Mr H Sahejpal v Elite Medical Staffing Ltd: 6014342/2024

EMPLOYMENT TRIBUNALS

Case No 6014342/2024

Between

Mr H SahejpalClaimant

Elite Medical Staffing LtdRespondent

Before

Employment Judge McGough

Ms Shui (instructed by Counsel) for claimant

Ms Garner (instructed by Counsel) for respondent

Date 6 August 2025

JUDGMENT

[1]The Respondent admitted liability before the hearing. The Claimant was unfairly dismissed.

[2]There is a 50% chance that the Claimant would have been fairly dismissed in any event after a six month period.

[3]The Respondent unreasonably failed to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures and it is just and equitable to increase the compensatory award payable to the Claimant by 25% in accordance with s207A Trade Union & Labour Relations (Consolidation) Act 1992.

[4]The Claimant did not cause or contribute to the dismissal by blameworthy conduct. It is not just or equitable to reduce the compensatory award or the basic award because of the Claimant’s conduct.

[5]The Respondent is ordered to pay the Claimant the following amounts:(a) A basic award of £11,550; and

(b) A compensatory award of £100,113.07. Note that these are the actual sums payable to the Claimant after any deductions or uplifts have been applied and after the compensatory award has been grossed up for tax.

REASONS

[1]The Claimant was employed by the Respondent as its Chief Executive Officer (CEO). He is pursuing a claim for unfair dismissal.

[2]Initially, the Respondent denied liability for unfair dismissal. By an application to amend its grounds of resistance on 25 June 2025, the Respondent admitted liability for unfair dismissal. The hearing was therefore converted to a remedy hearing.

[3]Early conciliation started on 4 October 2024 and ended on 8 October 2024. The claim form was presented on 8 October 2024.

THE HEARING

[4]The Claimant was represented by Ms Shui of Counsel and the Respondent was represented by Ms Garner of Counsel. The Respondent had prepared a 593-page bundle of documents for the hearing, which was agreed between the parties (Bundle). The page numbers referred to in this Judgment are pages in the Bundle.

[5]The Tribunal heard evidence from the Claimant and one witness from the Respondent: Mr Tom Purkis, a partner at Maven Capital Partners UK LLP (Maven), the private equity investor in the ultimate parent company of the Respondent.

[6]The Tribunal heard submissions from both Ms Shui and Ms Garner.

[7]In her closing submissions Ms Shui submitted that the Respondent's conduct of the case (admitting liability only two weeks before the hearing; sending its witness statement three working days before the hearing; and expanding the basis on which there had been a breakdown in trust and confidence via that witness statement, late disclosure of documents and the late provision of a counter schedule of loss) meant that it would not be inappropriate to bar the Respondent from relying on any allegation of SOSR or Polkey other than on the basis of its pleaded position in its amended grounds of resistance.

[8]The Tribunal notes that the Respondent's conduct in the preparation of this case has been disappointing. However, the Tribunal also notes that the Claimant submitted a second supplementary witness statement the day before the hearing; did not make any application for further and better particulars at any stage in the proceedings or any application for postponement in light of the Respondent's conduct; and that Ms Shui had ample opportunity during the hearing to crossexamine the Respondent's witness on the relevant issues. Taking into account all of these points and the overriding objective, the Tribunal does not accept Ms Shui's submission and has made its decision based on all of the evidence before it in the hearing.

THE ISSUES

[9]The issues to be determined were identified as follows:9.1 If there is a compensatory award, how much should it be? The Tribunal will decide:

(a) What financial losses has the dismissal caused the Claimant?

(b) Has the Claimant taken reasonable steps to replace his lost earnings since 12 March 2025, for example by looking for another job?

(d) Is there a chance that the Claimant would have been fairly dismissed anyway if a fair procedure had been followed, or for some other reason?

(e) If so, should the Claimant’s compensation be reduced? By how much?

(f) Did the ACAS Code of Practice on Disciplinary and Grievance Procedures (ACAS Code) apply? The Respondent’s position is that the ACAS Code does not apply.

(g) Did the Respondent or the Claimant unreasonably fail to comply with it?

(h) If so is it just and equitable to increase or decrease any award payable to the Claimant? By what proportion, up to 25%?

(i) Did the Claimant cause or contribute to the dismissal by blameworthy conduct?

(j) If so, would it be just and equitable to reduce the Claimant’s compensatory award? By what proportion?

(k) Does the statutory cap of fifty-two weeks’ pay or £115,115 apply?

9.2 What basic award is payable to the Claimant?

9.3 Would it be just and equitable to reduce the basic award because of any conduct of the Claimant before the dismissal? If so, to what extent?

[10]The Claimant does not seek reinstatement or reengagement so the only matter for the Tribunal to consider related to the appropriate level of compensation and the basic award.

FINDINGS OF FACT

[11]The Respondent is the parent company of Acton Banks Limited (Acton Banks), a specialist healthcare recruitment company, which provided healthcare assistants, registered nurses and theatre staff to private and public sector care homes and hospitals. The Claimant was employed by the Respondent as the CEO of Acton Banks. His period of continuous employment began on 4 January 2010 when he commenced employment with Action Banks.

[12]The Respondent served the Claimant with notice to terminate his employment on 12 September 2024 and he was placed on garden for his six month notice period until his employment terminated on 12 March 2025. The Respondent has admitted that the Claimant was unfairly dismissed by the Respondent. On the termination date the Claimant had 15 years’ service and was aged 44. Management buyout

[13]In October 2018 there was a management buyout of Acton Banks, whereby private equity firm Maven invested in Acton Banks alongside reinvestment from the shareholders at the time, including the Claimant. The transaction was known as “Project Lamp” and it was structured as a typical private equity investment of this kind, whereby:13.1 The Respondent acquired the shares of Acton Banks from the Claimant and other shareholders under the terms of a sale and purchase agreement, to become the immediate parent company of Acton Banks;

13.2 Two other companies were incorporated as part of the group structure whereby the Respondent is the wholly owned subsidiary of Project Lamp (Midco) Limited (Midco), and Midco is the wholly owned subsidiary of Project Lamp (Topco) Limited (Topco); and

13.3 Topco, Midco, the Respondent, Acton Banks, the Claimant and Maven entered into an investment agreement (Investment Agreement) which, together with the articles of association of Topco (Articles), set out the terms of the investment.

[14]As part of the transaction, Mr Tom Purkis, a Partner at Maven, was appointed as a statutory director of Topco. Under the Articles, Maven had the right to appoint up to two people to be non-executive directors of Topco, to appoint a non-executive Chair of Topco, and to appoint a person as an observer at Topco board meetings. The transaction also included a financial business plan agreed by Maven and the management team (including the Claimant) which set out a financial forecast for the first five years after completion of the transaction.

[15]As part of the consideration for his shares in Acton Banks, the Claimant held shares in Topco (subject to the Articles) and loan notes in Midco (subject to the terms of the Investment Agreement).

