Employment Tribunal Grants Claimant’s Application to Add Second and Third Respondents

OUTCOME: Allowed

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 1 of 19 September 2023

EMPLOYMENT TRIBUNALS

Claimants:

[redacted]

Respondents: [redacted]

[NAME_2] (2)

[COMPANY_3] (3)

PRELIMINARY HEARING IN PUBLIC

Heard at: London Central (by [NAME_5])

On: 11 & 12 September 2025

Before: Employment Judge Emery

Appearances For the claimants:

[redacted] For the first respondent

[NAME_7] (company director) For prospective respondents 2 & 3: [NAME_8] (counsel) For [NAME_9]: No appearance

PRELIMINARY HEARING JUDGMENT

1. The second and third respondents are added as parties to this claim

2. [NAME_9] is not added as a party to this claim

3. The first respondent’s response to the claims is not struck out; the first respondent’s application to amend its defence is rejected.

The Issues

1. This is a hearing which commenced in May 2025 and was adjourned as part heard. It is listed to determine the following issues:

1.1 The claimants’ application to add as parties [NAME_2] (prospective second respondent), [COMPANY_3] (prospective third respondent) and [COMPANY_10] (prospective fourth respondent).

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 2 of 19 September 2023

1.2 Whether the first respondent’s response to the claims should be struck out under Employment Tribunal Rule 38(1)(d) because it has not been actively pursued; and if that response is not struck out, whether the first respondent should be allowed to amend its defence to the claim.

2. The hearing was also listed to determine the claimant’s status: whether they are employees or workers (as they assert) or self-employed (as the respondent asserts). It was not possible to determine this application, which has been further adjourned to 11 and 12 December 2025.

3. Throughout the September hearing, there was a lot of evidence on whether the second and/or the third respondents had significant influence over the business and over the claimants; this was evidence to determine whether any of the prospective respondents should be joined as parties. It is also evidence potentially relevant to the issue of the claimants’ status. Because of the substantial cross-over of evidence, and the risk of giving evidence on the same issues in front of different tribunals, I consider that it is in the interests of justice for me to conduct the hearing on the claimant’s status.

4. For the rest of this judgment unless otherwise indicated, I use the words “the respondents” to refer to the first, second and third respondents, not [NAME_9].

The evidence

5. On the application to add the respondents and prospective fourth respondent, each of the claimants provided witness statements and were cross-examined. The second respondent provided two statements for himself and the third respondent. [NAME_7], who is the second respondent’s son in law, the sole owner/director of the first respondent, and who works for the third respondent provided a witness statement. Both the respondent’s witnesses were cross-examined. [NAME_9] did not attend or give any reasons for non-attendance.

6. There was a (far too large) bundle of 2224 pages. An additional bundle was provided by the claimants on day 2, to no objection from the respondents.

Relevant procedural history

7. The respondents' position is that the tribunal has no jurisdiction to add the prospective respondents. There were 10 respondents listed on the ET1, including the current respondent and all the prospective respondents at this hearing.

8. All bar the first respondent were dismissed from the proceedings at the first case management conference on 9 January 2024. The Order says that all the Orders were “uncontentious and effectively made by consent” (2210). The respondents' case is that 9 respondents were dismissed from the proceedings because “it was determined that they are not relevant” to the claim.

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 3 of 19 September 2023

9. The claimants argue that they were not legally represented at that hearing, and they were effectively hoodwinked into not opposing that decision. They now say that the Order was made based on falsehoods.

10. On the evening of the first case management hearing the [NAME_11] applied to add back [NAME_9] as a party. the application states that the first respondent was “nominated” by the respondent’s barrister “as the correct respondent” and it was “agreed” that the other respondents could be discharged. But, on legal advice, the claimants are concerned that payments had been made to them by the first and prospective fourth respondents, and that the [NAME_4] were “owned and operated though a complicated structure of companies.” It says that the first respondents accounts are overdue there is “uncertainty about the reliability and legitimacy” of the first respondent.

11. On 12 May 2025 the claimants applied to add the second respondent back as a party. They say that the respondents argue that [NAME_9] is no longer involved, but there is no evidence that the first respondent is the relevant contracting party; they argue that the relevant contracting party is the second respondent, as he has the “requisite control” of the claimants (75). The second respondent argues in his solicitor’s response that the case law points to significant obstacles to vary a case management order; that there is no evidence the second respondent was the relevant contracting party; the application is an attempt to revisit a concluded issue, causing the second respondent hardship and prejudice.

12. On 27 May 2025, the day before the preliminary hearing, the claimants applied to add the third respondent as a party. The reason was, again, “the complexity” if the ownership model. They say that the second respondent’s objection “further obscures” the reality of the relationship, and investigation has found that the third respondent acquired the [Soho] [NAME_4] in 2018 and has been SEV licence and premises holder since 2019. The claimants say that the respondents have “coordinated” to put liability onto the first respondent, a company which is now facing liquidation.

13. I determined the issue of joinder having regard to the procedural history, and having heard the evidence set out below.

The relevant facts

The Corporate chronology

14. There is a complex history of the corporate structure of the [NAME_4]. During much of the claimants’ engagement there were three [NAME_4]; the [NAME_4] which has now shut; for much of the relevant period the claimants worked at the Euston and latterly the [NAME_4].

