Mrs A R Corson v M & M Cosmetics Ltd and M & M Products Ltd: 3302740/2024
EMPLOYMENT TRIBUNALS
Case No 3302740/2024
Between
Mrs A R CorsonClaimantM & M Cosmetics Ltd (R1) M & M Products Ltd (R2)Respondent
Before
Employment Judge BeckettDate 15 January 2025
JUDGMENT
[1]The Tribunal finds that the claimant was an employee of the second respondent.
REASONS
[2]The hearing on 2 October 2024 was listed to determine whether the claimant had a contract of employment with the respondent at any time.[3]Prior to the hearing, the Tribunal had been sent 12 separate attachments: The ET/1 The ACAS certificate The ET/3 The grounds of resistance The letter notifying parties about the preliminary hearing An email attaching the respondent’s submissions, the relevant TUPE legislation, the relevant EC Council Directive, and the authority of Key2Law (Surrey) LLP v De’Antiquis (Secretary of State for Business, Innovation and Skills intervening) [2011] EWCA Civ 1567 An email attaching a bundle of 51 pages A further email attaching a bundle of 63 pages A further email attaching a bundle of 51 pages (duplicate of above) An email from the claimant dated 16/08/24 dealing with lists of documents, and a further email dated 19/08/24 with a link to a google drive folder An email attaching a supplementary bundle of 66 pages, an index and the witness statement of Mr Ameen Kalla An email containing a cast list and attaching a chronology[4]The emails with attachments set out above had been sent by the respondent’s solicitors on 30 September 2024.[5]At the outset of the hearing, I requested the documents be placed in a proper bundle. It is not manageable having 12 attachments, some of which then have further attachments.[6]The Tribunal was later provided with a bundle which ran to 16 pages, which contained the witness statements of the claimant and Mr Ameen Kalla, and representations from the respondent.[7]At the outset of the hearing, the claimant raised some issues as she had not been able to read through the whole bundle, and had also complained that the respondent had not added some evidence into the bundle.[8]The claimant initially stated that she was considering asking for a postponement, but then said that she wanted to go ahead today.[9]I allowed her time to consider the papers, and therefore put the case back. After a short postponement, the claimant confirmed that she was ready for the hearing to proceed, and would be able to answer questions asked by counsel for the respondent, and indeed cross-examine Mr Kalla herself.
The Hearing
[10]The Tribunal added M&M Products Limited as a second respondent with the consent of the parties.[11]The claimant gave evidence during the hearing.[12]Mr Ameen Kalla gave evidence for the respondent.[13]Counsel for the respondent made oral submissions which expanded upon his written submissions.[14]As the documentation had been provided relatively late, and the claimant was not legally represented, the Tribunal allowed the claimant to provide written submissions in response. The Tribunal directed that those submissions be provided to the respondent and Tribunal within 14 days.[15]The claimant sent her submissions, along with a Judgment from another Judge at London South (which dealt with remedy and discrimination), on 30 October 2024. I have considered those submissions. I have read the Judgment and appreciate the research undertaken by the claimant. However, the Judgment does not assist me in determining this issue, and I disregard it.[16]I was provided with the claimant’s submissions on 19 December 2024. Facts[17]The Tribunal made the following finding of facts. It was not necessary to make decisions in respect of every contested issue.[18]The claimant set up her own business, Afrocenchix Limited. She was employed as the CEO from 22 July 2010. The company specialized in the sale of premium Afro haircare products.[19]In 2019 the claimant approached Mr Kalla in respect of a potential investment in her business.[20]The claimant started maternity leave on 11 December 2022.[21]The claimant contacted Mr Kalla again in January 2023 in respect of the potential investment. She later emailed him her CV and proposed terms for their potential business (on 31 May 2023).[22]On 21 June 2023 Afrocenchix Limited was liquidated in a creditors’ voluntary liquidation. The Sale and Purchase Agreement set out the terms (pages 141 to 168 of the bundle).[23]The claimant completed the Rule 22.4 Insolvency form, stating that she had been a director of Afrocenchix Limited during the 12 months ending with the day before it went into liquidation, and giving notice that it was her “intention to act in all or any of the ways specified in section 216(3) of the Insolvency Act 1986 in connection with, or for the purposes of, the carrying on of the whole or substantially the whole of the business of the insolvent company under the following name: M&M Products Ltd” (page 52 of 66).