Co-founder CEO dismissed by own company: unfair dismissal win
A co-founder and CEO who was summarily dismissed for gross misconduct after a disciplinary meeting he did not attend has won his unfair dismissal claim. The tribunal awarded him over £41,000 in compensation.
1 min read · Last updated 18 May 2026
Case details
- #co-founder-ceo
- #shareholder-director
- #oral-contract
- #worker-status
- #employee-status
- #summary-dismissal
- #financial-misconduct-allegations
Key facts
- The claimant was a co-founder, shareholder, and CEO of the respondent.
- There was an oral agreement for the claimant to serve as CEO for a monthly salary of £5,000.
- The claimant was summarily dismissed for gross misconduct on 15 May 2020 after a disciplinary meeting he did not attend.
- The tribunal found the claimant was a worker and an employee of the respondent.
- The respondent was ordered to pay £3,228 basic award, £21,000 compensatory award, and £17,500 for unlawful deductions.
Timeline
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Company incorporation
The respondent was incorporated by the claimant to exploit an easyCoffee brand license.
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Investment agreement
The claimant, ASD, and others entered an investment agreement; the claimant was to be CEO with a £5,000 monthly salary.
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Board resolutions proposed
Samer Alsourni wrote to the claimant proposing resolutions to dilute his shareholding and remove him as CEO.
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Disciplinary meeting invitation
ASD invited the claimant to a disciplinary meeting on 7 May 2020 regarding financial misconduct allegations.
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Claimant objects and raises grievance
The claimant objected to the disciplinary process and raised a grievance about victimisation and unpaid salary.
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Disciplinary meeting without claimant
The respondent held the disciplinary meeting in the claimant's absence after he requested a postponement.
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Summary dismissal
The respondent dismissed the claimant for gross misconduct, offering a right of appeal.
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Claimant appeals
The claimant's counsel wrote appealing the dismissal; the respondent did not arrange an appeal meeting.
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Claimant removed as director
A shareholders' meeting resolved to terminate the claimant's directorship.
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Claim presented
The claimant presented his ET1 claiming unfair dismissal, breach of contract, and unlawful deductions.
The legal issue
The tribunal had to decide whether the claimant, as a co-founder and CEO with an oral contract, was a worker and an employee entitled to bring claims for unfair dismissal, breach of contract, and unlawful deductions from wages.
The outcome
The tribunal ruled in favour of the claimant on all claims. It found he was an employee and a worker, and that his summary dismissal for gross misconduct was unfair. The respondent had failed to follow a fair procedure by holding the disciplinary meeting without him and not arranging an appeal meeting.
The compensation awarded was:
- Basic award: £3,228
- Compensatory award: £21,000
- Unlawful deductions from wages: £17,500
- Total: £41,728
Lessons & takeaways
- Even co-founders and CEOs can be employees if they have an oral contract for salary and work under the company's control.
- Holding a disciplinary meeting in the employee's absence without good reason is likely to make any subsequent dismissal unfair.
- Failing to arrange an appeal meeting after a dismissal can further undermine the fairness of the process.
- Unlawful deduction claims can succeed alongside unfair dismissal if the employer withholds wages without proper authority.
This case shows that even a co-founder and CEO can be an employee, entitled to the same protections as any other worker. The claimant had an oral agreement to serve as CEO for a monthly salary of £5,000, but when a dispute arose with other shareholders, he was summarily dismissed for alleged financial misconduct. The tribunal found that the dismissal was procedurally unfair because the respondent held the disciplinary meeting in his absence after he had requested a postponement and raised a grievance.
What went wrong for the employer
The respondent made several procedural errors. First, it pressed ahead with a disciplinary meeting despite the claimant's objection and request for a postponement. Second, it did not arrange an appeal meeting after the claimant appealed. These failures meant the dismissal fell outside the range of reasonable responses for a fair employer. The tribunal also noted that the claimant's status as a co-founder did not deprive him of employment rights – he was a worker and an employee under the oral contract.
Why this matters
This case is a reminder that employment status is determined by the reality of the working relationship, not the job title or shareholding. Co-founders who draw a salary and work under the company's direction may well be employees. For employers, it highlights the importance of following a fair disciplinary process, even when dealing with senior figures. Failing to do so can result in significant compensation awards, as seen here with over £41,000 in damages.
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