In Person For the v Mr Bassetti (director) — 2022

The claimant said he had been employed by A Idea Limited from 21 August 2020 and had not received wages from November 2020 until his resignation on 19 October 2021. The respondent resisted the claim on the basis that any contract was void for illegality or fraudulent misrepresentation. The tribunal identified the issue as whether the claimant was an employee or worker, whether there was a legally enforceable contract, and if so whether wages were properly payable and unlawfully deducted.

The tribunal found that the claimant and Mr Basetti had decided to form A Idea Limited in 2019, but that the claimant had no right to work until 27 February 2020 and was removed as a director shortly after incorporation. In August 2020 the claimant said he had been given permission to work in shortage occupations and suggested either employment or waiting until his immigration position changed. The tribunal found that the respondent then offered him employment, that an offer was accepted, and that the arrangement was linked to the claimant's plan to use the Imperial College incubator hub. It also found that the salary figure of £24,000 was selected because it would present the claimant as being in credible employment.

The tribunal accepted that money was paid into and withdrawn from the company bank account in a circular pattern. It found that the claimant paid his own money into the business account, that withdrawals recorded in September and October 2020 were used for what the parties treated as salary, and that the money was then paid back into the account. It found no evidence that the claimant carried out work for the respondent after the offer of employment was made and accepted, and rejected his evidence that applications to higher education institutions amounted to work for the respondent. The tribunal also accepted the WhatsApp exchange of 20 November 2020 as genuine and found that the parties had agreed that the respondent should make a furlough application for the claimant, although the claimant was later ineligible because the accountant had not set him up on payroll by the relevant cutoff date.

On legality, the tribunal said the respondent had not shown fraudulent misrepresentation or illegality in the sense argued. However, it found that the contract was a sham within the meaning of Snook v London and West Riding Investments Ltd and Autoclenz v Belcher, because the parties' common intention was that the documents would not create the legal rights and obligations they appeared to create. Applying the reasoning it summarised from Patel v Mirza and Stoffel and Co v Grondona, the tribunal concluded that the claimant was neither an employee nor a worker and that there was no legally enforceable contract between the parties. The claim for unpaid wages was therefore dismissed.