15. The corporate structure during the material period was follows: a holding company which held the property lease, and which held the [NAME_4]: 2223816/2024 and 2223821/2024

PHCM Order 4 of 19 September 2023

Entertainment Venue licence (SEVL) and the Premises Licence. The holding company would sub-lease the property under a Tenancy at Will to an operating company which ran the [NAME_4] and paid rent to the holding company.

16. [COMPANY_12] was the holding company from 2013 and operated the [NAME_4], and also on occasion paid the claimants; the second respondent accepted that he was a shareholder /director of this company. The company with significant control over Devine Restaurants was [COMPANY_26], whose sole director and shareholder was the second respondent.

17. In 2016 [COMPANY_12] become the holding company for the [NAME_4]. The SEVL was transferred to [COMPANY_12] on 1 December 2016.

18. In 2019 the third respondent became the Holding Company for the [NAME_4]. At that time, the person with significant control and sole director was the second respondent. The SEVL transferred to the third respondent on 3 January 2019 where it has remained to date. At the same time the second respondent says that operations transferred to [COMPANY_12] (paragraph 6 witness statement); this company was dissolved in June 2019. It is unclear on the evidence which business took over the [NAME_4] at this date.

19. The second respondent's case is that he stepped away from the [NAME_4] during the covid pandemic. His evidence was that although there was no formal transfer, [COMPANY_13] took over the operation of the [NAME_4] at this time. [COMPANY_13]’s sole director is [NAME_7]; its sole shareholder on incorporation was the second respondent’s partner. However, there is no reference to [COMPANY_13] having any involvement in the [NAME_4], apart from paying the claimants in 2022.

20. In February 2021, ownership of the third respondent transferred from the second respondent to [NAME_14]; [NAME_14] became the sole shareholder, and [NAME_16] became a co-director. [NAME_14] ceased to be a shareholder in February 2023, significant control over the third respondent transferred to [NAME_16].

21. The respondents say that [COMPANY_13] ceased to be the operating company for the [NAME_4]; the date this happened is not clear from any documents. The pay records show that [COMPANY_13] were paying the claimants until November 2022 (1138).

22. On 30 June 2021 [NAME_9] was incorporated. Its sole director/shareholder was [NAME_16]. On 1 January 2022 the third and [NAME_9] entered into a tenancy at will for the [NAME_4] premises.

23. The second respondent’s evidence at the hearing was that [NAME_9] took over the operations of the [NAME_4] in June 2021; however, there is a gap in documentation given the date of incorporation and the date of the tenancy. Also, the evidence suggests that [NAME_9] did not start paying the claimants until November 2022 (1639). The

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 5 of 19 September 2023

second respondent accepted that he “gets confused”; that the date of [NAME_9]’s first payment to the claimants is the date [NAME_9] took over, that [NAME_13] ceased to operate this [NAME_4] from this date.

24. The respondents say that the first respondent took operational control of the [NAME_4] around February 2024, evidenced by a tenancy at will between the third and first respondents (490).

25. A few weeks later, on 20 February 2024, an email expressed to be from [NAME_7] “[COMPANY_10]” was sent to staff (not including the claimants) at the [NAME_4] informing them of a forthcoming TUPE transfer from [NAME_9] to the first respondent (2121). The claimants do not accept that a valid TUPE transfer took place at this time, this being the only document provided to evidence this.

26. On 29 May 2025 [NAME_16] ceased to be a director and shareholder of the third respondent and the second respondent regained control of this company.

27. The second respondent’s witness statement sets out the reason for [NAME_14] and [NAME_16]’s temporary ownership of the third respondent: [redacted] owned were indebted to a company owned by [NAME_14]; [NAME_16] worked for [NAME_14]. The change in ownership was a guarantee/collateral for the loans. Once repaid, the third respondent’s ownership transferred back to the second respondent.

28. [NAME_17] records show that [NAME_16] became a director and/or shareholder of another of the second respondent’s companies and two companies owned by [NAME_7] during the same period.

29. The respondents case is that the third respondent took back control and became the holding company and operating company of the [NAME_4], the respondents say from 17 March 2025. The second respondent's evidence is that since that date he has again become heavily involved in the [NAME_4]’ operations.

30. In his evidence, the second respondent put the interrelationship between the holding and operating companies like this: the operating company “will get profits and pay the profit to the holding company. [The operating company’s licence] is the right to occupy for a limited period of time”; he said that “my modus is to rent and take the profit.”

Evidence of operational control

31. The respondents’ case the second respondent was owner of the holding company and was heavily involved in the [NAME_4] up to 2021, but he was never the contracting party with the claimants. They say that in mid-2021 he stepped back from the [NAME_4]’ operations; the [NAME_4] were for a significant period licenced to and operated by third-party companies including [NAME_9] and its owner [NAME_19], and by the first respondent under the control of [NAME_7].