[16]The termination of the Claimant’s employment would impact his shareholding and could impact his loan notes:16.1 Under the Articles the termination of his employment would trigger a compulsory transfer of 50% of his shares in Topco, offered for sale at a price determined under the articles depending on the circumstances of the termination;

16.2 Under the Investment Agreement the treatment of the Claimant’s loan notes would also depend on the circumstances of his termination as this would determine which “leaver” category he fell within, as set out in the Articles. If he was a “Bad Leaver” or a “Very Bad Leaver” the Claimant’s loan notes would be subordinated to Maven’s loan notes. Otherwise, his loan notes would rank equally (or “pari passu”) with all loan notes (including Maven’s loan notes).

16.3 The definitions of the different leaver categories (Good Leaver, Intermediate Leaver, Bad Leaver and Very Bad Leaver) are set out in Article 1 of the Articles. The relevant leaver categories in light of the Claimant’s arguments about the reasons for his dismissal were “Intermediate Leaver” and “Bad Leaver”. The relevant parts of the definitions are: “Intermediate Leaver – […] ceases to be an employee or director of […] a Group Company […] in circumstances […] determined by a decision of an Employment Tribunal or Court […] to be an unfair dismissal (other than where the determination of unfair dismissal arises for reasons of a purely procedural nature but for which the Founder [i.e. the Claimant] would have been fairly dismissed) save that the Founders acknowledge and recognise that, where anyone who has their employment terminated on the basis of: [ … ] (b) as a result of a Material Underperformance; such termination shall be deemed to constitute a fair dismissal” “Bad Leaver – neither a Good Leaver, an Intermediate Leaver nor a Very Bad Leaver.”

[17]“Material Underperformance” is defined in the Articles as circumstances where Topco’s annual actual EBIT (earnings before interest and tax) is less than 60% of the annual projected EBIT.

[18]The upshot of the leaver definitions was that, notwithstanding a determination of unfair dismissal by an Employment Tribunal, if the Claimant’s employment was terminated “on the basis of” (or “as a result of”; the definition in the Articles includes both sets of wording) “Material Underperformance”, the deeming provision in the Intermediate Leaver definition would mean that the Claimant was a Bad Leaver, not an Intermediate Leaver. Financial performance of Acton Banks

[19]Whilst Acton Banks made a profit in the three years following the management buyout, Maven considered there to be “significant financial underperformance” during the first three years following the management buyout in October 2018 (page 311). The financial year ending 31 July 2022 was a much more successful year; the Covid-19 pandemic had resulted in significant demand for healthcare staff, resulting in profit of £4.4 million EBITDA. Profits reduced the following year and the company made a loss in the financial year ending 31 July 2024. By the third quarter of financial year 2023/24, losses were £20,000 per week.

[20]In early 2022, the UK government introduced a change to immigration policy that materially impacted healthcare staﬃng agencies in the UK. The change expanded eligibility for legal migration to the UK to include roles such as care assistants, care workers, carers, home care assistants, home carers, and support workers in nursing homes and the NHS. Following the change, demand for both nurses and carers started to drop across the temporary healthcare recruitment industry. The Claimant explained, which is accepted by the Tribunal, that nothing like this had ever happened before and that he did not consider the policy change and the consequent material impact on inward migration was foreseeable.

[21]Until the immigration policy change, Acton Banks’ business model had focused on supplying:(1) care homes struggling to find their own staff (often in rural areas); and

(2) care homes struggling to find high quality staff. The company focussed on supplying high quality staff to care homes and being swift and reliable in that supply. It was accepted by both parties that the immigration policy change had a significant impact on that business model and that it would therefore need to change.

[22]The relationship between the Claimant and the Respondent was showing signs of strain in Autumn 2023. Claimant emailed Mr Purkis and Mr Andrew Ferguson (another partner at Maven) with a number of concerns on 5 October 2023 (pages 307 – 310) stating that he thought there was a “pattern of constructive dismissal”. In oral evidence the Claimant explained that what he meant by this was that he had a suspicion Maven wanted him to resign. His email referred to a number of decisions made by the Respondent which, in the Claimant’s view, negatively impacted the business including: the decision to recruit a new Chief Finance Officer (CFO) rather than follow the Claimant’s alternative (lower cost) suggestion; not repositioning cash reserves into interest bearing accounts; offering the new CFO the same salary as the Claimant (on the basis it is unusual to pay a CFO the same as a CEO and therefore the only reason could be that Maven wanted to marginalise the Claimant and push him to resign); not agreeing with his proposal to promote an internal candidate to the role of Financial Controller at a particular salary level (which resulted in her leaving); and not agreeing salary increases for the Sales Director and Operations Director (in light of the higher salary level offered to the new CFO).

[23]Whilst the Tribunal accepts that the Claimant clearly felt unhappy as a result of the issues outlined in the email, it does not accept that the Respondent made the decisions outlined in the Claimant’s email because it wanted the Claimant to resign. Mr Ferguson responded later the same day explaining in very clear terms that Maven had (and continued to be) supportive of the Claimant and his team, notwithstanding previous financial underperformance (pages 311 & 312). Among other things, Mr Ferguson stated that Maven had not rejected outright the Claimant’s proposed pay rises for himself and his senior team but that any remuneration increases had to be subject to agreeing a credible turnaround plan; that the new CFO would not have any equity in the business, unlike the Claimant and his senior team and contrary to the normal position of a Finance Director or CFO in a private equity backed business, therefore an appropriate level of remuneration was required to attract someone with the required experience and the package offered was in line with market rates evidenced by the recruitment search. He went on to re-iterate Maven’s support by pointing out that if Maven had wanted the CEO leave it would not have recently asked Acton Banks’ Chairman to step down. The email is compelling evidence of Maven’s support for the Claimant in his role at that time.

[24]Two days later, Mr Ferguson emailed the Claimant in a very different tone (page 313). The Respondent’s solicitors had confirmed to Maven that the loan note extension that was required under the Investment Agreement had not been completed by a deadline the day before, Friday 6 October 2023. Mr Ferguson considered this to be a very serious issue as it put the business in breach of the loan notes and was a material breach of the Investment Agreement. Mr Ferguson explained that he found it incomprehensible that the matter had not been dealt with in a timely manner and would need to find out from the Respondent’s accountants and listing agents what the ramifications would be.

[25]The Claimant responded the same day to say that he disagreed with Mr Ferguson’s email. He explained he needed to make sure that the loan note extension he was being asked to sign did not negatively impact him, referencing a previous document he had been asked to sign which would have increased his liability under an indemnity. He went on to explain that the final documents had only been provided earlier that week and that the Respondent’s advisers had explained to him that, in practice, the documents could be lodged early the following week. He asked for urgent documents to be provided earlier in future and for people to be more organised.

[26]The Tribunal makes no finding as to which party is ‘at fault’ here (if there is any fault, the Respondent did not provide any evidence as to whether there had in fact been any negative impact in respect of the loan notes). However, it is clear that, from this point onwards, relations deteriorated materially between the Claimant on the one hand and the Respondent and Maven on the other. Appointment of new Chair

[27]In February 2024 the Respondent and Maven were looking to appoint a new Chair of Acton Banks, the previous Chair having been asked to step down at some point in 2023. The Claimant was opposed to appointing a Chair at that stage and emailed Mr Purkis on 5 February 2024, setting out his concerns in detail (page 319). In short, he had two main objections:(1) the cost of the recruitment fee (£25,000) and the Chair’s remuneration (£35,000 - £75,000) would accelerate cash losses; and

(2) appointing a Chair before the group reached a solid growth trajectory could limit the pool of potential candidates. He therefore asked Maven to pause the search until Acton Banks was making a profit.