[24]On 26 June 2023 the claimant sent an email to Mr Kalla to introduce him to her legal team (page 125).[25]On 27 June 2023 Mr Kalla emailed the claimant an offer of employment. The proposal was a start date of 1 July 2023, a phased return and a salary of £65,000 per annum. The job title was CEO and Head of Marketing.[26]Mr Kalla set out that the claimant would work “10 hours per week during July 2023, 15 hours per week during August 2023 and then full time, 40 hours per week from 1 September 2023” (page 4 of 51).[27]Mr Kalla stated in the email, “before I draw up the contract of employment, please can you confirm that the above is as per our agreement”.[28]On 26 June 2023 the claimant sent an email to Mr Kalla about the antiphoenix legislation and asked Mr Kalla to keep her legal team in the loop in respect of the shareholding transfer and her employment contract stating that she wanted to get it sorted by the end of this month ahead of her staggered return in July (page 5 of 51).[29]The claimant responded by email on 30 June 2023. She advised the respondent that she intended to remain on maternity leave, which she had commenced in December 2022, with a view to returning between September and December 2023. She also wrote “we can agree a schedule of keep in touch days before that once we have sorted out everything else” (page 44 of 66).[30]During the month of June 2023, the claimant had carried out a keeping in touch, or KIT, day. The respondent paid her for that day (sum of £250). Mr Kalla said that the payment was made for work that day in the claimant’s previous role as CEO as she had the knowledge required to undertake the work.[31]The claimant remained on maternity leave during this period.[32]On 3 July 2023 Mr Kalla sent an e-mail to the claimant with the subject title “clarification required employees terms and conditions” (page 57 of 66).[33]Within the body of the email he stated that it was possible that there would need to be some restructuring or consultation which may result in changes to terms and conditions and/ or redundancy. He asked for details in respect of the employees, stating that it was important that he had details of the holiday entitlement so that he could “meet the obligations in respect of TUPE and to determine any formal procedure [he] might need to instigate”.[34]In September 2023, Mr Kalla sent a product to the claimant in the post. The ingredients in the product concerned the claimant as it contained “toxic and cancerous” ingredients and the brand was non-toxic.[35]In evidence, the claimant said that she had to undertake the work sent by the respondent herself, and could not outsource it. She said that Mr Kalla was treating her as an employee sending her work. She also said that she was on maternity leave and upset as she was being expected to work. There were no further KIT days arranged; she undertook work as and when it was sent to her. I found her to be a credible witness, who did her best to answer questions accurately. Her oral evidence was supported by documents in the bundle.[36]In his evidence, Mr Kalla stated that he was not familiar with the company and the only person who he could ask about the products was the claimant.[37]On 21 September 2023 Mr Kalla sent the “new launch” to the claimant. He asked her if there was any feedback or if there were any amendments she wanted to make to the artwork before they went to print.[38]On 22 September 2023 she sent an email to Mr Kalla, asking him to re-send the offer of employment. The claimant stated that the parties had “agreed on mainly marketing and branding responsibilities at 65K full time” with a phased return. She stated that she would prefer to return to full time by December.[39]Mr Kalla responded the following day with a revised offer of employment. That offer was for £50,000 per annum for the role of Head of Marketing. The email started as follows: “Following on from our recent discussion regarding your employment with M&M Products, I would like to confirm your employment details as follows”.[40]Mr Kalla then set out the start date of 1 October 2023, the hours, salary, places of work and a job description (pages 2 and 3 of 51).[41]A contract of employment was also drafted and dated 22 September 2023.[42]The contract was not signed by either party.[43]On 28 September 2023 the claimant sent an email to Mr Kalla stating that the revised offer was not enough, and that she would remain on maternity leave until the end of the year (page 33 of 66). The claimant said in evidence that the offer was too low, the role was too junior in nature and thought that the respondent had set unrealistic expectations.