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 6 of 19 September 2023

32. The claimants’ case is that notwithstanding the various legal business which over time leased the premises and operated the [NAME_4], the second respondent was at all times the SEVL and Premises [NAME_4], he ran the business, the [NAME_4] reported to him, he oversaw and enforced the Rules, he was the controlling influence over their terms of engagement. They say that the second respondent directed them, set their rate of pay; he was the “relevant contracting party” throughout the time they worked at the [NAME_4]. In his evidence, the second respondent accepted that the SEVL holder is required to set up a Code of Conduct for performers, that the standard conditions on the SEVL includes obligations between the [NAME_4] and performers. There was an obligation for either the [NAME_4] or a named responsible person to be present during performances; that it was for the [NAME_4] to set up a Code of Conduct setting out the rules and obligations between the [NAME_4] and performers. He accepted that this meant that there were ‘obligations’ between the third respondent and the performers from 2019 throughout their engagements.

34. The second respondent disputed that this meant he or the third respondent had control over the businesses as a consequence of the SEVL. He accepted that the requirements of the SEVL meant that its holder was required to have strict policies relating to performers, “breach of which will be treated very seriously”, that there are “regular meetings with the performers to ensure our rules are being complied with ... and all policies are followed”, that all performers are “required to sign an agreement with us setting out our strict rules ... " (the second respondent’s witness statement to the council seeking a premises licence and transfer of the SEVL to [COMPANY_12] (111-117).

35. The claimants point to a further witness statement dated 5 April 2019 in legal proceedings as evidence of the type of control the second respondent had in the [NAME_4]. The second respondent described himself as the “owner and operator” of the [NAME_4]; that he took compliance “very seriously” having “comprehensive and robust” procedures to ensure performer’s welfare and ensure licence compliance. The second respondent denies that this meant he in some way controlled the [NAME_4]’ day to day operations; he says that he was acting as representative of the third respondent.

36. In his evidence the second respondent accepted that until early 2020 he would involve himself in operational issues including holding meetings with the dancers to inform them of any new rules. He said that he was “very engaged” with day- to-day operations until [COMPANY_13] took over the operations.

37. The respondents say that after he stepped down from day-to-day operational control in early 2020, [COMPANY_13] ([NAME_7]), [NAME_7] [COMPANY_13] ([NAME_20]), [NAME_7] the first respondent ([NAME_7]) had operational control over the [NAME_4].

38. The claimants say that the second respondent’s operational role continued during and after the covid pandemic. Claimant A gave detailed evidence of her

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 7 of 19 September 2023

discussions with the second respondent during periods in 2020/21 when the [NAME_4] was able to reopen. Her evidence was that the second respondent was finding “innovative” ways to keep the [NAME_4] open, including running burlesque and fire eating shows. She says she was asked to work by [NAME_21] doing promotional work; the texts to her said “[NAME_2] asked me to ask you”. She says that she chatted to the second respondent about this work, and about the plans for the [NAME_4].

39. The claimants accept that the from 2021 onwards second respondent was less present in the [NAME_4], being involved in opening a restaurant after that premises had a [NAME_4] licence rejected. They argue that throughout their engagements the second respondent was the controlling influence. As said by Claimant A, he “was always my boss. I was never told of any changes or a different owner.”

40. Claimant B did not work and was not paid during the pandemic. When she restarted work in March 2022, she says that she was not aware that the fourth respondent started operating the business “As far as I was aware when contacted by [the [NAME_4] Manager], [NAME_21], to go back, that [the second respondent] is the owner. She told me that [NAME_2] is going to reopen the [NAME_4] and do I want to go back.

41. The claimants’ evidence of their relationship with the second respondent was as follows. Throughout the whole of their engagements, all claimants said they “knew” the second respondent “was the boss” (Claimant A’s words) - “I know the boss was [the second respondent], no one told us otherwise.” Claimant A says that she met the second respondent at her audition, he described himself as “the boss”. The second respondent could not recollect what he said when they met; however, he did not deny that he would have made such a comment.

42. The claimants argue that from 2020 onwards to the end of their engagements, the second respondent continued to instruct them on their work, either personally or through the [NAME_4] Manager. The second respondent denied this: he accepted that they are “extensive instructions” on how the claimants should carry out their work, but he said he did not “personally instruct them” - he argued that the third respondent had to specify the rules set by the licence, that he did not personally decide the rules.

43. Claimant A says that the second respondent remained the boss of the business throughout her association with [NAME_4], that when she moved from the Marylebone to the [NAME_4] in 2020, they interacted much more frequently, Claimant A characterising these interactions as her seeking assistance “from the boss”.

44. The respondents characterise these interactions differently, that the second respondent from 2020/21 was not actively involved in the [NAME_4] at this time, but was instead “helping a friend” by passing on messages, rather than resolving any issues.

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 8 of 19 September 2023

45. The claimant’s say that there is documentary evidence of the second respondent being in control of the [NAME_4] in 2024 – i.e. a year before he says he took back operational control. The council’s licencing sub-committee minutes of 5 March 2025 say that in his evidence the second respondent mentioned an incident in March 2024, how he addressed a customer complaint about overcharging, how he “stood his ground”; he addressed how he hired dancers; he addressed how he tried to meet the performers regularly.

46. In his evidence the second respondent denied that his evidence to the council showed his control over performers and payments to them. He said that he “pushed” the [NAME_4]’s operators to make a decision about this complaint, he did not decide it himself, that he “made representations” to the operating company “to make sure” this issue was addressed. He said the third respondent was ultimately responsible for the SEV and Premises licences and so asked for this issue to be dealt with.

