Mr C Vernon v Kelvin Controls Engineers Ltd: 8002014/2025
EMPLOYMENT TRIBUNALS (SCOTLAND)
Case No 8002014/2025
Between
Mr Christopher VernonClaimantKelvin Controls Engineers LtdRespondent
Before
Employment Judge L WisemanMr B Doherty (instructed by Solicitor) for respondentDate 15 January 2026
JUDGMENT
The judgment of the tribunal is:(i) to dismiss the claim of unfair dismissal and(ii) to order the respondent to pay to the claimant the sum of £4211.57 (gross) in respect of four weeks’ notice which the respondent accepted was due to be paid to the claimant.
REASONS
[1]The claimant presented a claim to the Employment Tribunal on the 18 August 2025 alleging he had been unfairly dismissed and that 4 weeks’ notice pay was outstanding.[2]The respondent entered a response in which it denied the claimant had been dismissed and asserted there had been a mutual termination of employment in circumstances where the claimant had wanted to pursue being selfemployed.[3]I heard evidence from Mr Christopher Kelly, Managing Director and from the claimant. I was referred to a number of documents produced by the parties. I, on the basis of the evidence before me, made the material findings of fact set out below.[4]Mr Doherty, at the commencement of the hearing, accepted on behalf of the respondent that the sum of 4 weeks’ notice was due to be paid to the claimant. This amounted to the sum of £4211.57 gross.
Findings of fact
[5]The respondent is a small company employing 31 employees. The company is involved with building and installing electrical management systems.[6]The claimant commenced employment with the respondent on 1 June 2017 and was employed as Head of Software Development until the termination of his employment on the 31st May 2025.[7]The respondent company set up another company, Allander Analytics Ltd, in 2018. This company was established to create the software to be sold and installed by the respondent company. The claimant and Ross Taggart (the software developers employed by the respondent) were based at Allander Analytics and were the only two people working there.[8]In December 2024 a decision was made to return the claimant and Mr Taggart to be based back in the respondent company. Allander Analytics continued to be supported by the respondent company, although a review regarding the future had to be undertaken.[9]The claimant had had a great deal of freedom when based at Allander Analytics in terms of the time he arrived at and left the office and when he was present in the office. The return to be based at the respondent company brought these issues sharply into focus.[10]The claimant emailed Mr Kelly on the 19 February 2025 (page 114) and the subject of the email was “Clearing the air …” The claimant, in that email, sincerely apologised for his attitude recently and explained he had been dealing with some personal challenges and had let his frustrations spill over into work. The claimant acknowledged this was not fair to Mr Kelly, the company or the other software developer. The claimant went on to say that his reluctance to be in the office was not out of a lack of respect or commitment but was to do with balancing family commitments. The claimant noted that if it was felt that he had become a hinderance, he would step aside.[11]Mr Kelly was shocked and disappointed to receive the email but also sympathetic to the claimant’s position. Mr Kelly and the claimant continued to meet to have discussions regarding the claimant’s attendance at the office, his frustrations and the general frustrations surrounding Allander Analytics which, all believed, should be supported but not in its current format.[12]Mr Kelly emailed the claimant on the 22 April (page 153) stating he had been reflecting on their discussions over the past weeks and was looking to forge a more productive path for both parties. Mr Kelly proposed a meeting the following day.[13]Mr Kelly and the claimant met on the 23 April and the subject for discussion was that things were not working and what could be done to make the relationship work given there were issues with not knowing if/when the claimant would be in the office. The claimant had worked at home on three occasions, but collaboration was an essential part of the respondent’s working environment and accordingly this was not a longer term option.[14]The focus of discussion at the meeting on the 23 April was the claimant continuing to work for the respondent but on a self -employed basis. Mr Kelly had available a draft self-employed document to discuss.[15]The claimant had to give the matter some thought. He emailed Mr Kelly on the 27 April (page 156) and said “After researching the pros and cons, I do think you’re right that this approach makes sense for both of us…” The claimant went on to refer to self-employment giving him more flexibility regarding childcare but maintaining a committed and professional relationship with the respondent. The claimant set out some points regarding level of payment and confirmed his plan to set up a limited company because that appeared to be the most tax efficient route.[16]Mr Kelly and the claimant continued to have discussions regarding the level of payment, and the claimant took time to revise the terms of the draft selfemployed agreement (page 157). The draft agreement was dated 1st June 2025: this was the date the parties expected it to start.[17]The claimant emailed Mr Kelly on the 20 May (page 174) saying he had reviewed the agreement and noted a number of terms which required to be reviewed.