Page 18 of 20 point appeared to be whether or not he was able to send a substitute in his absence. In the absence of nothing else, it appears that this never came up and when it was raised with Mr Barrett he said that of course Agents could arrange to cover for each other when absent and to split the resultant fee.

[123]Whilst the Claimant was provided with leads by the Respondents and/or through Moneypenny this was in the nature of the business of estate agencies and he additionally could find his own leads.

[124]Whilst he was provided with such things as business cards, email accounts, branded clothing, letter headed paper, email sign offs using the words “director” and “partner” and referred to as such online, this is about promoting a branded image to the outside world and is not in itself indicative of the internal employment status and employer/employee status in particular.

[125]Taking all these matters into account overall I have reached the conclusion that the Claimant does not satisfy the test of employment within section 230 and the relevant case law.

[126]However, I am satisfied that the nature of the relationship between the Claimant and the Respondents satisfies the worker status test within section 230.

[127]I accept that there was an implied contract between the parties evidenced by the above findings that the Claimant was working personally for the Respondents. He was contracted to undertake the work or come to some arrangement with other Agents in his absence. There is no indication that he was able to send a substitute to undertake its work and frankly that does seem unlikely given the context of his work. I take the view that the evidence supports a finding that this contract was between the Claimant and both Respondents. There is no indication here that the Claimant was carrying out a business or profession in which the Respondents were his client or customer. There was no evidence to support the Claimant working for anyone else during his time with the Respondents.

[128]Applying the test in Windle, the Claimant was not marketing his services to the world in general but was working in a subordinate position, in as far as he was working for the two Respondents in circumstances where he was integrated within the Respondents’ business.

[129]I therefore find that the Claimant was a worker within the relevant definitions required for the various complaints he has brought, which essentially repeat section 230.

[130]As a result this means that the Tribunal has no jurisdiction to deal with the complaints of unfair dismissal or wrongful dismissal.

[131]The Tribunal does have jurisdiction to deal with the other complaints relating to unpaid wages and holiday pay. In as far as the Claimant has also claimed sickness pay, I heard no evidence that he was actually off sick. Page 19 of 20

[132]In addition, the Claimant was entitlement to receive written particulars of his employment pursuant to sections 1 and 4 of the Employment Rights Act 1996 and as at the date of presentation of his claim to the Tribunal the Respondent had not provided written particulars. Further disposal

[133]In terms of further disposal of the matter, what is left to determine liability for each of the extant complaints and to determine the amounts of any compensation due to the Claimant in respect of each. It was apparent that Barrett accepts that the Claimant is entitled to payment of some monies although there is a dispute over the £25,000 which Mr Barrett believes the Claimant took as an acquisition fee but equally the Claimant denies was ever paid to him.

[134]I would invite the parties to seek to resolve this matter between themselves and will give them until 30 June 2025 in which to do so. The parties should advise the Tribunal by that date whether resolution has been possible or not. If not, the matter will be set down for a further hearing for half a day and I will make appropriate case management orders in advance of that date to secure the necessary preparation for that hearing. Employment Judge Tsamados Date: 24 April 2025 Public access to Employment Tribunal Judgments All judgments and written reasons for the judgments are published online shortly after a copy has been sent to the Claimant(s) and Respondent(s) in a case. They can be found at: www.gov.uk/employment-tribunal-decisions. Page 20 of 20