47. The claimants argue that control of the SEVL is evidence of control over the [NAME_4]; the second respondent denies this, his evidence was that the companies have been granted successive SEVLs, not him “it's easy to conflate the company and the person”. He accepted that the SEV licence “must be controlled by a fit and proper person, while being held by the company”. He accepted in evidence that he was the fit and proper person with personal responsibility for the licence - his witness statement says differently, paragraph 11 says he did not have personal responsibility for the licence. He argued that all actions were on behalf of the company: for example, if he was to resign from the third respondent, the licence would continue.

48. The second respondent's witness statement says that in any event he did not have responsibility for running the [NAME_4] or managing the performers, this was done by a ‘Designated Premises Supervisor’. He accepted that the DPS was the [NAME_4] manager employed by the operating company; in Soho the DPS was [NAME_21].

49. The claimants dispute that [NAME_7] and [COMPANY_13] took over operational control over the [NAME_4]. A said she was not aware of [NAME_7] having any control over the business. She accepted that he worked in the office during the day but did not accept that he had any control or influence at any time. She said that the second respondent remained the boss and held meetings during that period.

50. Similarly with [NAME_16]. The second respondent’s first statement says that [NAME_16] / the proposed fourth respondent assumed operational control but left the running of the [NAME_4] “entirely” in the hands of [NAME_21].

51. The respondents say that that [NAME_21] would report to and was supervised by [NAME_16] and that evidence to “[NAME_2]” in messages after early 2022 would have been to [NAME_16]. For example, in July 2022 “the meeting will be held by [NAME_2] ... presence is compulsory”. The respondents say that this meeting was run by [NAME_16]. The claimants say that [NAME_16] was not present; A said, “he

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 9 of 19 September 2023

has never been in a meeting with dancers.” They say that the second respondent attended some but not all the dancer’s meetings from 2022 onwards.

52. Another message from the [NAME_18] Mother to dancers dated 30 October 2022 refers to the dancer’s dress code “This is not allowed and this comes from [NAME_2]”; another is a message to C about not being paid on 22 September 2023, the [NAME_18] mother saying “I think [NAME_2] will come into tonight so we will ask him”.

53. The second respondent denied that these and similar messages refer to him, although he accepted that he was going to the [NAME_4] “very occasionally’ during this period. The second respondent said that [NAME_16] would have set rules for dancers, dealt with pay issues, notwithstanding a lack of documentation to show [NAME_9] of [NAME_16]’s involvement in business operations.

54. In his evidence the second respondent also said the following about this period: "I am keeping in contact with [NAME_2] – so I am quite closely involved and meeting him regularly. But day to day operations was left with [NAME_21].”

55. The second respondent also said the following when it was suggested that that all the claimants believed the reference to “[NAME_2]: in messages was to him: “Fundamentally in some ways I was in control at all times”.

56. While the respondents' case is that [NAME_9] took over operational control of the [NAME_4] in in mid-2022, in his evidence the second respondent said that “by 2023”, he had "effectively relinquished control of Soho”. In re-examination he said that by 2022 he was less engaged in the business, but he was more engaged in 2022 than 2023, that he “attempted to be a figurehead” in 2022 but was “very distant from the operation” in 2023.

57. The claimants say that [NAME_16] would pop into the [NAME_4] and say hello, that he was polite, but they had little interaction with him. They say that [NAME_16] never sought to implement any rules, it was never suggested that he was now in control. A says that she was told by [NAME_21] that he was a “silent investor”. They dispute he had any control over the running of the [NAME_4]. They dispute that [NAME_21] was in control of the [NAME_4], A says that he did not issue instructions or appear to take an active interest in their operations. They say that throughout [NAME_9]’s ownership, the second respondent remained in effective control over the operations and remained their and [NAME_21]’s boss.

58. In evidence it emerged that [NAME_16]’s background is in banking. At the date of the hearing, he was aged 77 and according to the respondents in such poor health he was unable to provide a witness statement or give evidence by [NAME_5]. [NAME_16] had no prior involvement in sexual entertainment venues or any similar business.

59. The second respondent accepts that he did some work for the [NAME_4] during this period: “maybe 2-3 occasions I was asked to give a pep talk [to performers] by [NAME_16], and I was happy to do so”. He says that he had known a lot of the [NAME_4]’s personnel for a long time and had been in the business a long time “So I

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 10 of 19 September 2023

have respect in the business. I gave advice .... but I was not instructing or making decisions at this time.

60. The claimants deny that the first respondent and [NAME_7] had any material involvement in the [NAME_4] from early 2024. They accept that the first respondent paid them from March 2024. But they say that there is very little other evidence of operational control: they say that the evidence provided by the respondents to prove the first respondent’s control is not good enough. The documents show only that the first respondent purchased office supplies, chocolate, and cleaning supplies during this period, there is no evidence that it was in control of the [NAME_4].

61. The second respondent’s evidence was that currently [NAME_7] is involved in other projects, but he also continues to work at the [NAME_4] “he does an awful lot of admin and bill paying etc.”. The claimants say that this has been the extent of [NAME_7]'s involvement in the [NAME_4] throughout their engagements.