[18]Mr Kelly responded by email on the same date (page 173) agreeing what could be revised. Mr Kelly concluded his email by stating “It’s new to both parties – we both need to understand how it will work. If the contract needs revised, we have flexibility to do so – neither party gets stuck in something for 3 months that isn’t working”.[19]The claimant responded on the 27 May (page 172) and enclosed a draft contract which he had drafted between the respondent company and Strathcode Ltd, which was the company he had incorporated on the 22 May 2025.[20]Mr Kelly responded on the 28 May (page 171) attaching the proposed contract terms and confirming that the claimant’s last day of employment with the respondent would be 31 May 2025.[21]The claimant replied on 29 May (page 171) to thank Mr Kelly for sending the proposed contract terms through and to confirm he was having the terms reviewed by a third party and would come back to Mr Kelly later that day.[22]The claimant emailed Mr Kelly at 8pm on 29 May (page 170) to say that he did not believe the proposed arrangement would work for either of them. The claimant noted he had not agreed to his employment terminating on 31 May. The claimant attached a settlement agreement which he had drafted seeking well in excess of a year’s salary.[23]Mr Kelly was shocked to receive the claimant’s email: the claimant knew how critical he was to the development of the platform and what the respondent was trying to achieve with it, and the discussions had all been focussed on finding a way to retain the claimant but on a basis which suited him. Mr Kelly emailed the claimant at 9pm on 29 May (page 169) saying that in order to move forward with a self-employed agreement the claimant would need to either resign or agree to a mutual termination of employment. If the claimant did so, the company would be happy to negotiate terms. If the claimant did not wish to do this, the company would exercise its right to formally give the claimant notice. Mr Kelly confirmed that even if this latter route was taken, the company remained willing to explore a sub-contractor relationship with the claimant.[24]Mr Kelly considered the matter overnight and was of the opinion the company had been backed into a corner. He emailed the claimant on 30 May (page 168) attaching a formal letter (page 197) confirming termination of employment on 30 June 2025. The letter stated that the decision reflected the company’s evolving resource model and future operating structure. The company was moving towards a more flexible project – based approach and noted the claimant’s own communications had indicated a desire to explore subcontracting through his newly created company. The letter confirmed the company remained open to exploring a post-employment engagement on agreed terms. The letter went on to confirm the decision was not related to performance or conduct concerns, but reflected a combination of contractual and organisational considerations, particularly in light of the anticipated change in working arrangements.[25]The claimant did not work his period of notice. He provided a sick note and did not return to work. The claimant’s employment ended on 30 June 2025.[26]The claimant’s work was taken over by Ross Taggart, who is the respondent’s only software developer. The respondent did have a summer student working with them for 4 months, but he has returned to university.[27]The claimant has, since dismissal, been applying for jobs (he applied for 46 jobs during June and July 2025). The claimant attended for one interview, but was not successful.[28]The claimant starting doing work in August 2025 for a number of tour operators to maintain their websites. This work has increased and now occupies the claimant full time. (The claimant produced a document detailing his income from this work). Credibility and notes on the evidence[29]There was little factual dispute between the parties in this case. The key dispute focussed on when the draft self – employed agreement had been provided to the claimant. Mr Kelly maintained that it had been produced and discussed at the first meeting and that it had always been clear that the start date for the agreement was 1 June 2025 (and accordingly the end date for the claimant’s employment would be 31 May 2025). Mr Kelly supported that position by referring to the fact that arrangements within the respondent company had to be made for the claimant leaving on that date, for example, payroll and that this had all been in place.[30]The claimant’s position was that he was on annual leave on the first two weeks in May and had returned to work on 19 May and this was when Mr Kelly had handed him a draft agreement. The claimant’s position was that the first he heard that his employment would end if there was no agreement was on the 28 May.[31]The tribunal preferred the evidence of Mr Kelly regarding this matter and found as a matter of fact that during the meeting on 23 April 2025 Mr Kelly produced a draft agreement for discussion. The tribunal preferred Mr Kelly’s evidence regarding this matter because we considered that Mr Kelly would have wanted to be prepared going into the meeting on 23 April and those preparations would have included having a draft agreement available to discuss.[32]The tribunal considered that the claimant’s suggestion that he had been given the draft agreement on 19 May, reviewed it by the following day, incorporated his company and drafted a new agreement between the respondent company and his company by 27 May lacked credibility, particularly against a background where the claimant had told Mr Kelly he needed time to consider things.