ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00008136

Parties:

Complaints:

Date of Adjudication Hearing: 6th December 2017 – 6th February 2018 - 10/04/2018

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 8 of the Unfair Dismissals Acts, 1977 - 2015,and following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

BACKGROUND.

The Complainant was employed as Joint Chief Executive Officer with the Respondent Company from 1st January 2015 until the employment terminated by reason of redundancy on 15th March 2017. The Complainant was paid €6667.00 gross per month. He referred a complaint to the Workplace Relations Commission on 12th April 2017 alleging he had been unfairly dismissed by reason of unfair selection for redundancy and a second complaint that he had not been provided with a written statement of Terms and Conditions of Employment in breach of Section 3 of the Terms of Employment (Information) Act, 1994.

SUMMARY OF RESPONDENT’S POSITION.

The Respondent Company was incorporated in late 2014. The Complainant is a founder and 30% shareholder in the Company. He is also a Director of the Company. There were four employees in the Company – the Complainant and another named joint CEO – the named Chief Finance Officer and the named Finance and Risk Manager who joined the Company on 1st April 2016. The remaining three individuals are the only employees employed by the Respondent. From early 2015 until February 2017 the Respondent operated with both the Complainant and another named employee acting as Joint CEO’s. On 23rd November 2016, a meeting of the Board of Directors took place where the Chief Finance Officer and the Chairman, named, highlighted that the company was falling short in key identified areas and that the existing roles and lines of authority of the Joint CEO’s were blurred and the structure was not assisting the company. The Board of Directors, including the Complainant agreed unanimously that an independent HR Consultant/Strategist should be brought in to review the existing structure and make recommendations on roles and responsibilities. The minutes record the Complainant, as Director agreeing with this. The minutes of this meeting were circulated on 12th December 2016 and the Complainant raised issues only in relation to his remuneration. Copy provided. There was a further Board Meeting held on 15th December 2016 at which all, including the Complainant, confirmed that the Joint CEO structure was not working and an independent HR Specialist was to be appointed. The Chairman proposed that the two CEO’s should be invited to apply for the CEO Position. The Complainant at this meeting canvassed that the possibility of appointing an outside third party candidate as CEO should be considered this was not agreed. By email dated 16th December 2016 the Complainant sought clarification regarding the interview and assessment process and whether or not this was limited to the position of CEO. This was clarified by the Chair and the Complainant in an email of 17th December 2016 thanked the Chairman for the clarification. On 9th January 2017 the Chairman circulated all the Directors of the Terms of reference and the internally developed job description for the position of CEO. The Complainant in an email dated 10th January 2017 stated he was not in agreement with the process and that he could not engage in the process and had decided not to participate in the process of selection. He also stated that he looked forward to supporting the CEO to be appointed going forward. The Chairman asked the Complainant to reconsider his position in the selection process which would remain open until 3rd February 2017. The Chairman added as follows “At the end of the process a single CEO will be appointed. By definition the joint role will become redundant…….the new CEO in consultation with the board will endeavour to find a suitable executive role within the company for the unsuccessful candidate. However there is no guarantee that such a position will be available….”

On 23rd January 2017 there was a heated discussion between the Complainant and the other Joint CEO and the Chief Financial Officer with the Complainant asking the other Joint CEO if she was successful would she like him on the team. The Joint CEO informed the Chairman of this by email. There was an exchange of emails between the Complainant and the Chairman on 8th February 2017.

The Interview process proceeded. The Complainant refused to participate and the named CEO was appointed on 8th February 2017.

The Complainant was informed by letter dated 12th February 2017 confirming the Company’s intention to explore the possibility of creating a role for the Complainant. He was also requested to set out specifically what contributions he believed he had made to the business prior to his review meeting. There were two review meetings on 20th and 23rd February 2017 at which the Complainant’s competencies were fully considered and the Respondent took professional advice from a HR Specialist and a Solicitor, also taking into account that he was a current shareholder and Director of the Company. The newly appointed CEO decided that it was not possible to create a role for the Complainant and he was informed of his redundancy on 15th March 2017 and this was confirmed by letter dated 16th March 2017. The Complainant was therefore dismissed by reason of redundancy and they referenced Sections 7(2) of the Redundancy Payments Act, 1967 (as amended) and 6(4)(c) of the Unfair Dismissals Act, 1977.

The Respondent also confirmed that the Complainant had not been replaced in the Company.

Direct Evidence of External HR Specialist. Named.

This witness confirmed that she had 30 years HR experience. She received a phone call from the Chairman of the Company in November/December 2016 in relation to conducting a selection process for the appointment of a Chief Executive Officer from the current Joint CEO employees. She was provided with the internally developed CEO Job Description. Following discussions it was agreed there would be a 2 hour meeting with each of the two candidates with her to be followed by a further Interview between her and the Chairman with each candidate. She stated that it was agreed that the Chairman would issue an email to the two candidates and this was done on 9th January 2017. The Complainant indicated he did not wish to participate and it was agreed to proceed with the 2 hour Interview with the other named CEO. There was no second interview conducted and she reported the outcome to the Chairman. She stated she had no further role in the selection process. There were no questions to the HR Specialist from the Complainant therefore there was no cross examination of this witness.