62. The claimants rely in pay-related issues to show the second respondent’s continued control over the disputed period. There are several WhatsApp messages about pay issues between the claimants and the second respondent. The claimants say these messages speak for themselves; they show the second respondent’s direct involvement in banking and pay issues and senior managerial decisions.

63. The messages include the following:

63.1 [NAME_4] [NAME_22] saying on 22 September 2023 in response to a ‘no money’ message: “I think [NAME_2] will come into tonight so will ask him”. The second respondent denied that this referred to him.

63.2 Following a message from A to the second respondent on 1 February 2024 saying she was now overdrawn and “need my money by tomorrow” the second respondent asks “how much are you owed”; “we only just got account open again, so no promises”; “Will get more money provided they don't close our account again”; we have lots of problems with non-auth transactions. ... It's so frustrating...”; “if it's not there today it will be 1st thing tomorrow”.

63.3 6, 22 & 26 February 2024 - [NAME_21] to C: “I asked [NAME_2] and he said he’ll start making payments tomorrow”; “I spoke to [NAME_2] and he said he made some payments today and yesterday ... he is having problems with his accounts...”; “I wrote to [NAME_2], he said he’d make some payments today.”

63.4 On 4 & 5 March 2024: following further non-payment the second respondent write to A: “... I know you know me. We will get through.”; “Yeah I know trying again tomorrow”; “I will see it go out. Hopefully by lunchtime”; “if [payment] goes ok we will do the next week Wednesday”; “Wish I could do more...”; “Money went out ... ok”; “... let’s see how we do tomorrow”.

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 11 of 19 September 2023

63.5 11 & 15 March 2024: [NAME_21] to C: “I asked [NAME_24] and [NAME_2]...”; “[NAME_2] called me and said that the money ... would be processed today. And money he will try to do the next few weeks .... He was on the phone with the bank, they keep blocking his account...”

64. [NAME_7] denied that the second respondent had access to the accounts during this period – he said he was responsible for paying the claimants. He described his role as Head of Operations for all the businesses. He also denied knowing that the claimants were in contact with the second respondent. He said that they probably contacted the second respondent after he had “ignored” their messages (but there is no evidence of any messages to [NAME_7] from the claimants about pay). He also denied that the second respondent had contacted him about claimant A’s texts “he did not contact me at this time about this issue or these texts”; he said that he and the second respondent “may have spoken once or twice [over this period], and payments may have been brought up, but not the particulars of any payments

65. The claimant’s bank statements show that in February 2024 they were paid sums owning to them by [NAME_9]; in March 2024 they were paid by the first respondent (1155-56). The second respondent’s evidence was that he did not have access to [NAME_9]’s bank account, that [NAME_21]’s messages do not refer to him, that his messages with A was him “trying to reassure A, and not thinking about the way I phrased the messages.” He said that he was “talking rhetorically, not literally” that he was “talking to someone else” to find out about the payments; he said, “this is saying I would have to seek to persuade people”. He accepted he did not say he was not in control of the process. He accepted that he said “we” but said this was in his role as director of the third respondent that he was “making sure the licence stayed intact, so I was involved” (1176-1178).

66. The second respondent says he “has no memory whatsoever” of interacting with [NAME_21] over C’s texts, but that these can’t be a reference to him: “This is not me. [[NAME_21]] did not ask me. She would have asked the other [NAME_2]. She did not ask me categorically.

67. He accepted he was “still involved with [NAME_4]” during this period, but that he “was not in charge or sole charge”, that his involvement was because of his interest in the third respondent, the leasehold company, “and I still cared to a degree”.

68. He denied this is contrary to his first witness statement (paragraph 13) which says that he was not involved in the [NAME_4], saying that his involvement was as director of the third respondent “and my concern about the operation”.

69. The claimants do not accept that he was ‘doing them a favour’. A said she was not told this when she texted him, that he would always ask her “to tell the girls” they would be paid shortly.

70. A says that she was never aware of [NAME_9]; “there were lots of companies being opened and closed, and bank accounts, but we

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 12 of 19 September 2023

were never told that [the second respondent] is not the boss, the communication was with him the same way as always...”.

71. The claimants also point to the second respondent's involvement in disciplinary related issues. One text dated 19 March 2022 from a [NAME_4] manager to performers refers to fines if a shift is cancelled without a valid reason, to dancer's rules; “these are decisions made by [NAME_2] and the management.” In his answer the second respondent denied that this text referred to him - “there's more than one [NAME_2]”.

72. However, at this date, [NAME_9] and [NAME_16] were not, according to the second respondent’s evidence, in operational control of the [NAME_4] – according to his evidence [COMPANY_13] was.

73. There are other similar messages – for example on 31 August 2022 an invitation was sent requiring their “mandatory” attendance for a “meeting with management/[NAME_2]”. The second respondent’s evidence was that he was “invited” to this meeting by [NAME_21], that notwithstanding the meeting was “with” him and management, the invitation “does not say I am holding” the meeting, “just that I will attend.”

