Employer

A councilor loses his lawsuit against his former employer

Financial adviser Peter Connell has lost his unfair dismissal claims and right to statutory severance pay against his former employer Aspirations Financial Advice Ltd.

After selling his business to Bristol-based Aspirations in 2019, he was made redundant by Aspirations in 2020 during the pandemic, before his employment ended in December of that year.

He told the court that he intended to work at Aspirations for at least three years after selling his business.

Connell claimed continuity of service between February 2010 – when he started working as a financial adviser with Moneythatworks Ltd – until December 2020, which would have entitled him to severance pay and a dismissal remedy abusive.

But by 2019, Connell had signed a new employment contract, which Aspirations said broke that continuity of service.

The court agreed and Judge Smail dismissed the counselor’s claims of wrongful termination and statutory severance pay.

The transfer

After Moneythatworks began introducing Aspirations to its clients in 2018, Aspirations administered the policies sold to its clients in return for a 40% commission.

The arrangement was that Connell, the principal, would retain 60% of the fees and/or commissions.

Around June 2019, Connell became a direct employee of Aspirations and sold his shares in Moneythatworks, along with his client interests, to Aspirations for up to £240,000 depending on recurring gross income paid.

The judgment said Connell, who had hoped to work there for ‘something like three years’ before retiring, was given a new employment contract paying him a fixed £73,000 a year.

“He would be employed on a new contract with broader obligations to customers he had not introduced,” the judgment reads.

“The compensation terms, in fact all the terms, were very different from those contained in the unwritten contract he had with Moneythatworks.

“Having sold his clients, it wasn’t technically good for him [Connell] to call them his clients, even though he had of course still introduced them.

Understand the contract

The court ruled that a separate employment contract had been signed and his former employment contract had been resigned – although there was a dispute over this, some parts of it, such as the continuity of the service, being postponed.

This separate contract, the court ruled, meant that Connell could not claim continuity of service from February 2010, but rather from June 2019, when the new contract was signed.