Direct Evidence of the named Chairman.

This was a start up Company with the Complainant and the current CEO being Joint CEO’s at the time. He referenced the minutes of the Board Meeting of November 2016 at which he outlined his view in relation to the Joint CEO Structure and sought the approval of the Board to bring in an independent HR/Strategist to review the existing structures and make recommendations on roles and responsibilities going forward. The Complainant agreed. The Chief Financial Officer who acted as Company Secretary issued an email to the Chair and the two Joint CEO’s outlining follow up from the Board meeting of 23rd November 2016. The Complainant responded to all three Board members by email on 12th December 2016. He did not raise any objection in this email to the decision of the Board on 23rd November 2016 in relation to the Joint CEO position. Instead he raised a question in relation to a sum of £19,165 owing by the Complainant to the business.

There was a further Board Meeting on 15th December 2016 to clarify the “Organisational Structure and the appointment of a single CEO following a meeting with the Complainant”. The Minutes of this Board Meeting record the Complainant agreeing the current Joint CEO structure was not working and that an independent HR Specialist would be appointed. A vote was taken and the minutes of this meeting were provided. The Complainant sent an email to the Chairman at 07.52 on 16th December 2016 seeking clarification and the Chairman responded on 17th December 2016 where he set out the decision of the Board in a lengthy email. The Chairman emailed both candidates on 9th January 2017 in relation to the selection process agreed with the HR Specialist. The Complainant in an email dated 10th January 2017 withdrew from the process . He received an email from the Chairman dated 19th January 2017 asking him to reconsider and that the process would remain open until 3rd February 2017.

The other Joint CEO filed a meeting note she had with the Complainant on 23rd January 2017 in relation to the Chairman’s email of 9th January 2017. He had called the meeting and this note records that the Complainant asked the other Joint CEO that if she was appointed CEO would she want him on the team.

The Chairman wrote to the Complainant on 12th February 2017 seeking an apology from the Complainant in relation to the meeting he called with the other Joint CEO on 23rd January 2017.

There was an Appraisal Meeting with the Complainant on 20th February 2017 at which the Complainant proposed Go-Forward Responsibilities in relation to a number of identified areas. It was agreed to reconvene again. There was a further Appraisal Meeting with the Complainant on 23rd February 2017.

The Complainant was informed by letter dated 22nd February 2017 there was no role defined for him as the process was ongoing.

The Complainant was informed by letter dated 15th March 2017 that they had reviewed the Company Structures and that his role was to be made redundant effective from the 15/3/2017 and stating his statutory redundancy entitlements and one month notice period.

The Complainant and his Legal Representative cross examined the Chairman. They referenced the meeting held on 15th March 2017 at which they read a letter to the Complainant but refused to give the letter on the day. There was no written notification of the purpose of this meeting. He was not afforded representation and he was not afforded an appeal of his redundancy. They alleged there were two versions of the letter dated 15th March 2017, one of 15th March and a second of 16th March 2017. They asserted that the Document forwarded to the Complainant on 22nd February 2017 concerning Roles and Responsibilities for the Complainant for 2017 was prepared by the newly appointed CEO . The Chairman reviewed the Document

The Complainant stated that he had raised issues at the Board Meeting of 23rd November 2016 when his preferred option would be to open the position of CEO open to an external candidate. He referenced the email from the Chairman of 19th January 2017 where redundancy of the unsuccessful candidate was first raised. It also noted that post the appointment of the CEO the Board would endeavour to find a suitable executive role within the Company for the unsuccessful candidate but there would be no guarantee that a position would be available.

The Complainant also queried the reference in the letter dated 12th February 2017 to the Complainant in which it stated “it had been our intention to create a role for you (the Complainant)” and he referenced the section of this letter where it referenced him, the Complainant, taking full responsibility for his conversation with the other joint CEO on 23rd January 2017, would be unable to move forward. The Complainant stated that he had in fact apologised to all in relation to the incident of 23rd January 2017.

The Complainant also queried a gap in Business and Banks as a result of which the Respondent Company was created. He referred to the email of 22nd February 2017 from the Chairman which clearly states “once everyone’s Roles and Responsibilities have been accepted, the company will be issuing new Employment Contracts”. He was not offered a role despite this.

Direct evidence of the Chief Executive Officer – named.