[28]Mr Purkis did not agree with this approach. He responded to the Claimant on 7 February 2024 explaining that in Maven’s experience cost cutting alone would not address the problem (pages 317 & 318). He explained that Maven had seen other businesses weather the change to market conditions brought about by the immigration changes with different strategies and approaches and that a Chair with the right experience was more important at that stage because the Claimant needed to focus on the day to day operations of the business. He suggested that the role specification be discussed with the whole executive team. He went on to explain that the Investment Agreement required a Chair as a condition of Maven’s investment and that it was normal practice in any private equity backed business, because a good Chair was invaluable. His email also expressed continued support for the Claimant and the efforts they had been making over the previous 18 months to reduce short-term losses.

[29]The Claimant responded on 12 February 2024 recognising that he and Mr Purkis had diverging views on the timing of appointing a new Chair (pages 320 & 321). He reiterated his reservations on the basis that he had responsibilities as a statutory director to do so, but recognised Maven’s rights under the Investment Agreement to appoint a Chair. After setting out some expectations for the appointment process and explaining he could not lead the process, he confirmed that he would facilitate a smooth process and would not seek to frustrate Maven’s decision.

[30]Mr Purkis replied to say he was pleased to move forward and that Maven was happy to manage the appointment process if that helped with management of day to day operations. He emphasised again Maven’s support for the team (page 322). May 2024 onwards

[31]Mr Mark Bates was appointed as the new Chair. He met with the Claimant and his team a number of times from 16 May 2024 onwards and was formally appointed from 1 June 2024. Mr Bates was a ‘turnaround specialist’ rather than someone with experience the health recruitment sector. Mr Purkis explained in his evidence, which is accepted by the Tribunal, that given the poor financial performance by the third quarter of the 2023/24 financial year (see paragraph 19 above) Maven was very concerned that without immediate action to turn around performance, the business could fail. Mr Bates was to lead an urgent strategic review of the business and make recommendations to Mr Purkis and Mr Sanjay Patel, who were Maven’s representatives on the Topco board.

[32]It is clear from both parties’ evidence that Mr Bates and the Claimant had different views about the strategy and approach required to improve the financial performance of Acton Banks.

[33]The Claimant made it very clear in his evidence that he did not agree with Mr Bates’ approach, that he considered Mr Bates did not understand the sector (even after the Claimant had explained it to him), and that he was suspicious of Mr Bates’ motives.

[34]The CFO, Mr Narinder Uppal, brought to the Claimant’s attention in May 2024 that a significant number of the companies of which Mr Bates had been a statutory director had been dissolved or liquidated. The Claimant provided details of these appointments from the Companies House website (pages 469 – 480). Mr Purkis explained in his evidence that this is not surprising for someone who specialises in advising distressed businesses, as not all of them can be saved. He explained that at the time of his recruitment, Maven and the Claimant believed Mr Bates had the expertise they were looking for to identify the best route forward for the business. The Tribunal accepts Mr Purkis’ evidence on this point.

[35]After a number of discussions and emails between the Claimant and Mr Bates in the second half of May 2024 (including the Claimant sending details of the company’s strategic goals (pages 325 - 330)), Mr Bates emailed the Claimant on 1 June 2024 setting out his view (pages 324 – 327). Mr Bates made it clear in his email that the company was facing a critical situation, describing it as a “burning platform”. In his view, the only objective was to turn the business around in the shortest possible time otherwise the Respondent would risk losing confidence from the investors. He considered the only way out of the situation was to grow sales quickly and he set out five ways to do that (page 324). He suggested each of the five areas should have clear metrics and be reported on at each board meeting and also as part of the weekly management meeting. He confirmed that as CEO it was for the Claimant to decide the priorities but that the big priority was getting back to profitability and that could only be done by sales growth. In his view everything else was likely to be unimportant at that stage.

[36]From this point onwards, the Claimant considered that Mr Bates did not understand the Acton Banks business or its sector. He viewed Mr Bates’ observations and advice as “business generic” and that Mr Bates did not really grasp the company’s sector or the operational and market challenges that Acton Banks faced. He disagreed with the proposed plan for contacting potential clients frequently (calling care homes rather than setting up planned meetings based on market data). He also disagreed with Mr Bates’ sole focus being on sales. He considered that there was also a need to focus on putting systems in place to find candidates, otherwise there would be no point in increasing sales in new geographical areas – the business would not have sufficient candidates to supply to clients. In the Claimant’s view Mr Bates’ strategy was too short term; the required strategy was medium term.

[37]Immediately after the email to the Claimant on 1 June 2024, Mr Bates emailed Mr Purkis and Mr Patel forwarding the email he had sent to the Claimant and setting out additional points for Maven to consider (page 323). His view was that the five priorities set out in the email to the Claimant were ‘Plan A’, which Maven should give ‘a maximum of six months to work’. He also set out three alternative approaches (Plans ‘B’, ‘C’ and ‘D’) that he recommended run alongside Plan A. Plan B was to identify a replacement for the Claimant and other members of the executive team; Plan C was to identify similar distressed businesses Acton Banks could merge with cheaply to obtain scale and choices over management (including the Claimant’s role); and Plan D was to consider how to extract maximum shareholder value from a sale or closure of the business if none of the other plans worked. He considered there to be only a short timeframe to find a solution.

[38]It is the Claimant’s case that this email demonstrates that Mr Bates ‘wrote off’ the Claimant quite quickly, particularly given the references to replacing the Claimant as ‘Plan B’ and part of ‘Plan C’. Mr Purkis explained in oral evidence, which the Tribunal accepts, that Mr Bates was scenario planning, which is not unusual for a Chair who is a turnaround specialist, and that the main plan was to support the Claimant and his team and give the business some time to turn around.

[39]Three weeks later, Mr Bates and the Claimant got into discussion about whether Mr Uppal (the CFO) should stay in the business. Mr Uppal had resigned and Mr Bates was suggesting that he and the Claimant try retain him if possible (page 339). The Claimant did not agree, explaining he was “not really a fan of continuing with him” but he would not stand in the way provided the Claimant’s salary was increased from £125,000 to £160,000 (in line with what he was paid at the start of Maven’s investment, adjusted for inflation) – page 338. Mr Bates was very straightforward in his reply (page 337). He considered the best option at that stage was to retain Mr Uppal and that there wasn’t a chance of increasing the Claimant’s salary to that level given the financial performance of the business. He did agree however, that it was inappropriate for the CEO and the CFO to be on the same salary so he would ask Maven to give the Claimant a small salary increase.

[40]At the same time as the communications above, Mr Bates asked Maven for a copy of the Investment Agreement and Articles (page 341). The following day he emailed Mr Purkis observing that Maven’s loan notes ranked equally to the Claimant’s loan notes, noting that that was all he really wanted to know (page 340). He was planning to speak to the Claimant about his salary the following morning and then then to Mr Uppal about staying on. He considered the issues between the CEO and the CFO needed resolving.