[33]The tribunal also accepted that the starting date for self-employment was the 1 June 2025 and this was known to the claimant. The date was clearly set out in the draft agreement and there was no dispute regarding the fact the claimant was provided with a copy of the draft agreement. Respondent’s submissions[34]Mr Doherty submitted the claimant had been dismissed for some other substantial reason in circumstances where the relationship had broken down because it had been agreed the claimant would leave the respondent’s employment in order to become self-employed on 1 June 2025 but 2 days prior to this date the claimant had changed his mind and wanted a settlement agreement.[35]Mr Doherty referred to the case of Gallagher v Abellio Scotrail Ltd EAT/0027/19 where the EAT had accepted that in the circumstances further procedure would have been futile. Mr Doherty invited the tribunal to accept that in this case, further procedure would have been futile.[36]Mr Doherty submitted that if the tribunal found the dismissal to have been unfair, a significant Polkey reduction should be made. Claimant’s submissions[37]Mr Vernon submitted there had not been any agreement to go self-employed and the letter of termination of employment had been issued unilaterally. There was no consultation; he had not been told his employment was at risk; there had been no opportunity to make any representations and options such as flexible working or working reduced hours had not been considered.[38]Mr Vernon acknowledged the correspondence from Mr Kelly referred to being open to working together but he had not made any attempt to have discussions with the claimant once notice of termination had been issued.[39]Mr Vernon invited the tribunal to find his dismissal unfair and to make an award of compensation as set out in the Schedule of Loss. Discussion and decision[40]The tribunal firstly had regard to the terms of section 98 Employment Rights Act which provides that it is for the employer to show the reason for the dismissal and that it is one of the potentially fair reasons set out in sections 98(1) and (2). If the employer is successful in showing the reason for the dismissal, the tribunal must then determine whether the dismissal was fair or unfair under section 98(4). This requires the tribunal to consider whether the employer acted reasonably in dismissing the employee for the reason given.[41]The respondent, at this hearing, accepted it had dismissed the claimant and asserted the reason for doing so was some other substantial reason in terms of section 98(1), which refers to dismissal for “some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held”.[42]The tribunal noted the claimant did not seek to challenge this had been the reason for the dismissal. There was no dispute between the parties that the reason for the dismissal had not concerned conduct or performance and the claimant was satisfied with this confirmation by the respondent. The claimant, beyond this, did not challenge what was said by the respondent regarding some other substantial reason being the reason for the dismissal.[43]The tribunal accepted Mr Kelly’s evidence that things between him and the claimant were “not working”. The claimant was one of two software developers and was critical to the work/product developed by Allander Analytics for the respondent. The tribunal formed the impression from the evidence that whilst all agreed the concept of Allander Analytics was good, it was not successful in its current format and would therefore need to change and there were frustrations with this.[44]There also appeared to be no dispute regarding the fact that the claimant struggled with returning to be based in the respondent company and there were frustrations with not knowing if/when the claimant would be in the office. The claimant’s email to Mr Kelly on 19 February acknowledged these matters and apologised for them. The fact the claimant was prepared to step aside because of these issues highlighted for the tribunal the fact he knew things were, as Mr Kelly put it, “not working”.[45]The tribunal accepted that the working relationship between Mr Kelly and the claimant had broken down insofar as it could not continue in its current employer/employee format. The tribunal also accepted Mr Kelly’s evidence that if the claimant had not been interested in going self-employed, then there would have had to be a discussion and some other process put in place to resolve matters, for example, a redundancy.[46]The tribunal considered it was very clear from the evidence and the emails to which it was referred that both parties considered self-employment an attractive way forward because the respondent would retain the work and experience of the claimant and it would provide the claimant with the flexibility he required. There were constructive discussions and the claimant had significant input regarding the terms of a draft agreement. The tribunal found that both parties were planning for an agreement to be reached and for selfemployment to come into effect on 1 June 2025. This was evidenced by the fact the claimant had set up his limited company in preparation for the new arrangements.[47]The claimant advised Mr Kelly, by email sent at 8pm on 29 May, that he could not agree the terms and, instead, he proposed a settlement agreement. The claimant explained that there was a clause in the agreement that he could not accept, however he offered no explanation why he did not seek to negotiate either the removal of this clause or a variation to it, rather than rejecting the whole agreement.[48]Mr Kelly’s response to this was to advise the claimant that there could be no further discussions regarding self-employment until the claimant either resigned or there was a mutual agreement to leave. Mr Kelly shortly thereafter took the decision to terminate the claimant’s employment.