Adviser loses tribunal case against former employer

Adviser loses tribunal case against former employer

Financial Adviser Peter Connell has lost his claims of unfair dismissal and the right to a statutory redundancy payment against his former employer Aspirations Financial Advice Ltd. 

In a judgement handed down after the three-day video hearing in Exeter, which was presided over by employment judge Alastair Smail, Connell's claims were "dismissed because the Claimant did not have sufficient service to bring them".

According to the 10-page judgement, the tribunal heard Connell had started introducing his clients from his Moneythatworks Ltd advice firm to Aspirations in 2018 as part of an appointed representative arrangement in the lead-up to his retirement.

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After selling his firm to Bristol-based Aspirations in 2019, he was furloughed by Aspirations in 2020 during the pandemic, before the end of his employment in December of that year.

He told the tribunal he had intended to work at Aspirations for at least three years after selling his firm.

Connell claimed continuity of service between February 2010 - when he first started trading as a financial adviser with Moneythatworks Ltd - all the way through to December 2020, which would have entitled him to a redundancy payout and a remedy for unfair dismissal.

But in 2019, Connell had signed a new employment contract, which Aspirations argued broke this continuity of service.

The tribunal agreed, and Judge Smail dismissed the adviser’s claims of unfair dismissal and a statutory redundancy payment. 

The transfer

After Moneythatworks started introducing clients to Aspirations in 2018, Aspirations administered the policies sold to his clients in return for a 40 per cent commission.

The arrangement was that Connell, the principal, would retain 60 per cent of fees and/or commission. 

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

The judgement said Connell, who hoped to work there for “something like three years” before retiring, was given a new contract of employment paying him a fixed £73,000 a year. 

“He would be employed on a new contract with wider obligations to clients that he had not introduced,” the judgement stated.

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

“Having sold his clients, it was not technically right for him [Connell] to call them his clients, although of course he still had introduced them.”

Understanding the contract

The tribunal ruled that a separate employment contract was signed, and that his old employment contract was resigned - though there was some dispute about it parts of it, such as continuity of service, being carried over.

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