The Independent has reported testimony in a UK employment tribunal yesterday where a butler and housekeeper are claiming unfair dismissal from their jobs at an Oxfordshire estate where they thought they worked for a man named Kevin Cash. However, there's a twist:
Yesterday, to add confusion to their grievance, an employment tribunal was told that the couple had not been employed by Mr Cash. They were actually working for a trust based in a Caribbean tax haven, and therefore had no valid claim against him, his lawyers claimed.
The mysterious Mr Cash is reputed to be worth £500m, but has never appeared on any rich list. He claims to own no property in the UK apart from a house in London's Regent's Park.
He describes himself as a "consultant" to a family trust based in the Virgin Islands which owns North Aston Hall, the sprawling £16m Oxfordshire estate where the de Sousas were employed. But lawyers representing the couple suggested that this story is a sham, and that Mr Cash is actually a very rich man who funnels his wealth into offshore havens to minimise his tax liabilities.
James Wynne, representing Mr de Sousa, suggested that Mr Cash controlled a variety of companies at "arm's length", and that the company which nominally employed Mr de Sousa was "directed in the same way that he directs all the other companies in his business empire".
He added: "We say it's a sham. Mr Cash did act as if he owned North Aston Hall. He did act as if he was the employer." But David Flood, for Mr Cash, who was not present at the hearing, said: "It appears that the claimant is attempting to use this tribunal as a form of effectively putting [Mr Cash] on trial generally as to his business and financial dealings, and using as justification the claimant's own decision not to accept that he was employed by a company rather than Mr Cash."
As I often note, secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.
Here we have a secrecy jurisdiction structure used to undermine UK employment rights, or so it seems at this stage in the hearing.
And the secrecy is such that the appelants do not even know who their employer is, or its relationship with the person who instructs them.
Of course this opens enormous lines of inquiry for H M Revenue & Customs, but that's not the point here: that point is that secrecy jurisdictions do exactly what I say they do - with harmful consequences. It's yet another reason why they should not be tolerated.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
I too read this story with amazement. But if he was not the employer, how could he have sacked them in the first place?
This could happen using a structure based anywhere. You could quite easily have a UK trust owning a UK company which owns that property. If Mr Cash is not the actually owner then he clearly had no right to fire the staff.
I haven’t seen much info on Mr Cash. Is he a UK national or a resident non-dom?
Presumably there was no Contract of Employment – stating who the employer is. This then opens up other issues which the Tribunal can tackle.
A very wealthy individual may place most of his assets, including his home, into an offshore discretionary trust and simply pay a commercial rent to the trust. He can also receive loans from the trust, tax free, and pay interest back to the trust.
This has significance in the event of divorce or bankruptcy because the individual is living in a rented property with no assets!
If there is no written contract, then how can the trust be the employer? All the arrangements will have been made with Mr Moneybags (Sorry! Couldn’t resist that).
It does not undermine UK employment rights. The rights exist against the person who is, legally, the employer. Mr Cash appears to be arguing that the trust (or, more properly, the trustees of that trust) are the employer, and that the employment rights should therefore be exercised against those trustees. He is not, from what I can see, arguing that the existence of the trust (wherever it is) negates employment rights.
Getting the defendant right is pretty basic stuff.
An individual beneficiary of a trust can of course live in a property owned by a trust-owned offshore company either rent-free (as a taxable benefit to him) or as a tenant paying a commercial arms-length rent (taxable income for the BVI company). He can also live there under a licence to occupy which may well (and often does) require him as licensee to take care of all property-related staff matters and costs, on the basis that expenses such as a housekeeper actually benefit the occupier as opposed to the entity which owns the property and so all responsibilities and costs should be borne by the occupier. In this instance it looks like the occupier is Mr. Cash.
The information reported to date does not allow us to conclude whether the arrangements were properly structured in line with the above, or whether they were “non-structured” with no thought to those sorts of issues. It could be either.
Is he really called “Mr Cash”. Is no satire too satirical for beneficiaries of gargantuan off-shore wealth?