[44]The claimant had received statutory maternity pay during June, July, August and September 2023.[45]On 10 October 2023 an email was sent from info@afrocenchix.com to customers with a message from the CEO. The claimant had not drafted or approved that message. The email contained information about products including a discount code for a certain product.[46]The following day, the claimant sent Mr Kalla an email stating that she was on maternity leave and had already been incredibly stressed by the change in her role and return date. She asked their respondents not to sign off emails from her or post anything from her. She stated that she had been forced to extend her maternity leave against her wishes because she had been offered a 60% reduction in hours.[47]On 16 October the claimant sent an email to Mr Kalla asking for confirmation that her current role was being made redundant, and that the new offer was for two days a week to be increased over time (page 32 of 66). She stated that she would need to think about the new offer.[48]On 17 October 2023 Mr Kalla suggested a meeting with the claimant to discuss the way forward.[49]The parties had a telephone call on 25 October 2023. The parties do not agree as to what took place during that call, which is the subject of the claims. For the purposes of this judgment, the Tribunal does not need to make findings of fact relating to the call.[50]Mr Kalla used Jaluch HR and Training Ltd to deal with HR issues. In his email on 27 October Mr Kalla stated that this was done following the claimant’s request for redundancy he wanted to “ensure the process is followed effectively”.[51]It is clear to the Tribunal that, despite his protest to the contrary, Mr Kalla viewed the claimant as an employee. I reject his evidence that he understood that the claimant was not employed by either respondent and was simply “anxious to ensure that matters were dealt with properly”. This is contrary to the evidence provided, including Mr Kalla’s actions at the time and his retention of the HR firm.[52]Joanna Llewellyn, head of HR for the firm Jaluch HR and Training Ltd, sent an email to the claimant, copying in Mr Kalla, on 27 October 2023.[53]Within that email, she stated that she understood that since the business transfer the claimant had been on maternity leave and that M&M Cosmetics had “picked up all relevant payments … including maternity and holiday pay, despite not having discussed or confirmed your employment status at any stage of discussions” (page 59 of 63).[54]The letter continued to state that the respondent had informed the claimant earlier that year that he would offer her a role in the business, which she had agreed to. It further stated that the claimant had rejected a role and stated that wanted to be made redundant, and that the respondent had now accepted her decision to leave the business.[55]On 30 October 2023 the claimant received a payment from M&M Cosmetics Limited with the reference “CORSONSALARYOCT23” of £3205.56 (pages 13 and 65 of 66).[56]The claimant launched a grievance against the respondent on 28 October 2023. She complained about redundancies being conducted without consultation while she was on maternity leave, repeated pressure to work during her maternity leave, a new role on 23 September 2023 without clarity that her role was redundant, in addition to other matters.[57]It is recorded within the grievance outcome letter dated 8 December 2023, written by HR Consultant Mary Kirman, that Mr Kalla had not considered it necessary to discuss the redundancies as the claimant no longer owned the company and was on maternity leave.[58]The claimant attended a grievance hearing on 22 November 2023. This was in respect of an appeal against redundancy.[59]Within the notes of the grievance hearing, it was stated that the claimant had been made redundant with her last day of employment on 25 October 2023.[60]It further stated that the respondent was “happy to pay 12 weeks lieu of notice subject to deductions for tax and National Insurance and notice pay has been calculated on the understanding of your continuous date of employment of the 22nd of July 2010”.[61]It was then noted that there was no contract of employment or documentation to confirm that date (page 22 of 63).[62]Both parties accepted that their intention had been for the claimant’s employment to continue after the sale of her company.[63]It seems apparent from the above that Mr Kalla did consider the claimant an employee as he was prepared to pay her 12 weeks’ salary in lieu of notice.