[49]The tribunal was satisfied that the reason for the dismissal was some other substantial reason in terms of section 98(2) Employment Rights Act. The working relationship between Mr Kelly and the claimant had broken down insofar as it could not continue in its current format (employer/employee). The parties had worked towards agreeing an alternative working arrangement (the claimant being self-employed) but the claimant rejected that proposal very close to the date for it coming into effect. The tribunal accepted this was not a situation whereby the claimant would return to work if the discussions failed: the whole purpose of the discussions had been to address the fact the working relationship was not working. The tribunal concluded the respondent had shown these were the reasons for dismissal and that they amounted to some other substantial reason.[50]The tribunal must now go on to consider whether dismissal for that reason was in all the circumstances, including the size and administrative resources of the employer’s undertaking, fair (section 98(4) Employment Rights Act). The test is whether the decision to dismiss fell within the band of reasonable responses.[51]The claimant sought to challenge the fairness of the dismissal because of the lack of any procedure followed by the respondent. The tribunal noted there was no dispute regarding the fact the respondent did not follow any formal procedure before dismissing the claimant.[52]The case of Polkey v A E Dayton Services Ltd 1988 ICR 142 firmly established procedural fairness as an integral part of the reasonableness test under section 98(4). The exception to this is if an employer could reasonably have concluded that a proper procedure would be utterly useless or futile.[53]Mr Doherty referred the tribunal to the case of Gallagher v Abellio Scotrail Ltd (above) which was a case involving a dismissal without any procedure being followed as a result of a breakdown in relations between the claimant and her manager. In that case the decision of the Employment Tribunal that the dismissal was fair was upheld by the EAT. Mr Doherty submitted the respondent had been in the same position and that further meetings would have been futile.[54]The tribunal, in considering this submission, noted that although the relationship between Mr Kelly and the claimant had not irretrievably broken down, the issue was the working relationship which had broken down to the extent that any ongoing relationship would have to be something other than employer/employee.[55]The claimant argued that following a procedure would have allowed for further discussions between himself and Mr Kelly regarding other options, such as flexible working or working reduced hours. The tribunal could not accept that argument because it ignored the fact that the employer/employee working relationship had broken down and any ongoing working relationship between Mr Kelly and the claimant would have to be in a different format, for example, the claimant being self-employed.[56]The tribunal also noted that the actions of the claimant in rejecting the draft agreement at a very late stage and proposing a settlement agreement to end the employment relationship, essentially created a stalemate. The claimant did not seek to negotiate further the terms of the draft agreement and, by proposing a settlement agreement, indicated he was seeking to end the employment relationship. In those circumstances the claimant did not offer any explanation what he believed further procedure could have achieved.[57]Mr Kelly’s reaction to the claimant’s rejection of the draft agreement and proposal of a settlement agreement was to take the draft agreement off the table and confirm there would be no further discussions regarding that matter unless the claimant resigned or there was a mutual termination of employment. Mr Kelly considered the financial figure included in the settlement agreement to be “wholly unrealistic”.[58]The tribunal asked itself whether the respondent could reasonably have concluded that a proper procedure would be futile. The tribunal, having regard to the above points, concluded that the respondent could reasonably have concluded a proper procedure would be futile. The tribunal reached that conclusion because the parties had, by their actions, removed all available options: the claimant had rejected the draft agreement for becoming selfemployed and Mr Kelly had taken it off the table until the claimant’s employment ended; the claimant, by proposing a settlement agreement indicated he did not want to return to work; there could not be a return to an employer/employee working relationship because it had broken down and Mr Kelly was not interested in a settlement agreement based on an unrealistic financial amount. Any meetings between the claimant and Mr Kelly may have soured things further. The resolution to the situation was the dismissal of the claimant.[59]The tribunal asked itself whether the respondent’s decision to dismiss the claimant fell within the band of reasonable responses which a reasonable employer might have adopted. The tribunal decided that the respondent’s decision to dismiss did fall within the band of reasonable responses and that it was fair. The tribunal decided to dismiss the claim of unfair dismissal.[60]The claimant’s claim in respect of the payment of notice was admitted by the respondent and I order the respondent to pay to the claimant four weeks’ notice in the sum of £4211.57 (gross). Mr Doherty submitted this sum should be paid net, but he provided no figures to allow the tribunal to award a net sum. In the circumstances therefore, the sum awarded to the claimant is gross.