The company hoping to drill for gas off the island’s coast has been told to pay its former CEO £131,646.15.
A tribunal ruled that Richard Sargent, who served as CEO until March 2022, suffered unlawful deductions to his pay from Crogga Energy Limited and Crogga Operations Limited.
The dispute revolved around Mr Sargent’s claims of unlawful deduction from wages, including deferred salary, a 15% uplift on deferred payments, and unused holiday pay.
He and the other directors deferred salaries from late 2020 to support the company’s financial struggles, with a promise of repayment plus a 15% uplift when the company’s “next funding round” was completed.
The company contested this claiming he was only due to be paid after funds were raised for a 3D seismic survey, something which Crogga no longer wants.
Rulings
The tribunal, chaired by Felicity Kniveton, determined that Mr Sargent’s deferred salary was tied to the completion of any subsequent funding round, not exclusively to the EQ1 funding round cited by CEL.
Since the 2022 rights issue raised £800,000, the tribunal ruled that Sargent’s deferred salary of £119,800 became due at that time.
However, the panel rejected Sargent’s claim for the 15% uplift, concluding that it did not constitute “wages” under the Employment Act 2006. The uplift was characterized as a compensation mechanism for assisting the company during financial difficulty, not as remuneration for work performed.
Mr Sargent was awarded £10,000 for unused holiday entitlements, with the company criticising the company’s lack of proper record-keeping.
The tribunal also rejected CEL’s claim that Mr Sargent’s employment transferred to COL in January 2021, finding no formal agreement, documentation, or change in his contractual obligations to substantiate this. CEL was deemed his employer throughout his tenure.
In total he was awarded £1,846.15, which equates to an additional one-weeks’ pay, £119,800.00 in deferred salary and £10,000 for unused holiday pay.
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