74. There are a series of messages between A and the second respondent about conduct at the [NAME_4]. One series, on 17 November 2022 talks about “unacceptable” behaviour by a colleague, and details this conduct, it ends saying that “After the loyalty I have showed to you and the [NAME_4] over may years...” In response it is agreed that he and A will meet up to discuss this issue. Another series of messages on 8 February 2023 talks about how she is being treated differently by a manager – reaching a point where she had to cancel a shift. She asks to talk in person, to which the second respondent says “... I hear you, I will be in tonight.” The second respondent’s evidence was that he assisted with these issues because A “was reaching out as she was distressed ... I am trying to help her out as a friend.”

75. On 4 July 2023 claimant A was suspended from her role for allegedly shouting at a member of the security team. She texted the second respondent with a copy of the suspension text: the second respondent replies saying “Ok hun, I sort it.” Claimant A responds with further complaints about her treatment and about rumours being spread. The second respondent's messages include “Hi Hun, I am working on it.” He says he has seen the cctv. When claimant A is [NAME_7] invited to a meeting, and suggests a decision has been made in advance, the second respondent replies “Nah”. The second respondent's evidence was that he was being “supportive as a friend”, that he did not resolve the issue, that A and [NAME_21] resolved the issue.

76. Another message from claimant A dated 8 March 2024 refers to a “rumour that you may close the [NAME_4] all August for refurbishing.” The second respondent replies “Only a couple weeks if we do. Needs a redecoration!” the second respondent denied that this shows he had control over the [NAME_4] at this time, that he had finished repaying the debt and was “thinking about” the future, he was “thinking out loud” in his response.

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 13 of 19 September 2023

The pay records

77. The respondents' point to the sequence of company restructures and payments to the claimants which show that the claimants were variously engaged or paid by the following companies, which is evidence that they were not controlled by the second or third respondents:

[redacted] shareholder the second respondent’s [NAME_7] partner.

77.2 August 2022: the second respondent and [COMPANY_13];

77.3 November 2022: [COMPANY_13] and [NAME_9];

77.4 December 2022 to May 2023: [NAME_16] (one payment), and [NAME_9];

77.5 3 times in June 2023 and once in July 2023: the third respondent;

77.6 July 2023 – February 2024 – [NAME_9];

77.7 March 2024 to dates of claims: the first respondent.

78. The respondents characterise this as evidence that in from November 2022 to February 2024 the main payee was [NAME_9], and thereafter the first respondent: [redacted] companies were in operational control of the [NAME_4] and the contractual relationship with the claimants.

79. The respondents say that the payments from the third respondent is “stepping in to ensure you are paid”, when other company bank accounts were blocked, that this is not evidence of control.

80. The claimants accept they were paid by different companies at different times, but that this did not change the nature of the relationship, which was always with the second respondent. Claimant A’s evidence was that there were always periods when because of the nature of the business a bank would block the account, that the second respondent would tell her this in messages; that they would often [NAME_7] use a different company to pay them “I did not question this as long as I was paid”.

Application to strike-out R1’s defence

81. [NAME_7]'s evidence was that he did not engage with the tribunal process or attend the last hearing on behalf of the first respondent because of advice he had received from the insolvency practitioner. He says he was not aware he needed to provide evidence or to comply with Orders after his solicitors came off

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 14 of 19 September 2023

the record in May 2025. He accepts that he did not provide a bundle for the May hearing as the Order says, that he did not respond to emails, that he was “advised” not to do so, he was told that “it is a bad idea” to incur costs. He says that he did not realise that he did not have to be represented to participate in the process. He says he did not know he was required to be at the May 2025 hearing. He says he would have received the ET correspondence warning him of the consequence of not participating (30 May email page 86) but not until a later date.

82. He accepts that his solicitors made an application to amend the first respondent’s defence on 7 April 2024 (64) and that when they came off the record they named him and the second respondent as relevant contacts for the first respondent – he denied that this showed the second respondent's involvement in the first respondent.

The relevant legal principles – joinder

83. The Employment Tribunal Procedure Rules 2024: Rule 30 – Case management Orders: (1) ... the Tribunal may, on its own initiative or on the application of a party,

make a case management order. ... (3) A case management order may vary, suspend or set aside an earlier case

management order where that is necessary in the interests of justice, and in

particular where a party affected by the earlier order did not have a reasonable

opportunity to make representations before it was made

84. The Employment Tribunal Procedure Rules 2024: Rule 35 - Addition, substitution and removal of parties

(1) The Tribunal may on its own initiative, or on the application of a party or any other person wishing to become a party, add any person as a party, by way of substitution or otherwise, if it appears that there are issues between that person and any of the existing parties falling within the jurisdiction of the Tribunal which it is in the interests of justice to have determined in the proceedings

(2) The Tribunal may on its own initiative, or on the application of a party, remove any party that appears to have been wrongly included.

85. The Presidential guidance (General Case Management) Guidance Note 1, paragraph 16 states: "These are some of the circumstances which give rise to addition of parties: 16.1 Where the claimant does not know, possibly by reason of a business transfer situation, who is the correct employer to be made respondent to the claim.”

