Finance consultant who tried to blackmail employer loses all claims and faces huge costs
A finance and accounting consultant who threatened to report his client for tax irregularities unless paid £600,000 has had all his employment tribunal claims dismissed. He was ordered to pay €86,200 in costs.
1 min read · Last updated 18 May 2026
Case details
- #independent-contractor
- #consultancy-agreement
- #blackmail
- #protected-disclosure
- #worker-status
- #costs-awarded
Key facts
- The claimant provided accounting and finance services to the respondent under a consultancy agreement he drafted himself.
- The claimant was offered an employment contract as CFO but declined and insisted on remaining a consultant.
- In April 2021, the claimant threatened to report the respondent for tax irregularities unless paid a large sum.
- The respondent terminated the claimant's engagement immediately after the blackmail attempt.
- The tribunal found the claimant was neither an employee nor a worker, so it had no jurisdiction over his claims.
- The claimant's claims were dismissed, and he was ordered to pay costs of €86,200.
Timeline
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Claimant started providing services
The claimant began providing accounting and finance services to the respondent on a consultancy basis.
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Consultancy agreement signed
The claimant drafted and signed a consultancy agreement, confirming his status as an independent contractor.
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Claimant insulted colleague Ms YL
The claimant sent abusive messages to Ms YL, the Head of People and Talent, calling her 'stupid'.
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First meeting with Mr Ageyev
The claimant met Mr Ageyev and threatened to close the company's bank accounts unless paid a large sum.
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Email to Mr Taranov
The claimant sent an email demanding around £600k, threatening to report tax irregularities.
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Second meeting and termination
The claimant demanded £500k exit payment and £250k loan. The respondent terminated his engagement immediately.
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Claim form presented
The claimant brought claims of unfair dismissal, protected disclosure detriment, and others.
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Final hearing began
The tribunal heard evidence over five days at London Central.
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Judgment and costs order
The tribunal dismissed all claims and ordered the claimant to pay €86,200 in costs.
The legal issue
The tribunal had to decide whether the claimant was an employee or worker of Ruby Labs Ltd, and if so, whether his dismissal was unfair or in retaliation for protected disclosures.
The outcome
The tribunal dismissed all claims because the claimant was not an employee or worker – he had drafted his own consultancy agreement and insisted on remaining an independent contractor. The tribunal also found that, even if it had jurisdiction, the claims would have failed: the claimant had tried to blackmail the company by threatening to report tax irregularities unless he was paid a large sum.
- No compensation was awarded because the claims were dismissed.
- The claimant was ordered to pay costs of €86,200 due to his unreasonable conduct in bringing and pursuing the case.
Lessons & takeaways
- If you work under a consultancy agreement you drafted yourself, you are unlikely to be classed as an employee or worker – check your status before bringing tribunal claims.
- Threatening to report your employer to HMRC unless you are paid off is gross misconduct and will justify immediate dismissal.
- Bringing a claim without reasonable prospects can lead to a costs order, even if you represent yourself.
- Employment tribunal protection only applies to employees and workers – independent contractors cannot bring unfair dismissal or whistleblowing claims.
This case shows what happens when a working relationship breaks down and one party tries to use a threat as leverage. The claimant, a finance and accounting consultant, had been providing services to Ruby Labs Ltd under a consultancy agreement he had drafted himself. When he was offered an employment contract as CFO, he declined and insisted on staying as a consultant.
In April 2021, after a series of disputes, the claimant sent an email demanding around £600,000 and threatening to report the company for tax irregularities if he was not paid. He followed this up with a meeting where he demanded a £500,000 exit payment and a £250,000 loan. The company terminated his engagement immediately.
Why the claims failed
The tribunal first had to decide whether the claimant was an employee or worker – a necessary gateway for most employment rights. Because he had drafted his own consultancy agreement, controlled his own work, and was not integrated into the business as an employee, the tribunal found he was an independent contractor. That meant it had no jurisdiction to hear any of his claims, including unfair dismissal and whistleblowing.
Even if he had been an employee, the tribunal said his claims would have failed. The blackmail attempt was a clear act of gross misconduct, and the company was entitled to dismiss him instantly. The tribunal also noted that the claimant had behaved unreasonably in pursuing the case, leading to a costs order of €86,200.
What this means for similar cases
This case is a reminder that employment status is not a matter of choice – it depends on the reality of the working relationship. If you have deliberately structured your work as a consultancy, you cannot later claim employee rights. It also shows that threatening an employer with disclosure of alleged wrongdoing to gain a financial advantage is not a protected disclosure – it is blackmail, and it will destroy any chance of a successful claim.
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