Parties: Barry Flannery v Xerotech Limited (In Liquidation)
Full Decision
What Happened?
Barry Flannery had been employed with Xerotech as their Chief Executive Officer since October 1st, 2019, earning an annual salary of €200,000. On the 12th of December 2024, the Claimant said he was suddenly faced with very difficult circumstances because of the Respondent’s actions which forced him to resign.
What Was the Dispute?
The Complainant took this up with the Workplace Relations Commission, filing a complaint against the Respondent in correlation with Section 8 of the Unfair Dismissals Act 1977 (the Act), arguing that he was forced to resign.
The Complainant Said:
- The Complainant commenced employment with the Respondent as CEO/CTO on the 1st of October 2019.
- The contract provided for a six months’ notice period.
- On the 4th of December 2024, Mr. Tony McDonald delivered several handwritten instructions throughout the day to restrict the Claimants access to the company’s key software systems.
- Mr. McDonald also ordered via email the disclosure of the Claimants communications, both emails and messages on Microsoft Teams. These were to be made visible to Mr. David Donovick.
- The Complainant claimed that in a reply to this email, Mr. Donovick referred to an allegation of “multiple breaches” and “gross misconduct”, which were never brought up with the Complainant, and no formal procedures were followed in relation to these allegations.
- On December 5th, Mr. McDonald inquired via teams on who had access to a “contracts email”, further so, he asked whether a named individual could be removed from viewing the Complainants emails.
- The Complainants access permissions were set to “At no time”.
- Later that day, all the company directors (except the chairman), resigned following a fundamental governance breakdown. This included the Claimant who resigned from the board but held onto his position as CEO.
- On December 12th, the Complainants solicitors wrote to the Respondent claiming that he had been constructively dismissed.
The Respondents lawyers responded on the 18th of December, denying any suggestion that the Complainant was constructively dismissed, and that he left following a voluntary resignation. - The Complainant stated as these events unfolded, he was never made aware of the supposed allegations made against him, and no fair or formal procedures were followed such as conducting an investigation or being given the chance respond to these claims.
- Due to the actions of the Respondent, the complainant’s position as Chief Executive had been severely compromised as he had been excluded from the company’s operations.
- The Complainant said that because of the Respondents contradiction of his employment contract, he had no choice but to treat the employment relationship as terminated.
Notably, the Respondent did not attend the WRC hearing or provide evidence.
What did the WRC Decide?
The adjudicating officer, Breiffni O’Neill, ruled in favour of the Claimant in accordance with section 7 of the Act. It was accepted that the Claimant was effectively forced to resign. He stated that “No reasonable employee – let alone a senior company officer – could be expected to continue in employment under these circumstances”. The Claimant was awarded a total sum of €420,172.
Key Takeaways:
1. Procedural Fairness is Non-Negotiable
– An employer must have a clear and legitimate reason for terminating employee’s (such as redundancy or finding of gross misconduct).
– Follow a structured process when handling a dismissal that is in check with the companies’ handbook/policies and individual contracts.
– Be open and transparent with your employee during the process.
2. Comply With Contractual Notice Periods
– Refer to an employee’s contract of employment to check how much notice they’re entitled to.
– Clearly communicate with the employee whether they’ll work their notice period or be placed pay in lieu of notice.
– Ensure pay in lieu of notice is provided for in a contract of employment.
– Contractual obligations including notice periods always apply.
3. Consider the Risk of Compensation
– As we’ve seen in this case where the Complainant was awarded over €400,000, employers may be liable to heavy financial penalties for incompetency and mishandling certain situations such as a dismissal process.