[41]Ms Shiu submitted that this email from Mr Bates (and the reply from Mr Purkis, page 340) shows the true motivation of the Respondent; Mr Bates wanted to know about the Claimant’s leaver status and the ranking of his loan notes. The Tribunal does not agree with this submission. Mr Purkis explained in oral evidence, which the Tribunal accepts, that he would expect a transformation / turnaround Chair to look at all aspects of the different scenarios he had laid out in his email of 1 June 2024 (paragraph 37 above) and the impact on all stakeholders should the worst case scenario arise.

[42]Following Mr Bates’ meetings with the Claimant and Mr Uppal the next day, Mr Uppal withdrew his resignation and the Claimant agreed a £10,000 salary increase. Mr Bates reported to Maven that the Claimant was very happy with the increase (page 342).

[43]By 12 July 2024 Mr Bates had been in post for six weeks and emailed the Claimant (page 348) to say he was feeling uneasy that some things were taking longer than expected (more visits to clients generally; the Claimant and the Sales Director getting more involved in sales; and moving more quickly to find candidates for oncall cover, using an outsourced provider in India). He re-iterated that there was a ‘burning platform’ with £20,000 per week losses and stressed that the situation was extremely urgent.

[44]Mr Bates forwarded that email to Mr Patel and Mr Purkis to say more pace and urgency was required and that he assumed Maven were also looking at Plans ‘B’ (replacing the Claimant) and Plan ‘C’ (merging with another distressed business for scale) – page 347. For Plan B, Mr Bates suggested looking at what talent was in the market for “a senior exec change” if business did not step up. Mr Patel responded to say, among other things, that Plans ‘B’ and ‘C’ were on their radar and that conversations around those plans should continue as Mr Bates spends longer in the business.

[45]On 20 July 2024 Mr Bates emailed the Claimant again to explain the urgency of the situation, given that Maven and its institutional investors would have lots of questions following the upcoming Maven report on its portfolio (page 351). He described a need for “extreme intensity” on driving the activities that he and the Claimant had discussed and recommended that the Claimant get more involved in sales because he had a lot of credibility in the market. Whilst the tone of that email to the Claimant was positive, in Mr Bates’ follow up email to Maven (page 351) he was clearly frustrated and considering implementing alternative options if things did not change in the next few weeks.

[46]Over the next two days, Mr Bates and Maven considered that the pace of implementing the strategy was too slow and that the onus was on the Claimant and his team to deliver on the key initiatives. Mr Bates recommended that the Claimant and the team be given until the end of September to turn things around (taking into account the Claimant’s holiday and a business trip to India to see the outsourced provider) and that, in the meantime, they continued preparatory steps for Plans ‘B’ and ‘C’. Mr Purkis agreed with this approach (pages 350 & 351).

[47]On 7 August 2024 the Claimant wrote a short email to Mr Bates, Mr Patel and Mr Purkis outlining concerns about Mr Uppal (page 361). He said that Mr Uppal had been rude and aggressive when the Claimant had spoken to him about issues with his performance. He explained he was planning to speak to the Respondent’s employment lawyer to discuss next steps with Mr Uppal. Mr Bates asked the Claimant for more details and for him not to contact the employment lawyer for the time being (page 361). That afternoon, the Claimant sent a long and very detailed email to Mr Bates raising a number of issues with Mr Uppal: aggressive and confrontational behaviour when discussing a disagreement in the office between other colleagues; criticising the Claimant to other staff and claiming he would be the next CEO; criticising other executives therefore causing disruption in the office; and examples of incompetency in his role as CFO (pages 358 – 360). The Claimant’s conclusion was that Mr Uppal was having a very negative effect on staff and the company and that he should be offered a severance package or alternatively suspended pending a disciplinary process. He explained that the Sales Director and Operations Director were supportive of his view and were prepared to provide statements to that effect.

[48]Mr Bates responded to the Claimant saying he would look into it, as there were a lot of issues in the email, but also that the full energies of the management team needed to be focused on increasing margins as soon as possible. He told the Claimant he considered the matter with Mr Uppal to be a distraction (pages 356 – 357).

[49]Mr Bates sought more information from Mr Uppal. Mr Uppal emailed Mr Bates setting out a number of issues and conversations with the Claimant. He concluded that the Claimant’s actions amounted to intimidation and bulling (pages 365 & 366). It is very clear from the email correspondence and the Claimant’s witness statement and oral evidence that the relationship between the Claimant and Mr Uppal had broken down.

[50]It is also clear from the email correspondence between Mr Bates and Mr Purkis over the course of the day and the following day that Mr Bates and Maven were starting to lose patience:50.1 Mr Bates explained he couldn’t spend too much time on the issue between the Claimant and Mr Uppal the next day because he was focussing on what was happening with sales. He considered the whole team, including the Claimant and Mr Uppal, should be focussing on that “to the exclusion of everything else” (page 364);

50.2 Mr Purkis decided to ask the Respondent’s solicitors to look at “the position with Harry” if Maven needed to “progress things in short notice” (page 363);

50.3 Mr Bates mentioned the margin figures for the previous week and that it didn’t feel to him that the Claimant was turning things around (page 362); and

50.4 Mr Ferguson wondered if the Claimant’s complaints about Mr Uppal were to distract from the company’s poor performance and agreed with Mr Bates’ view that it was a distraction from delivering the activities that were agreed to be done by the board (page 367).

[51]By 13 August 2024 the financial position had still not improved and Mr Bates emailed the Claimant to suggest that he start to look at cutting costs (page 369). Two days later on a call together, Mr Bates, Mr Purkis and Mr Patel discussed the Claimant leaving the business (page 370).

[52]The Claimant argues that the Respondent appears to have decided by mid-August that it was going to dismiss him. Whilst it is right to say that the Respondent was seriously considering dismissing the Claimant from 13 August 2024 onwards (and was considering options for his replacement on 15 August 2024 (see page 371) and taking advice on the Claimant’s leaver status under the Articles on 28 August (see page 406)), the email from Mr Bates to Mr Purkis on 29 August 2024 shows that a final decision had yet to be made (page 407). On 7 September 2024, Mr Bates and Mr Purkis had started to draw up an action list to deal with the Claimant’s departure (page 421) and on 9 September 2024 they (together with Mr Patel and Mr Ferguson) were drafting messages for the senior executives and other staff about the Claimant’s departure. The Tribunal therefore finds that the Respondent’s decision to dismiss the Claimant was made between 29 August and 7 September 2024. External advice from Mr Marsh

[53]Given the financial position of Acton Banks, a decision was taken by Mr Bates and Maven on or around 15 August 2024 to bring in a sector specialist to advise on what could be done to turn around the business. They engaged Mr Nigel Marsh as an external consultant. He was to advise on the sector and strategy (pages 370 & 371). Mr Marsh was already known to the Claimant and he had confidence in Mr Marsh.

[54]After agreeing terms and a scope of work with Mr Marsh on Friday 16 August (page 372), Mr Bates emailed the Claimant later that day to inform him about Mr Marsh’s engagement and the reasons for that, explaining the matter was urgent (page 374). He explained that Mr Marsh would be coming in to Acton Banks on Monday to Wednesday the next week and one day the following week. The wording of that email had been reviewed and amended in advance by Mr Purkis (page 372). The Claimant responded to say that the next week did not work because the Operations Director was on holiday and he was not in on the Tuesday. He also asked why the matter had not been discussed with him.

