Mr M Bibby v Clear Cloud Integration Ltd — 2021

The claimant was employed as Managing Director under a contract dated 19 February 2018 that provided for 10% of the current total issued shares in Clear Cloud, subject to signing appropriate shareholder documentation. The tribunal found that this share entitlement was a material part of the bargain and that the claimant accepted the role because of it. The respondent's position was that the clause was incomplete or conditional, and that any share award was being replaced by a different equity arrangement connected with UKFast.

The tribunal held that clause 6 was an agreement in principle that would have required shareholder documentation, but it was not merely an agreement to negotiate. By 30 November 2018 Mr Jones had told the claimant that the respondent could not grant the shares because of complexities arising from the Company I investment. On the tribunal's findings, that meant the respondent indicated it could not comply with clause 6 at all, even if the parties had agreed terms and the claimant had signed documents, and that amounted to a fundamental breach of contract.

The tribunal rejected the respondent's arguments on affirmation, variation and delay. It found the claimant was entitled to consider whether an alternative equity proposal would be acceptable and, in the context of start-up, acquisition and investment negotiations, his delay in resigning did not amount to affirmation. It also found there was no contractual variation because the employment contract required changes to be confirmed in writing, and no written variation was made. The claimant's claim therefore succeeded, and the case was to be listed for remedy.