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 15 of 19 September 2023

86. Cocking v Sandhurst (Stationers) Ltd [1974] ICR 650: regard should be had to all the circumstances of the case. It suggested the following test should be followed:

1. Does the claim form (ET1) comply with what is now Rule 10(1); if yes are the claims made in time; if yes

2. The tribunal has the discretion to allow the proposed amendment;

3. In deciding whether to exercise their discretion to allow an amendment, the tribunal should only do so if they are satisfied that the claimants made a genuine mistake, and the amendment does not cause reasonable doubt as to the identity of the respondent.

4. In deciding whether to exercise their discretion to allow an amendment, the tribunal should have regard to all the circumstances of the case. They should consider any injustice or hardship which may be caused to any of the parties, including those proposed to be added, if the proposed amendment were allowed or refused.'

87. British Newspaper Printing Corpn (North) Ltd v Kelly [1989] IRLR 222, CA): Endorsed the injustice/hardship test set out in Cocking; also that, as there are no statutory time limits for applying for leave to amend, tribunals ought not to refuse leave simply on grounds of delay.

88. Gillick v BP Chemicals Ltd [1993] IRLR 437 EAT: Questions of delay are merely matters to be taken into account by the tribunal in the exercise of its discretion. Also, ''The presence or absence of a connection between the respondents may well be relevant in considering whether or not a genuine mistake has been made, and whether the [employment] tribunal should exercise its discretion to allow the mistake to be corrected, but such considerations are relevant, if at all, as matters to be taken into account in exercising the discretion, rather than as limitations on the circumstances in which the discretion can be exercised'.

Relevant legal principles – strike-out of defence

89. The Employment Tribunal Procedure Rules 2024: Rule 38 – Striking out

(1) The Tribunal may, on its own initiative or on the application of a party, strike out all or part of a claim, response or reply on any of the following grounds— .... (d) that it has not been actively pursued.

90. Hasan v Tesco Stores Ltd (2016) UKEAT/0098/16: there is a two-stage approach: (1) it must consider whether a ground for strike out is satisfied; (2) it must consider whether it should exercise its discretion to strike out.

91. [NAME_25] v Commissioner of Police of the Metropolis [1991] ICR 151: Delay which is intentional, disrespectful or abusive; delay that is inordinate and inexcusable

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 16 of 19 September 2023

and which gives rise to a substantial risk that a fair hearing is impossible, or which is likely to cause serious prejudice to the other party.

92. Kaur v Sun Mark Ltd [2023] EAT: In exercising its discretion the Tribunal should assess if strike out is an appropriate and proportionate response consistent with the overriding objective.

Closing arguments

93. All parties made closing arguments; their arguments are addressed below in the Conclusions section.

Conclusions on the evidence and the law

94. The starting point is that the claimants ET1 claim form named all prospective respondents. It was based on representations made by the respondents’ lawyer at that hearing (who was acting on instructions but who was not instructed by all the [NAME_7] respondents) that the prospective respondents were dismissed from the proceedings.

95. The claimant says that the respondents inaccurately represented the position at the January 2025 Case Management Hearing; that on the same day they started the process of correcting that inaccurate representation by making their first application, to reinstate [NAME_9]

96. Based on the evidence I have heard, I agree that the status of the prospective respondents does not appear to have been accurately put at the January 2025 hearing. On the evidence I heard, at that time the status and identity of the contracting party was disputed; it was not accepted that the first respondent was the contracting party and had control over the claimants; it was not clear that the second and third respondents were not involved with the claimants. Based on the evidence I have heard, I find that the respondents gave information to their lawyers which led to inaccurate representations being made at that hearing.

97. I therefore find that the prospective respondents wrongly sought their removal from the proceedings when, on the evidence, the issue of the identity of the correct respondent was an open question.

98. The respondents say that I cannot reopen this issue. I disagree. It is not unusual for a tribunal to have to determine the identity of the correct respondent, which is often an opaque question. Where a party has been removed because of an inaccurate representation, it cannot be the case that there is no way of reinstating that party. The test remains: whether it is in the interests of justice to reinstate that party because there is an issue to be determined.

99. Whether or not the claimants were employed, workers of self-employed is the first main issue to be determined. I conclude that it is critical for determination of that issue that the correct respondents – those who appear to be in control of the business operations (for example the Dancers Rules) - are identified.

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 17 of 19 September 2023

100. Much of the evidence I record above is relevant to the outstanding issue of status. It is not strictly necessary to address that evidence in determining the current application on joinder. However, given the interrelationship between the two issues, I consider it important to record this evidence, to avoid unnecessary duplication and to ensure consistent evidence.

101. I do not accept the second respondent’s account of his involvement in the [NAME_4] post 2022. I accept that he was not actively involved in the day-to-day operations from mid-2022 onwards, spending much time in setting up a restaurant. However, I find that there is evidence that he continued to have overall control over the running of the [NAME_4], on his own behalf and on behalf of the third respondent.

102. The claimants’ case is that the second respondent was “not consistent” in his evidence; that his statements which provide “definitive statements denying involvement” from mid-2021 to March 2025 are inaccurate.

103. I do not accept that the second respondent’s texts to Claimant A were helping a friend: he was actively involved in ensuring the claimants were paid; he engaged with the disciplinary issue; he engaged in wider issues of conduct; he attended meetings at which he restated the Dancers’ Rules. I do not accept the second respondent’s evidence that he was not actively engaged and had no managerial control in all these issues – he clearly did have control, as demonstrated by his clear answers set out above.