[64]Mr Kalla accepted in evidence that he sent the relevant information to payroll who sorted out the claimant’s national insurance and tax, and pay slips had been provided.[65]When asked by the claimant why Mr Kalla had done this, he said that he was told that the employees were his responsibility as part of the purchase. He said that he had been told by Maria Strong that he had to ensure payroll was organized and had to pay the salaries for a “few weeks after” he took over in June.[66]Mr Kalla also said in evidence that he was told to pay maternity pay, and also holiday pay upon the claimant’s return from maternity leave. The Law relating to the transfer of undertakings[67]The Transfer of Undertakings (Protection of Employment) Regulations 2006, s4 deals with the effect of a relevant transfer on contracts of employment.[68]S4(1) provides that: “Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resource is or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have the effect after the transfer as if originally made between the person so employed and the transferee”.[69]The effect of the TUPE legislation and the regulations is that if there is a relevant transfer, employees of the current service provider who are assigned to the “organised grouping of employees” will become employees of the new service provider. The transfer of the employment contract is automatic.[70]However, in this case, Afrocenchix Limited had been liquidated. Therefore, the Tribunal has to consider further provisions.[71]TUPE s8(7) provides that: “Regulations 4 and 7 do not apply to any relevant transfer where the transferor is the subject of bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor and are under the supervision of an insolvency practitioner”.[72]The authority of Key2Law (Surrey) LLP v De’Antiquis [2011] EWCA Civ 1567[2012] ICR 881 was provided by the respondent to the claimant and the Tribunal. It provides that the interpretation of s8(7) is absolute.
Conclusions
[73]It appears that the parties did intend for the claimant’s employment to be transferred under the TUPE provisions. This did not in fact happen.[74]The Tribunal must therefore consider the particular facts of the case in order to determine whether or not the claimant was an employee of the respondent.[75]It is agreed between the parties that no contract of employment was signed. The nature of the role to be performed by the claimant, the terms and conditions of employment, and salary were all discussed between the parties in writing and orally.[76]The Tribunal therefore has to consider whether the claimant was an employee other than through the TUPE provisions.[77]In doing so, the Tribunal has considered all the evidence given during the hearing, and contained within the bundle.[78]The case of Ready Mixed Concrete v Minister of Pensions [1968] 2 QB 497 is the starting point when considering this issue.[79]McKenna J held: “A contract of service exists if these three conditions are fulfilled:(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master;(ii) He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master;(iii) The other provisions of the contract are consistent with its being a contract of service”.[80]The requirement of personal service is met in this case. It was the claimant’s own work and her skill that was required by the respondent.[81]The respondent wanted her opinions on artwork for the products and consulted her on a new product. The respondent also used her images in emails sent out to potential customers. The claimant’s knowledge of the products, ingredients and customers were vital for the respondent to run the business profitably and in accordance with the values set by the claimant.[82]Payments were made on occasion. Further, the term “other remuneration” includes the promise or expectation of future work. In this case, it was the intention of both parties that the claimant work for the second respondent.[83]Further, the respondent had control over the claimant’s obligations. Mr Kalla sent out work for the claimant to undertake.[84]The additional factors that support the contention that the claimant was an employee are: the claimant received maternity pay the claimant received holiday pay the claimant used a grievance procedure the respondent dealt with the claimant’s national insurance and tax through payroll the respondent employed an HR firm to deal with the claimant’s request to be made redundant.[85]The only proper inference to be drawn by the factors set out above, when considering all of the evidence together, is that the claimant was an employee.[86]The Tribunal is therefore satisfied, on the balance of probabilities, that the claimant was an employee of the second respondent. ..............................................