Director and employee wins holiday pay but loses constructive dismissal claim

A resignation that wasn't a dismissal

The claimant, a former director and shareholder of Purple Dog Company.com Ltd, resigned by email in October 2022 after a meeting where he suggested the parties go their separate ways. He later argued that he was constructively dismissed, but the tribunal found that his resignation was voluntary. The employer had not breached the implied term of trust and confidence, and the claimant's decision to set up a competing company without telling the respondent was a significant factor.

Holiday pay success

The claimant succeeded in one area: holiday pay. From 1 May 2022, he was an employee and entitled to paid annual leave. The respondent accepted that no holiday had been taken and that payment was due. The tribunal calculated the sum at £566.49, based on the claimant's monthly salary of £1,000 and the period of employment.

What went wrong for the claimant

The claimant's other claims failed largely because of the facts. He had not been an employee before May 2022, so earlier periods did not count. His claim for notice pay failed because he resigned without giving notice. And his claim for unpaid wages (national minimum wage) failed because the tribunal accepted the respondent's evidence that he worked 12-16 hours per week, not 50, meaning his pay was above the minimum.

Key takeaway

This case shows that a director who is also an employee cannot ignore their own conduct when claiming constructive dismissal. The tribunal will look at the whole picture, including whether the employee's own actions contributed to the breakdown of the relationship. For holiday pay, the key is to establish the correct employment status and keep clear records.