[55]In his witness statement Mr Purkis describes this as the Claimant not being cooperative. The Tribunal does not accept Mr Purkis’ evidence on this point. The Claimant was pointing out that several key people would not be present for all of the days that Mr Marsh would be visiting the Acton Banks office. It is also not surprising that he asked why he was not involved in the decision to engage Mr Marsh; the Claimant was the CEO. Furthermore, the Claimant emailed Mr Marsh over the weekend to provide him with detailed background information about Acton Banks, its executive team, and the company systems before his visit (pages 520 – 522), which is far from unco-operative behaviour.

[56]Mr Marsh emailed Mr Bates with an initial view of things on 19 and 20 August 2024 (pages 382 and 386). His observations (which were not shared with the Claimant) included:56.1 The office was more subdued than he would expect for a recruitment business and people left far earlier than he would have expected;

56.2 The sales team were not personalising the emails they were sending and did not seem to have a clear message;

56.3 The Claimant struggled to explain his strategy in a few sentences;

56.4 Mr Uppal seemed switched on and displayed more energy than the Claimant but was not aware of the strategy/approach;

56.5 The relationship between Mr Uppal and the Claimant was clearly broken;

56.6 The Sales Director understood the market and was leading the strategy; and

56.7 The strategy was not the wrong approach but the Claimant had not been articulating it in his meetings with Mr Marsh.

[57]Mr Marsh had also explained to Mr Bates the previous week (during their initial conversations about the engagement) that he expected an uplift in the market the following year (2025).

[58]The Claimant and the Respondent agree that Mr Marsh’s broad conclusion was that the Claimant’s strategy was the right one. Mr Purkis explained in his evidence that the Respondent’s concerns were that the Claimant could not articulate the strategy, could not lead or motivate the team, and did not have the energy to perform in his role as CEO. The Tribunal accepts that Mr Purkis (and the Respondent) genuinely had these concerns, particularly in light of Mr Marsh’s observations outlined above. However, the Tribunal also notes that the Respondent did not articulate those concerns to the Claimant and did not share with him Mr Marsh’s observations on those points. The Claimant’s dismissal

[59]Mr Bates and Mr Purkis met with the Claimant on 12 September 2024 when he arrived for a meeting in Birmingham to discuss the 2024/25 budget. The Claimant was not given any prior notice of the meeting with Mr Bates and Mr Purkis. The Claimant explained in his evidence, which is not challenged by the Respondent, that Mr Bates appeared to read from the script at pages 448 & 449. The Claimant was told that the Maven investor directors and Mr Bates as Chairman of the Respondent had lost confidence in the Claimant as CEO of Acton Banks and that the decision had been taken to terminate his employment. The Claimant was placed on garden leave for his six month notice period and he was given a letter of termination (pages 450 & 451).

[60]The termination letter set out the reasons for the Claimant’s dismissal as follows: “You will be aware that the financial results for the financial year ending 31 July 2024 fall far short of projected EBIT, to the extent of there being Material Underperformance, as defined in the articles of association of [Topco]. Matters have now come to the point where the level of underperformance of the Group is such that you have lost the confidence of other members of the [Topco] Board, to a degree that the [Respondent] considers is sufficient to justify the termination of your employment as Chief Executive Officer. I am therefore issuing you with six months’ notice of the termination of your employment by the [Respondent] in accordance clause 2.2 of the service agreement between you and the [Respondent] […]. Please accept this letter, which is being served personally on you today (in accordance with clause 27.1 of the service agreement) as the [Respondent’s] formal decision to that effect.”

[61]The termination letter also stated that the Claimant would be given no right of appeal against the Respondent’s decision. After the Claimant’s dismissal – mitigation of loss

[62]After his dismissal the Claimant decided to re-train and build his own business in AI development. The Claimant describes himself an entrepreneur, based on his career history, and decided this was the best way forward. He had experience in setting up technical systems at Acton Banks and during his garden leave period he had carried out market research before deciding to set up a business that would use AI to help businesses across various sectors become more efficient. He incorporated the new business on 9 April 2025.

[63]The Claimant did not apply for any jobs after he was served notice of termination.

[64]The Claimant felt precluded from applying for jobs within the healthcare recruitment sector due to the post-termination restrictive covenants contained in his service agreement and the Investment Agreement (expiring on 11 September 2025 and 11 September 2026 respectively, taking into account his garden leave) – pages 51, 52 and 72 - 74. Among other things, the covenants restricted the Claimant from working for a competing business. The Claimant could be released from part or all of the restrictions in the service agreement by obtaining prior written consent from the Respondent (pages 51 & 52). In his evidence Mr Purkis stated that, similarly, the Claimant was only restricted from working for a competing business under the Investment Agreement if he did not have the prior written consent of the Fund Manager (which is Maven). This is not the case. The post-termination restrictive covenants in the Investment Agreement are at clauses 9.1 – 9.6 of the Investment Agreement and they make no reference to the restrictions being subject to the consent of the Fund Manager (written or otherwise). That is not to say that it was impossible to release the Claimant from the non-compete restriction in the Investment Agreement, but there is no provision for that within the restrictions themselves therefore it is very likely that it would have required a variation of the Investment Agreement.

[65]In his evidence, Mr Purkis stated that if the Claimant had contacted Maven to request its consent to work in a competing business it is likely that Maven would have given its consent for the Claimant to do so, provided he did not breach the other restrictions, such as non-solicitation of customers and/or key employees. The Claimant was not of the same view. He explained, which the Tribunal accepts, that he considered himself bound by the restrictions and that he would not be released from the non-compete on the basis that:(1) this was the standard approach in the recruitment sector; and

(2) he had experience of working with Maven in a similar situation when the previous CEO left the business, when the Claimant worked with Mr Purkis to increase the previous CEO’s post-termination restrictive covenants.

[66]The Claimant also didn’t look or apply for employment outside the healthcare recruitment sector (e.g. elsewhere in the recruitment sector or in other sectors using his sales and/or technical skills). Examples of such executive roles provided by the Respondent (permanent and interim roles) are at pages 582 – 591.

[67]The Claimant explained in oral evidence, which is accepted by the Tribunal, that he explored employed roles outside the healthcare recruitment sector during his period of garden leave (although less so during December and January as he was helping his wife and with childcare after his wife he gave birth in November and was struggling to walk). He decided during this time that he didn’t want to go into a business that was not a growth area and after doing some research he decided that recruitment was no longer a growth area.

[68]The Claimant also considered he was constrained from applying for an employed role because he needed to work somewhat flexibly in order to see his son in London (the timing of which was subject to a court order). When he was employed by the Respondent he worked early on Fridays and late on Wednesdays to accommodate this arrangement. He needed to continue with that arrangement and considered that it was unlikely that that degree of flexibility would be available to him with other employers.