The CEO stated that she had met the Complainant when she worked in Barclays – had met the Chairman at College and the Chief Financial Officer at Anglo. She stated that in August 20214 the Complainant sought her advice in relation to the gap between Business and the Banks as a result of which the Respondent Company was created. The question arose as to how to raise equity and they met the Chairman. They saw a market opportunity for the Chairman to invest in the Company and she became Equity Investor in the Company. The Company was created in 2014 and she was appointed Joint CEO with the Complainant and they were paid 60,000 each.

A decision was made that the Joint CEO position was not working. In November 2016 she was advised of the CEO position from the Chairman in an email to herself and the Complainant outlining the process. She was interviewed being a competency based interview. She was aware the Complainant had taken a decision not to participate. She was aware the Complainant was requested to participate by the Chairman and she also stated that this email of 19th January was clear the joint role would become redundant.

She stated there was a heated discussion with the Complainant on 23rd January 2017 and that the Complainant apologised later at a further meeting. She had made a note of her meeting with the Complainant on 23rd January 2013.

She stated she was appointed CEO on 8th February 2017. There was a review meeting with the Complainant on 12th February 2017. She referenced the email dated 22nd February 2017 from the Chairman to the Complainant in which he states “we had expected a more comprehensive document from you in advance of specific goals and achievements and relevant examples….no feedback received in some areas”. She stated there was an annual appraisal of all including herself. There was a second meeting with the Complainant at which he was informed that she would have to consider if there was a role for the Complainant going forward and this is recorded in the minutes of the review meeting of 23rd February 2017 at which the Complainant was informed that the CEO had to establish “if there was role for everyone…” The minutes record the Complainant responding aggressively “if there is a role”. The CEO clarified that it was her role to match the requirements of the business with the roles needed and thus the skills required for those roles.

The CEO stated that they had outsourced their Technology and that acquiring new customers was key in the Business Development and that the Complainant had no track record in either of these two areas.

The Complainant and his Legal Representative cross examined the CEO.

The Complainant stated he had not agreed with the process and he had set this out to the Chairman on 10th January 2017. The CEO stated the process had been agreed at the Board Meeting of 23rd November 2016. She confirmed there had been a heated discussion with the Complainant on 23rd January 2017 and that she had made a note of this meeting and that the Complainant had apologised to her following the letter dated 12th February 2017 from the Chairman to the Complainant.

She stated that the Complainant had proposed Go Forward Responsibilities for himself which were across all the business KPI’s.

In relation to the Document of 22nd February 2017 she stated this was in the middle of the appraisal process and there was no offer of a role for the Complainant as she had not completed her appraisal. The Complainant asked why the process was not shared with him. She stated it was her responsibility as the CEO to complete the appraisal.

The Complainant stated that the letter of dismissal does not mention why no job had been created for him

SUMMARY OF COMPLAINANT’S POSITION.

The Complainant stated there were areas of dispute between him and the Respondent and he referenced the Board Meetings of 23rd November 23016 and 15th December 2016 and stated these were not the full records of what had been discussed. He stated that he had submitted comments in July 2017 (after he had been made redundant in March 2017) to the minutes of 23rd November 2016 and 15th December 2016. He stated that he had received the minutes of the meeting of 23rd November 2016 on 5th December 2016 but did not amend until July 2017. He stated that he got the minutes of the meeting of 15th December 2016 on 13th July 2017 and then he sought to amend them. He stated there was a vote of 3 to 1 against to proceed with the appointment of the CEO

The Complainant stated that at the meeting of 15th December 2016 the Chairman indicated that he would not have invested in the Company and stated that the Current CEO was his preferred candidate. He stated that the HR Specialist recruited to conduct the process, together with the Chairman made the decision, not the Board of which he was a member.

The Complainant stated and confirmed his decision not to participate in the selection process.

The Complainant confirmed that he had apologised to the CEO concerning the exchange of 23rd January 2017.

The Complainant stated that he believes he had a job offer on 22nd February 2017 and there was no interaction with the Complainant until 15th March 2017 when he was called to a meeting without prior notice. He also stated there was a change to the letter dated 16th March 2017 he received and the letter dated 15th March 2017 in the Respondent’s submission concerning his redundancy.

The Complainant stated that he had been in receipt of Jobseekers Benefit from the Department of Social Protection until September 2017 when he commenced employment in a named College and Business School where he is paid an hourly rate.

Respondent’s response to the Complainant’s submission.

The Respondent stated these amendments to the minutes of the Board meeting of December 2016 were made by the Complainant after his redundancy in July 2017.

The Respondent also referenced the email dated 22nd February 2017 from the Chairman to the Complainant and stated that the G0 Forward proposals in fact came from the Complainant and this email states “We had expected a more comprehensive document from you…”.

The Respondent also referenced the Appraisal meeting of 23rd February 2017 in which the CEO informed the Complainant she would have to establish if there was a role for everyone to which the Complainant respondent “if there is a role”.

