Former Gas Exploration Executive Awarded Over £131,000 in Wage Dispute

An employment tribunal has ordered a gas exploration company to pay over £131,000 to a former director, resolving a disagreement concerning unpaid remuneration. Diccen Sargent, who served as chief executive officer of Crogga Limited prior to his departure in 2022, initiated a claim alleging an unlawful deduction of his wages. During 2020, the directors of the company, which holds a licence for gas exploration in Manx waters, reached an agreement to postpone their salaries until the subsequent funding round, citing that “funds were running low” due to the necessity of a seismic survey. The tribunal determined that the issuance of new shares in June 2022, intended to secure capital, qualified as a funding round, and consequently, the deferred amounts ought to have been disbursed at that time. The core of the disagreement between the involved parties revolved around the specific event that would trigger the payment of the deferred funds. Mr. Sargent had held directorships at both Crogga Energy Limited and Crogga Operations Limited, both of which were named as respondents in the legal proceedings. In the autumn of 2020, some employees also consented to defer a portion of their salaries to assist the company, with the understanding that they would receive a 15% uplift upon the salaries’ repayment. Approximately £800,000 was generated in June 2022 through the issuance of new shares to the company’s existing shareholders. Mr. Sargent, having previously received an email indicating that deferred salaries would be disbursed upon “the Crogga Groups next funding round is completed,” anticipated receiving his payment at that juncture. However, the company contended that an October 2020 board meeting had stipulated that salaries would be paid once a funding round designated EQ, aimed at securing £12.75 million for a 3D seismic survey, had concluded. This specific financial target has not yet been attained. Felicity Kniveton, the tribunal’s chairman, determined that the language used in the email referred to the “completion of any funding round.” She stated that since the June 2022 initiative to raise capital via shares could be characterized as a funding round, the deferred salary became payable at that point and ought to be remitted. Her judgment concluded that Crogga Energy Limited was consequently obligated to pay £131,646, a sum that incorporated £10,000 for accrued but untaken holidays, but excluded the 15% uplift, as this was not deemed to be wages. The company received a Seaward Production Innovate License in October 2018. A proposal to amend its licence, which would allow it to bypass the completion of a 3D seismic survey and proceed directly to drilling an appraisal well, is still being reviewed by the Department of Infrastructure.