[69]The Claimant was not able to give any clear indication of when his new business would start to generate revenue. The business had yet to complete the development of its first product by the time of the hearing. In oral evidence the Claimant explained that it was almost ready, and that he had three customers who had expressed interest, but he was not certain when the business would begin to generate revenue or how much this would be. His best guess, which he described as optimistic, was that this would be October – December 2025. Agreed elements of the schedule of loss

[70]At the hearing the parties confirmed that the following details in the Claimant’s schedule of loss were agreed:70.1 The Claimant’s net weekly basic pay was £1,320.06;

70.2 His gross weekly pay was £2,134.62;

70.3 The Claimant is entitled to a basic award of £11,550 (subject to any adjustment as per paragraph 9.3 above); and

70.4 The Claimant’s total loss up to the date of the hearing was £35,994.84, before consideration of the issues set out at paragraph 9.1 above. THE RELEVANT LAW Legislation and ACAS Code

THE RELEVANT LAW

[71]An employee has the right not to be unfairly dismissed by their employer. Sections 94 and 98 Employment Rights Act 1996 (ERA), provide: 94 The right An employee has the right not to be unfairly dismissed by his/her employer. 98 General (1) In determining …. whether the dismissal of an employee is fair or unfair it is for the employer to show- (a) the reason (or if more than one, the principal reason) for the dismissal; and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

[72]Section 122(2) ERA provides: Where the tribunal considers that any conduct of the complaint 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.

[73]The relevant parts of Section 123 ERA provide: (1) […] 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. […] (4) In ascertaining the loss [sustained by the Claimant] the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law of England and Wales or (as the case may be) Scotland. […] (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.

[74]The relevant parts of Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 provide: Effect of failure to comply with Code: adjustment of awards (1) This section applies to proceedings before an employment tribunal relating to a claim by an employee under any of the jurisdictions listed in Schedule A2

[75]Schedule A2 includes unfair dismissal. Section 207A continues: (2) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that—(a) the claim to which the proceedings relate concerns a matter to which a relevant Code of Practice applies,

(b) the employer has failed to comply with that Code in relation to that matter, and

(c) that failure was unreasonable, the employment tribunal may, if it considers it just and equitable in all the circumstances to do so, increase any award it makes to the employee by no more than 25%. […] (4) In subsections (2) and (3), “relevant Code of Practice” means a Code of Practice issued under this Chapter which relates exclusively or primarily to procedure for the resolution of disputes.

[76]The ACAS Code states: “1. This Code is designed to help employers, employees and their representatives deal with disciplinary and grievance situations in the workplace.• Disciplinary situations include misconduct and/or poor performance. If employers have a separate capability procedure they may prefer to address performance issues under this procedure. If so, however, the basic principles of fairness set out in this Code should still be followed, albeit that they may need to be adapted.

• Grievances are concerns, problems or complaints that employees raise with their employers. The Code does not apply to redundancy dismissals or the non- renewal of fixed-term contracts on their expiry.” Caselaw

[77]In respect of mitigation of loss, the EAT set out in Gardiner-Hill v Roland Berger Technics Ltd

1982 IRLR 498

that where there is a substantial issue as to failure to mitigate the Tribunal should ask itself:(a) what steps were reasonable for the claimant to have to take to mitigate their loss;

(b) whether the claimant took reasonable steps to mitigate their loss; and

[78]The burden of proving that there has been failure to mitigate is on the employer - Cooper Contracting Ltd v Lindsey [2016] ICR D3: “What had to be proved was that the claimant had acted unreasonably; he did not have to show that what he did was reasonable. There was a difference between acting reasonably and not acting unreasonably, and what was reasonable or unreasonable was a matter of fact. It was to be determined taking into account the views and wishes of the claimant as one of the circumstances, though it was the tribunal’s assessment of reasonableness and not the claimant’s that counted. The tribunal was not to apply too demanding a standard to the victim. He was not to be put on trial as if the losses were his fault, when the central cause was the act of the wrongdoer.”

[79]The chances of whether or not the employee would have been retained must be taken into account when calculating the compensation to be paid to the employee - Polkey v A E Dayton Services Ltd

[1987] IRLR 503

HL.

[80]Tribunals are required to take a common-sense approach when assessing whether a Polkey reduction is appropriate - Software 2000 Limited v Andrews

[2007] IRLR 568

and the nature of the exercise is necessarily “broad brush” - Croydon Health Services NHS Trust v Beatt

[2017] IRLR 748

. The assessment is of what the actual employer would have done had matters been dealt with fairly (though it did not do so beforehand), not how a hypothetical fair employer would have acted (Hill v Governing Body of Great Tey Primary School

[2013] IRLR 274

[81]In Williams v Amey Services Ltd (

EAT/0287/14

), the EAT noted that the Tribunal has a broad discretion in assessing any Polkey reduction and summarised the approaches the Tribunal can take: “In some cases it might be just and equitable to restrict compensatory loss to a period of time, which the ET concludes would have been the period a fair process would have taken. In other cases, the ET might consider it appropriate to reduce compensation on a percentage basis, to reflect the chance that the outcome would have been the same had a fair process been followed. In yet other cases, the ET might consider it just and equitable to apply both approaches, finding that an award should be made for at least a particular period during which the fair process would have been followed and thereafter allowing for a percentage change that the outcome would have been the same. There is no one correct method of carrying out the task; it will always be case-and-fact- specific.”

[82]Loss of trust and confidence can be an SOSR, however a break down in trust and confidence is not a convenient label to use in any situation in which the employer feels let down by an employee or for the employer to use as a reason for dismissal whenever a conduct reason is unavailable or inappropriate – Leach v Office of Communications

2012 ICR 1269

, CA. It is important to identify why the employer considered it impossible to continue to employ the employee – A v B

2010 ICR 849

. The tendency for trust and confidence to be used outside the context of constructive dismissal is "a form of mission creep which should be resisted" – McFarlane v Relate Avon Ltd

2010 ICR 507

[83]Where a dismissal was due to a breakdown in a working relationship it is necessary […] to ascertain whether the employer had taken reasonable steps to try to improve the relationship. To establish that a dismissal was not unfair, an employer has to show not only that there had been a breakdown but that the breakdown was irremediable. The question is whether the employer had taken "sensible, practical and genuine efforts to see whether an improvement can be effected". Turner v Vestric

1980 ICR 528

[84]When considering contributory fault the conduct must be “culpable or blameworthy” - Bell v The Governing Body of Grampian Primary School

[2007] All ER (D) 148

. Three factors must be satisfied (Nelson v BBC (No 2)

[1980] ICR 110

):(a) the conduct of the employee must be culpable or blameworthy, which can include conduct that was foolish or perverse or unreasonable in the circumstances;

(b) the conduct must have actually caused or contributed to the dismissal; and

[85]There are a number of EAT cases concerning the application of the ACAS Code to ‘some other substantial reason’ (SOSR) dismissals.85.1 The ACAS Code has been applied to a dismissal for SOSR where the relationship between the parties had broken down and there was a conduct issue, even if ultimately the dismissal was not for conduct but for SOSR - Lund v St Edmunds School

[2013] ICR 26

85.2 If the ACAS Code is given a purposive instruction it should apply to a dismissal for SOSR – Hussain v Jury’s Inn Group Ltd

EAT/0283/15

85.3 While elements of the ACAS Code should be applied to SOSR dismissals, clear words in the ACAS Code are required to give effect to the sanction in Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992, therefore the ACAS Code does not “in terms” apply to dismissals for SOSR - Phoenix House Ltd v Stockman

[2016] IRLR 849

85.4 In Rentplus UK Ltd v Coulson

[2022] EAT 81

the EAT doubted the conclusion in Phoenix House that the ACAS Code does not apply to SOSR dismissals. It expressed the view (obiter) that the weight of authority was against Phoenix House: “If an employer considers that an employee is guilty of misconduct or has rendered poor performance, I incline to the view that the Acas Code is applicable even if it said that dismissal is for SOSR because it resulted from the response of fellow employees to the misconduct or poor performance that had led to a breakdown in working relationships. However, it is not necessary to determine the point in this appeal. I consider it is clear that the applicability of the Acas Code is a matter of substance rather than form.”