104. There is also the evidence of the second respondent's representations at the council licencing committee: these representations suggest that he was holding himself out as having responsibility for the [NAME_4], that he was responsible for ensuring the SEVL licence was complied with, and that he actively engaged in issues of compliance including making managerial decisions – all during the period when his evidence was that he had little or no control over the [NAME_4].

105. I accept that from mid-2022 the second respondent delegated day today management; but he regularly stepped in to get things done (pay, A’s disciplinary, complaints, Rules, other meetings, the licence committee), indicative of his control over the [NAME_4]. The evidence is that he held himself out to the council, and exercised decision-making over operations, in a manner consistent with having responsibility and control over the business operations.

106. I find that the second respondent correctly described the purpose of the operating companies - to make profit for his holding company, the third respondent. This is why the second respondent retained active control of the [NAME_4] throughout the different operating companies, including the first and prospective fourth respondents.

107. I do not accept that the payroll records are evidence of control over the [NAME_4]. The respondents’ witnesses accepted that many of the payments were made because accounts were frozen. While the first and fourth respondents did pay

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 18 of 19 September 2023

the claimants for regular periods, I do not accept that this is definitive evidence of control – particularly in the absence of any other significant evidence that they controlled the [NAME_4], and given the contrary evidence which strongly suggests the second and/or third respondents retained control.

108. I do not accept that [NAME_16] or [NAME_9] ran or involved themselves in the [NAME_4]. I accept that [NAME_16] (and therefore the fourth respondent) was correctly referred to as a sleeping partner. [NAME_16] nor [NAME_9] took part in any managerial activities or assumed control over the [NAME_4]. When [NAME_16] attended, he did not do so as a person in control or a manager. Contrary to what the second respondent says, I find that it was him who participated in managerial decisions, not ‘the other [NAME_2]’. [NAME_9]’s sole role was to recover debt from the [NAME_4]’s profits.

109. I therefore decline to join [NAME_9] as it appears that there is no legal issue between it and the claimants in these proceedings.

110. The status of the first respondent: [redacted] referred to [NAME_7]'s current role with the third respondent as effectively that of a bookkeeper. [NAME_7] says that his role continued when [NAME_9] took over – the evidence showed that he paid invoices during this period.

111. I find that it is highly likely that the first respondent did not have operating control over the companies during the period in which it was the operating company, that [NAME_7] retained his principal role of office-work/manager, and that the second and the third respondents retained overall control over the [NAME_4] during the period of the first respondent’s licence/tenancy at will.

112. It follows that there are issues between the second and third respondents and the claimants. The issues are whether the claimants were workers or employees who were employed by the second and/or third respondents or whether they were self-employed.

113. I find that it is in the interests of justice to have this issue determined. I do not accept that the fact the second and third respondents have previously been dismissed from the proceedings as being a jurisdictional bar to their rejoinder, particularly where their dismissal was based on inaccurate representations.

114. I also considered the balance of hardship. I do not accept the second and third respondents’ submissions that the prejudice lies only with them; I do not accept that the evidence shows that neither has involvement in decision making meaning that their Article 6 rights are affected. I do not accept that adding them as parties will cause them extreme hardship or be counter to the overriding objective. Given they were originally parties to the claim, and given there appear to be issues between them and the claimants, it is not prejudicial for them to be added back in as parties.

115. Instead, I accept that the claimants will face prejudice if the second and third respondents are not added as parties, as the only respondent will be against an

Case Numbers: 2223816/2024 and 2223821/2024

PHCM Order 19 of 19 September 2023

insolvent company in circumstances where the evidence does not point to the first respondent being in operational control over the [NAME_4].

116. I therefore Order that the second and third respondents be rejoined as parties to this claim.

The first respondent

117. I do not dismiss the first respondent from the proceedings – there was no application to do so, and I heard no representations on this issue. Notwithstanding my findings, it is open for the first respondent to continue to defend the claim.

118. I accept that there was a deliberate decision by the first respondent not to participate in the proceedings from April, including failing to attend a hearing he had notice of. I do not accept his explanation that he believed he needed a lawyer to attend. I accept the claimants’ position, that the conduct of the first respondent has “severely disrupted”, “added unnecessary confusion” to the process, and has increased costs.

119. However, it appears that the first respondent was told it was not financially viable for an insolvent company to participate in the process. In addition, the first respondent is now actively participating, having provided a statement and attending this preliminary hearing.

120. I accept that while there are good grounds to strike-out the defence; but I decline to exercise my discretion to do so, on the basis that the first respondent is now actively participating in the proceedings.

121. I conclude that it would not be in the interests of justice to allow the first respondent to submit an amended defence. The first respondent’s application was made in April 2025, and it has not been pursued to date. There is a significant risk that the defence will address issues which have been determined and on which evidence has already been heard, as set out above. The first respondent’s defence asserts a denial that the claimants were workers or employees, it states that they were self-employed. This is the issue to be determined at the next hearing, and if the first respondent continues to participate in this claim it can adduce evidence on this issue.

Approved by: Employment Judge Emery 5 November 2025

Sent to the parties on: 21 November 2025 …………………………….

For the Tribunal Office:

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