Tribunal to consider ruling as closing statements made in Crogga pay dispute

Founding member Diccen Sargent is claiming he suffered an unlawful deduction of pay

Closing statements in the tribunal between Crogga and one of its founding members have been delivered and a judgement will now be considered.

Diccen Sargent, who left his position as director and chief executive officer in March 2022, is claiming he had an unlawful deduction of pay.

WHAT IS THE DISPUTE ABOUT?

In Autumn 2020 various directors of the energy firm deferred their salaries while the company was in ‘acute financial distress’ leading to an appeal to shareholders to obtain ‘crisis funding’ worth £800,000.

Mr Sargent agreed to postpone his remuneration with the understanding that it would repaid with a 15 percent uplift.

The dispute, between Crogga and the former CEO, stems not from the amount of payment due but rather the timeline in which it was expected to be paid.

Crogga maintains the deferred salary was not due to be paid until funds were raised for a 3D seismic survey.

However Mr Sargent claims payment was promised at the “next funding round” the definition of which has appeared to cause the dispute.

EQ1 and EQ1S are defined as funding schemes to complete the first two phases of the project, which was said to be £12.75 million.  

These two schemes are argued to be the meaning of ‘next funding round’ by Crogga but Mr Sargent says that wasn’t the case.

WHAT HAPPENED TODAY?

Closing statements were delivered today (28 November) by both the claimant (Diccen Sargent) and the respondent (Crogga).

Mr Sargent continued to claim that the “next funding round” related to any raise of funding by Crogga and said counter arguments that the term is “just bad drafting” is a “large leap”.

“If the funding round was EQ1 or EQ1S, why was it not made clear that the deferral of salaries was until that had been completed?

“The completed funding round in June 2022 is what obligates the immediate payment [of deferred salaries],” Christopher Webb - the legal representative of Mr Sargent - told the hearing.

“We must also question the reason why Crogga was attempting to wind itself up after receiving £1 million worth of funding.”

The claimant is asking the tribunal for all owed deferred salary in addition to the 15 percent uplift and on top of both unused holiday pay and legal costs.

Crogga’s legal representative, Keira Gore, closed by arguing that Mr Sargent had a large degree of control over the company’s operations and “implemented a group structure that he is now trying to undermine”.

In its closing statement the energy firm added: “The nature of the next funding round was very clear.  

"It was an equity raise of around £10 million to complete Phase B [3D seismic survey] of the license.  

"That was discussed and formally resolved during a board meeting in October 2020.

“The duty to pay Mr Sargent hasn’t crystallised yet.  

"There is no dispute that he is owed deferred salary but the terms of which he will be paid has not been met.

“Sadly Crogga has never been in a strong enough position to complete Phase B and has had a significant uphill struggle.”

Although the figures are not in dispute the claimant's attempt to collect unused holiday pay was refused by Crogga as it states there are no records to show what holiday was taken.

“Failing to record holiday is a failing on his [Mr Sargent] part.  It’s for him to prove there is outstanding holiday," the legal representative added. 

If the tribunal rules in favour of Mr Sargent Crogga asked that only the deferred salary is awarded and not the 15 percent uplift, nor holiday pay or costs.

WHAT HAPPENS NEXT?

Tribunal Chair Felicity Kniveton indicated a decision is yet to be made adding there is “an awful lot to look at and consider”.

The hearing closed with the chair expressing her thanks to both sides for the information provided throughout the three-day hearing and for their conduct.

A decision and ruling will be made in due course.