CONCLUSIONS

[86]The Tribunal’s conclusions on each of the issues set out in paragraph 9 are set out below. What financial losses has the dismissal caused the Claimant?

[87]The parties have agreed that the Claimant’s financial loss from the effective date of termination (12 March 2025) up to the date of the hearing (17 weeks) was £35,994.84 comprising:• £22,441.02 for loss of basic salary (net);

• £500 for loss of statutory rights;

• £7,846.15 for loss of pension benefit

• £442 for loss of private medical insurance; and

• £4,765.67 for expenses.

[88]The Claimant’s loss was ongoing at the date of the hearing. The Claimant seeks compensation for future loss for 35 weeks after the date of the hearing (up to 12 March 2026, which is 12 months after the effective date of termination). In its counter-schedule of loss the Respondent states that the period for any future loss should be limited to 8 weeks after the date of the hearing (up to 4 September 2025, which is almost six months after the date of termination). The key issue is whether the Claimant has acted reasonably in the steps he took to mitigate his loss, which is addressed below. Has the Claimant taken reasonable steps to replace his lost earnings since 12 March 2025, for example by looking for another job?

[89]Ms Garner acknowledged in her closing submissions that setting up a new business is an acceptable form of mitigation but submitted that the lack of indication from the Claimant as to when he would have a product ready to market meant that it would not be just and equitable for the award of compensatory loss to exceed six months after the termination date. This was on the basis of an assertion that it would be usual for an executive at the Claimant’s level to secure a new role within six months (and in fact the Claimant had longer than this as he was able to explore and apply for roles while he was on garden leave). Ms Garner submitted that the Claimant’s failure to take any steps at all to find alternative employment does not amount to reasonable mitigation. Ms Shui submitted that the Claimant’s reasons for setting up his own business (paragraphs 64 to 69 above) meant that he has taken reasonable steps to mitigate his loss.

[90]The Tribunal has to consider whether, following the guidance in Gardiner-Hill, there were different steps that were reasonable for the Claimant to take in order to mitigate his loss, and whether he took those steps.

[91]Without any clear indication of the timeframe in which the Claimant’s new business would start to generate revenue or what that revenue would be, the Tribunal finds that it would have been reasonable for the Claimant to look into and apply for employed roles during his period of garden leave and after the termination date:91.1 It was reasonable for the Claimant to assume he was bound by his post-termination restrictive covenants, for the reasons set out above at paragraphs 64 and 65, but this did not preclude him from applying for roles in a business that did not compete with Acton Banks (whether in the recruitment sector or not). The Claimant clearly has transferrable skills, for example in sales and technology, which mean he was not limited to applying for roles in the recruitment sector;

91.2 It was not reasonable for the Claimant to simply assume that an employer would not accommodate his requirement to work somewhat flexibly in order to continue with arrangements to see his son in London. Flexible working arrangements are very common. The Tribunal accepts that some employers may be less willing to agree to flexible working arrangements for those in senior executive posts and it may have taken the Claimant a little longer than usual to find a role on that basis, but it is unreasonable to assume that this will always be the case without making any enquiries or applying for any roles. If not, for what period of loss should the Claimant be compensated?

[92]The Tribunal accepts the Respondent’s point that it would usually take a senior executive around six months to find a new role of a similar level. However, for the reasons outlined above the Tribunal finds that it may have taken the Claimant a little longer to find a role that would accommodate his flexible working requirements. The Tribunal therefore determines that it may have taken between six and nine months from 12 March 2025 to find a new role at a similar executive level.

[93]The Tribunal therefore concludes that the Claimant should be compensated for loss from 12 March 2025 up to 12 December 2025, allowing him up to nine months from the effective date of termination to find new employment in a similarly remunerated role. This is 22 weeks after the hearing date and 39 weeks from the effective date of termination.

[94]Future loss is therefore £39,767.20 (net):• 22 x £1,320.06 (basic salary) = £29,041.32

• 22 x £461.54 (pension (£24,000 / 52)) = £10,153.88

• 22 x £26 (private medical insurance (£1,352 net / 52) = £572.

[95]Total net loss is therefore £75,762.04 (£35,994.84 (past loss) + £39,767.20 (future loss)). Is there a chance that the Claimant would have been fairly dismissed anyway if a fair procedure had been followed, or for some other reason?

[96]It is the Claimant’s case that the Respondent’s reason for dismissing him was to deprive him of the value of his loan notes. He asserts that the decision to dismiss him was predetermined and that the Respondent refers to ‘Material Underperformance’ in his termination letter in order to argue that he is a ‘Bad Leaver’ under the Articles and therefore subordinate his management loan notes to Maven’s loan notes under the Investment Agreement (paragraph 16 above). In her cross-examination, Ms Shui put it to Mr Purkis that Mr Bates’ request to see the Investment Agreement and Articles in June 2024 and discussions between Mr Bates and Mr Purkis in August 2024 about the Claimant’s leaver status was evidence that the Respondent wanted to deprive the Respondent of the value of his loan notes.

[97]The Respondent submits that the reason for the dismissal was the breakdown in the relationship of trust and confidence between the Respondent and the Claimant, in light of the financial underperformance of Acton Banks. Mr Purkis broke down the issues as follows (as contained in Ms Garner’s written submissions):97.1 Unsustainable levels of loss;

97.2 Inability to get on with the Chair(s) and CFO(s);

97.3 Inability to address the strategy that was required to return the Respondent to profitability;

97.4 Failure to act in the best interests of the Respondent; and

97.5 Obstructive conduct.

[98]Whether or not there was ‘Material Underperformance’ as defined in the Investment Agreement is not a relevant issue in this case. To determine whether the rule in Polkey should apply, the Tribunal must consider whether there was a fair reason to dismiss the Claimant and whether there is a chance that the Respondent would have fairly dismissed the Claimant in any event.

[99]The Tribunal does not accept the Claimant’s position on this point.99.1 The termination letter does not just refer to ‘Material Underperformance’. It also states “the level of underperformance of the Group is such that you have lost the confidence of other members of the [Board]”.

99.2 Furthermore, whilst it is right that Mr Bates asked for copies of the Investment Agreement and Articles during the first few weeks of his appointment (paragraph 40) and that there was a discussion about obtaining advice on the Claimant’s leaver status before he was dismissed (paragraph 52), the Tribunal accepts Mr Purkis’ evidence that this was not unusual in the circumstances; a turnaround specialist advising an investor would be expected to look at all the circumstances including a worst case scenario and it is common practice for an investor to check an executive’s leaver status if they are considering the termination of their employment (whatever the reason). Whilst the dismissal was pre-determined, in the sense that the decision had been made before the Respondent met with the Claimant on 12 September 2024 (as outlined in paragraph 52 above), this does not mean that the Respondent’s reason for dismissing the Claimant was to deprive him of the value of his loan notes.