The Respondent explained the slight difference between the letters of 15th March and 16th March 2017 – the letter re the Complainant’s redundancy. The letter of 15th March 2017 had been changed following legal consultation.

The Complainant stated that yes the JOINT CEO position was abolished and that he had been made redundant from this position.

Findings and Conclusions.

On the basis of the evidence, written submission from the Respondent, Direct Evidence and Cross Examination I find as follows –

An issue arose at the Hearing in relation to the Complainant’s employment status, his commencement date, if the issue had been resolved with the Revenue Commissioners, if the Complainant had received a VAT refund and if this money totalling £13,800 had been returned to the Company following Circuit Court proceedings. This question arose at the Hearing arising from an email from the Complainant to the Chairman, the Joint CEO and the Chief Financial Controller dated 12th December 2016 in which he queries the minutes of a Board Meeting November 2016 in which he states “My remuneration for 2015 had been agreed on the basis that I would invoice (The Respondent) for fees in relation to services provided. This enabled me to avail of certain tax reliefs to which I am entitled and which effectively enabled me to considerably reduce my income tax liability…”. I received correspondence from the Respondent’s Solicitor dated 20th April 2018 confirming on the basis of the Respondent’s instructions that the Respondent had ceased to pay the Complainant on a consultancy basis and had been paid on a monthly salary basis effective from 1st January 2016 and that in order to correct his tax treatment for 2015 a supplementary P35 Employee for 2015 had been made and that from a Revenue point of view the matter was now closed.

I do not have any jurisdiction in relation to this matter as this is a matter solely for the Revenue Commissioners. I do not have to make a decision in relation to the commencement date of the employment as the Respondent has confirmed that the Complainant has been in the employment in excess of 12 months required to make a complaint under the Unfair Dismissals Act, 1977.

The evidence from the Minutes of the Board Meeting of 23rd November 2016 and the subsequent Board Meeting of 15th December 2016 was that the Board decided on the necessity for the appointment of a Single CEO for the Company. At this time there were Joint CEO’s, the Complainant being one. It is clear that the Complainant did not make any observations or seek to amend the minutes and this is evidenced from the email from the Complainant dated 12th December 2016 where the only issue he raises is in relation to his employment status and VAT Refund set out above. Both Parties confirmed the Complainant did seek to amend the minutes of the Board Meeting of 15th December 2016 in July 2017 after he had been made redundant in March 2017.

Both Parties confirmed that an External HR Specialist was to be recruited to conduct the selection process and that the agreed process was communicated to both candidates by the Chairman in an email dated 9th January 2017.

The Complainant confirmed his decision not to participate in the selection process. The Selection Process did proceed, the other Joint CEO was interviewed by the HR Specialist, who notified the Chairman of the successful candidate who was appointed CEO on 8th February 2017.

It is clear that the email from the Chairman to the two candidates dated 19th January 2017 sets out that the Joint Role of CEO will become redundant and that after the appointment of the CEO, the new CEO in consultation with the Board will endeavour to find a suitable executive role within the Company for the unsuccessful candidate.

Both Parties confirmed that the Complainant was requested as part of the appraisal review to forward his GO-Forward proposals for 2017 which he did and these were considered as part of the Appraisal Meetings held on 22nd February 2017 and 23rd February 2017. The newly appointed CEO with the Chairman conducted this appraisal. The outcome was communicated to the Complainant at a meeting on 15th March 2017 at which he was informed that following a review of the structures his role as Joint CEO was to be made redundant and that there was no other senior position within the Company.

The Respondent confirmed that the Complainant has not been replaced and that the Company at a senior level comprises the CEO and the Chief Financial Officer and Finance and Risk Manager.

The Complainant did not make any submission to the Hearing or by way of oral submission as to what new role should have been created for him within the Company and neither did he make any argument that he should have replaced any of the other members at a senior level.

Both Parties confirmed that the Complainant was not afforded an appeal of the decision to make him redundant.

DECISION.CA-00010791-001

Section 8 of the Unfair Dismissals Acts, 1977 – 2015 requires that I make a decision in relation to the unfair dismissal claim consisting of a grant of redress in accordance with section 7 of the 1977 Act.

On the basis of the evidence and my findings above and in accordance with Section 8 (1)(c) of the Act, I declare this complaint of Unfair Dismissal by reason of Redundancy is not well founded.

Terms of Employment (Information) Act, 1994.- CA-00010791-002

Both Parties confirmed at the Hearing that the Complainant had not been provided with a written statement of his Terms and Conditions of Employment.

DECISION.

Section 41 of the Workplace Relations Act, 2015 requires me to make a decision in relation to this complaint. In accordance with Section 41(5) of the Workplace Relations Act, 2015 I declare this complaint is well founded. I direct the Respondent to pay the Complainant compensation of £1000.00 within 42 days of the date of this Decision.

Dated:   22nd August 2018

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

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