29-year employee dismissed without any redundancy process after company sale
A warehouse operative with 29 years' service was found to have been unfairly dismissed after her employer sold the business and mistakenly treated her as an agency worker. The tribunal awarded over £11,000 in compensation.
2 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was employed by the respondent from 4 February 1994 until 4 November 2022.
- The respondent sold its entire share capital on 29 September 2022.
- The claimant's wages were paid by Totec for administrative reasons, but the respondent was her true employer.
- The claimant was dismissed without any warning, consultation, or selection process.
- The respondent believed the claimant was an agency worker and not its employee.
- The claimant was not paid for her final two weeks of work and accrued holiday pay.
Timeline
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Employment started
The claimant began continuous employment with the respondent.
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Written statement of particulars
The claimant received a written statement confirming the respondent as her employer and a start date of 4 February 1994.
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Sale of respondent
The respondent's entire share capital was sold to a company controlled by Matthew Gresty.
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Totec issued P45
Totec issued a P45 to the claimant with a leaving date of 21 October 2022, ceasing payments.
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Email about payroll
Alan Derby asked Matthew Gresty to take over payroll for the claimant; Gresty agreed without challenging her employment status.
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Dismissal
Matthew Gresty dispensed with the claimant's services, believing she was employed by Totec.
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New employment started
The claimant started a new job earning £180 net per week.
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Hearing day 1
First day of the employment tribunal hearing.
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Hearing day 2
Second day of the employment tribunal hearing.
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Judgment issued
Employment Judge Rhodes issued the judgment in favor of the claimant.
The legal issue
The tribunal had to decide whether the claimant was an employee of the respondent or an agency worker, and whether her dismissal was unfair and entitled her to a statutory redundancy payment and unpaid wages.
The outcome
The tribunal found in favour of the claimant on all claims.
- The claimant was unfairly dismissed because the respondent did not follow any redundancy procedure and wrongly believed she was not an employee.
- The claimant was entitled to a statutory redundancy payment of £6,665.
- The claimant was awarded a compensatory award of £2,762.58 for unfair dismissal, reduced by 50% for Polkey (chance of dismissal anyway).
- The claimant was also awarded £1,800 for unauthorised deductions from wages (unpaid final weeks and holiday pay).
Lessons & takeaways
- Employers must carry out a proper redundancy process, including consultation and fair selection, even if they believe the employee is not their own staff.
- Length of service is a key factor in unfair dismissal claims — 29 years' service means a very high standard of procedural fairness is expected.
- Failing to pay final wages and accrued holiday pay can lead to separate claims for unauthorised deductions, which tribunals take seriously.
- A Polkey reduction can be applied if the tribunal thinks there was a chance the employee would have been dismissed anyway, even with a fair process.
A redundancy dismissal without any process
This case shows what can happen when an employer gets the employment status of a long-serving worker wrong. The claimant had worked for Valves and Engineered Products Limited for nearly 29 years. After the company was sold, the new owner mistakenly believed she was an agency worker employed by Totec, a payroll company. She was dismissed without any warning, consultation, or selection process — and was not even paid for her final two weeks of work or accrued holiday pay.
The tribunal found that the claimant was clearly an employee of the respondent. The written statement of particulars from 2018 confirmed this, and the respondent had paid her wages for years. The new owner's misunderstanding did not change the legal reality. By dismissing her without any process, the respondent acted outside the range of reasonable responses, making the dismissal unfair.
What the employer could have done differently
The respondent could have avoided this outcome by checking the claimant's employment status before taking any action. A simple review of her contract and payroll history would have shown she was an employee. If a redundancy situation genuinely existed, the employer should have consulted with her, considered alternatives, and applied a fair selection criteria. Instead, the tribunal found there was no genuine redundancy situation at all — the dismissal was based on a mistaken belief.
The tribunal also applied a 50% Polkey reduction, meaning there was a chance the claimant would have been dismissed anyway if a fair process had been followed. This reduced the compensatory award but still left the claimant with a significant total of over £11,000.
Why this matters for similar claims
For employees with long service, this case is a reminder that employers cannot simply assume someone is not their employee because of payroll arrangements. The true employer is the one who controls the work and pays the wages. For employers, it highlights the importance of getting employment status right and following a proper redundancy procedure — even in the chaos of a business sale. Failing to do so can result in substantial compensation awards.
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