[100]The Tribunal also does not accept the Respondent’s submission that the Claimant had failed to act in the best interests of the Respondent or that the Claimant was obstructive. The Claimant obviously felt very passionately about the business and was doing what he felt was best in the circumstances.

[101]What is clear is that Acton Banks was in dire straits financially and that the Claimant and the Respondent (including Mr Bates and Maven) had very differing views on a number of key issues including: the need to focus on sales above everything else; short term versus medium term solutions for the poor financial performance; appropriate salary levels for the executive team at a time of financial stress; and the performance of Mr Uppal as CFO and the impact it was having on the culture of the business. The Claimant held strong views about all of those matters and what he saw as the way forward. The Respondent had genuine concerns about the Claimant’s ability to articulate and deliver the strategy he had put in place to deal with the financial situation (particularly after the observations from Mr Marsh) and the Claimant’s ability to lead the business out of its underperformance.

[102]For those reasons the Tribunal finds that the relationship between the Claimant and the Respondent had broken down and that this was the reason for which the Respondent decided to dismiss the Claimant. Whether or not the Respondent could have fairly dismissed the Claimant on that basis (notwithstanding the failure to follow any dismissal process) is a separate matter, dealt with below.

[103]Whilst it is possible to fairly dismiss on the grounds of SOSR on the basis of there being a loss of trust and confidence, the Tribunal finds that the Respondent failed to do so in this case.

[104]Not only did the Respondent fail to follow a fair dismissal process (which it admits), applying the approach in Turner v Vestric the Tribunal finds that the Respondent did not take reasonable steps to improve the relationship and that the breakdown was not irremediable. The Respondent certainly impressed upon the Claimant the urgency of the situation and this was not lost on the Claimant. However, at no stage did the Respondent explain to the Claimant that it had concerns with his approach or his leadership of the business and then give him time to improve or change in response to that feedback. Furthermore, it did not share with the Claimant the (independent) observations of Mr Marsh.

[105]If the Respondent had taken such steps, there is a possibility that the relationship between the Respondent and the Claimant could have improved. In particular, the Claimant’s strongly held views on certain matters might have changed or evolved had he known of Mr Marsh’s observations about him and the business (paragraph 56). It is clear from the Claimant’s evidence that he held Mr Marsh in very high regard and the Tribunal considers that had the Claimant known about Mr Marsh’s observations he may have approached matters differently, which in turn could have improved the relationship between the Claimant and the Respondent. If so, should the Claimant’s compensation be reduced? By how much?

[106]The Respondent submits that the Claimant’s compensation should be reduced by 50% on the basis that the ongoing financial underperformance and the Claimant’s approach and conduct would inevitably have resulted in a fair dismissal within six months. In his evidence, Mr Purkis explains this is because he understood that a formal capability process would have been completed in six months.

[107]The Claimant submits that the Respondent has not shown that it would have dismissed the Claimant for a fair reason and conducted that fair dismissal within six months.

[108]Given the strongly held views of the Claimant about the ways in which to turn around the performance of the business, and the extent to which they differed from those of Mr Bates and Maven, the Tribunal finds that it could have been possible for the Respondent to dismiss the Claimant fairly for SOSR on the basis of loss of trust and confidence. The Tribunal also finds that six months would have been a reasonable period of time over which the Respondent could have taken reasonable steps to improve relations with the Claimant and/or for the Claimant to improve the elements of his performance and approach about which the Respondent had concerns. However, the Tribunal does not consider that it would then have been inevitable that the Claimant’s dismissal would be fair. For the reasons set out in paragraph 105 above, the Tribunal finds that there is a possibility that the relationship between the Claimant and the Respondent could have improved had the Respondent taken such steps and, in particular, informed the Claimant about Mr Marsh’s observations.

[109]Applying the principles Williams v Amey Services Ltd, the Tribunal therefore concludes that it would not be just and equitable to reduce the Claimant’s compensation for the first six months’ worth of the Claimant’s period of loss (26 weeks). However, for the reasons set out above, it would be just and equitable to reduce the Claimant’s compensation for the remaining period of loss (13 weeks) by 50%.

[110]This reduces the total net loss to £58,747 as follows:110.1 26 weeks’ unreduced loss = £46,997.60:

• 26 x £1,320.06 (basic salary) = £34,321.56

• 26 x £461.54 (pension) = £12,000.04

• 26 x £26 (private medical insurance) = £676.

110.2 13 weeks’ loss reduced by 50% = £11,749.40:

• 13 x £1,320.06 (basic salary) = £17,160.78 / 2 = £8,580.39

• 13 x £461.54 (pension) = £6,000.02 / 2 = £3,000.01

• 13 x £26 (private medical insurance) = £338 / 2 = £169. Did the ACAS Code apply?

[111]Whilst there are a number of EAT cases concerning the application of the ACAS Code, with differing outcomes, the balance of the caselaw including the most recent case (Rentplus) is that the ACAS Code is applicable where the dismissal is for SOSR because it resulted from an employee’s conduct or performance that had led to a breakdown in working relationships. The Tribunal therefore concludes that the ACAS Code did apply to the Claimant’s dismissal. Did the Respondent or the Claimant unreasonably fail to comply with it? If so, is it just and equitable to increase or decrease any award payable to the Claimant? By what proportion, up to 25%?

[112]The Tribunal finds that the Respondent unreasonably failed to comply with the ACAS Code. In fact, it took no steps to comply with the ACAS Code. The Tribunal therefore concludes that it is just and equitable to increase the award payable to the Claimant by 25%. Did the Claimant cause or contribute to the dismissal by blameworthy conduct?

[113]For the reasons set out above, the Tribunal finds that the Claimant was not obstructive or unco-operative as submitted by the Respondent and that the Claimant did not otherwise cause or contribute to the dismissal by blameworthy conduct. If so, would it be just and equitable to reduce the Claimant’s compensatory award? By what proportion?

[114]In light of the finding above, the Tribunal need not consider this point. Does the statutory cap of fifty-two weeks’ pay or £115,115 apply?

[115]In light of the findings above and the calculations at paragraph 116, the statutory cap does not apply. What (if any) amount of compensatory award is just and equitable in all the circumstances, in accordance with s. 123(1) ERA?

[116]The compensatory award the Tribunal orders to be paid is calculated as follows: Financial loss caused by dismissal £58,747 Loss of statutory rights £500 Expenses £4,765.67 £64,012.67 Uplift of 25% for failure to comply with ACAS Code £16,003.17

£80,015.84

[117]Grossed up for tax (taking into account the personal allowance, the basic rate at 20% and the higher rate at 40%), the compensatory award is £100,113.07 (net). What basic award is payable to the Claimant?

[118]The parties have agreed that a basic award of £11,550 is payable to the Claimant. Would it be just and equitable to reduce the basic award because of any conduct of the Claimant before the dismissal? If so, to what extent?

[119]For the reasons set out above, the Tribunal finds that it would not be just and equitable to reduce the basic award because of any conduct of the Claimant before the dismissal. Approved by: