Complainant

Respondent

Parties

Barry  Flannery

Xerotech Limited (In Liquidation)

Representatives

  N/A

N/A

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00068278-001

20/12/2024

The Complainant commenced his employment with the Respondent on 1 October 2019 under a written employment contract appointing him CEO/CTO and earned an annual salary of €200,000. He stated that he was forced to resign on 12 December 2024 due to the Respondent’s actions, including the removal of his system access, interference with his communications and exclusion from his operational role, all of which amounted to a fundamental breach of trust and confidence.

The Complainant commenced his employment with the Respondent on 1 October 2019 under a written employment contract appointing him CEO/CTO. The contract provided for six months’ notice and permitted the company to place him on garden leave, forming the basis of a senior and stable executive role.

In early December 2024, the company’s conduct toward the Complainant changed abruptly and without explanation. On the morning of 4 December 2024 at 10:12, Mr Tony McDonald issued a written instruction to deactivate the Complainant’s access to key systems, including the Engineering SharePoint, the Test Engineering SharePoint and the Wrike project management platform. Two minutes later, at 10:14, a further instruction was issued from Mr McDonald requesting a full list of all systems to which he still had access. These actions were taken without notice, justification or reference to any disciplinary or investigative process.

Later that day, at 16:27, an even more serious instruction was issued. The Complainant’s access was to be disabled entirely following an email instruction by Mr McDonald, and all his sent and received emails were to be made visible exclusively to one individual, Mr David Donovick. The instruction also sought visibility of his Microsoft Teams communications “if possible.” By reply to this email at 16:38, Mr. Donovick referred to an alleged investigation into “multiple breaches” and “gross misconduct,” allegations that were never put to the Complainant or raised with him through any fair or formal procedure.

On 5 December 2024, the Respondent continued to manipulate and interfere with the Complainant’s communications. At 12:27, an internal Teams message from Mr McDonald queried who had access to the “contracts email” and explicitly asked whether a named individual could be removed from seeing the Complainant’s emails. These actions indicated that the Respondent was continuing to adjust and monitor his communication channels without informing him.

The Respondent’s access‑control system later showed the Complainant’s access permissions as set to “At no time,” confirming that the instructions to remove his access had been implemented in full.

On that same date, 5 December 2024, a significant governance rupture occurred. All directors of the company, except the chairman, resigned. The Complainant was one of those resigning directors. His resignation, however, was expressly from his directorship only; he retained his employment as CEO.

In the days that followed, the Complainant’s position was formally set out through his solicitors. On 12 December 2024, his legal representatives wrote to the Respondent, asserting that the Complainant had been constructively dismissed.

The Respondent’s solicitors responded on 18 December 2024. Rather than engage with the substantive concerns or the unilateral actions taken against the Complainant, they denied constructive dismissal and re‑characterised the Complainant’s correspondence of 12 December as a resignation. They purported to place him on garden leave, asserting a termination date of 12 June 2025 based on the contractual six‑month notice provision.

Throughout all of these events, the Complainant was never informed of any misconduct allegations, never provided with particulars of any supposed investigation, never invited to a meeting and never afforded the opportunity to respond. His access was removed, his communications were intercepted, his authority as CEO was undermined and he was effectively excluded from the operation of the company. This combination of actions represented a fundamental breach of trust and confidence.

In these circumstances, the Complainant concluded that the Respondent had repudiated the employment contract, leaving him with no reasonable alternative but to treat the employment relationship as terminated.

The Respondent did not attend the hearing to give evidence in relation to the complaint.

Legal Framework:

Section 1 of the Unfair Dismissals Act 1977 defines “dismissal” to include constructive dismissal, which means:

" the termination by the employee of his contract of employment with his employer, whether prior notice of the termination was or was not given to the employer, in circumstances in which, because of the conduct of the employer, the employee was or would have been entitled, or it was or would have been reasonable for the employee, to terminate the contract of employment without giving prior notice of the termination to the employer."

Two primary tests are recognised by both the Workplace Relations Commission and the Labour Court in assessing constructive dismissal:

1. The contract test, which asks whether the employer’s conduct amounted to a repudiatory breach going to the root of the employment contract; and
2. The reasonableness test, which asks whether the employer’s behaviour was such that it was reasonable for the employee to resign.

In assessing a claim, satisfaction of either limb or a combination of both will suffice.

1. Repudiatory Breach of Contract

A repudiatory breach occurs where the employer’s conduct demonstrates an intention no longer to be bound by essential terms of the contract, particularly those relating to trust, confidence, and the employee’s ability to perform their role.

The evidence in this case demonstrates that the Respondent: • removed the Complainant’s access to all critical operational systems without warning or explanation; • diverted and monitored his email and communications without informing him or providing justification; • excluded him from the business by disabling his physical access rights; and • failed to raise any allegations, conduct any investigation, or follow any procedure whatsoever.

For a CEO, access to business systems, communications and operational functions is fundamental. Removing those rights is equivalent to preventing the employee from carrying out their contractual duties. The unilateral interception and redirection of the Complainant’s communications, without any procedural safeguards or notification, represents a profound breach of trust and confidence.

Taken together, I am satisfied that these actions amount to a complete undermining of the employment relationship. They objectively demonstrate conduct inconsistent with the continuation of the contract and therefore constitute a repudiatory breach.

2. Reasonableness of Resignation

Even where a technical contractual breach may be disputed, constructive dismissal will still arise if the employer’s conduct is such that resignation is the only reasonable response open to the employee.

In this case, the Complainant stated that he was placed in a position where:

• he had been stripped of the tools required to perform his functions; • his communications were being monitored behind his back; • unknown allegations were apparently being discussed internally, yet never put to him; • he had been effectively shut out of his own role; • significant governance instability occurred simultaneously, with all directors except the chairman resigning; and • the Respondent did nothing to reverse or explain its actions.

No reasonable employee — let alone a senior company officer — could be expected to continue in employment under these circumstances. The Complainant was left without clarity, without due process, and without any meaningful means of performing his job. The Respondent’s later attempt to characterise his position as a resignation did nothing to cure the earlier breach and only confirmed the breakdown in trust.

I find that it was therefore objectively reasonable for the Complainant to conclude that the employment relationship had broken down irretrievably and that he had no option but to treat himself as dismissed.

Both the contractual and reasonableness tests for constructive dismissal are therefore met. The Respondent’s conduct constituted a fundamental breach of the employment contract and the circumstances created by the Respondent were such that no reasonable employee could be expected to remain in their role.

Accordingly, the Complainant’s decision to treat his employment as terminated was not only justified but the only reasonable course available to him.

I find that the Complainant was unfairly dismissed by way of constructive dismissal for the reasons set out above.

Section 7 of the Unfair Dismissals Act, in relevant part, states that:

(1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer, considers appropriate having regard to all the circumstances:

(a) re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or

(b) re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or

(c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances,

(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to—

(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,

(b) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employee,

(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,

(d) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved of by the Minister,

(e) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the said section 14,

(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal.

3) In this section—

“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;

“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.

·        The Remedy

As the Respondent is in liquidation, I have decided to make an award of compensation.

·        The Calculation of the Complainant’s “Remuneration”

In assessing the amount of compensation to award, I must firstly calculate the Complainant’s “remuneration” in accordance with the Act.

-        Salary and Ancillary benefits

I note that he earned a base salary of €200,000 per year at the time of his dismissal and that he also benefitted from a company car with a notional annual benefit of €6,750. I also note that the Respondent paid for his health insurance in the amount of €3,336 annually. I find that all of these elements of his package constitute “remuneration” for the purposes of the Act.

Considering all of the foregoing, I find that the basis for the calculation of the award of compensation is a weekly figure of €4,040.12 (€210,086 per annum). The maximum award permissible under the Act is therefore €420,172, namely 104 weeks’ pay.

·        The “Financial Loss” Attributable to The Dismissal

In calculating the “financial loss” attributable to the dismissal, I note that Charleton J in Panisi, in assessing loss, stated as follows: 

My task is to assess the financial damage which the dismissal has brought about and then to place the measure of that damage against the maximum amount of compensation that is available. In the event that the compensation that is available, amounting to 104 weeks remuneration, is less than that sum, then that is the measure of damages. Where the quantum of damage is more, then the jurisdiction is limited to that maximum and the amount of damages must thus be reduced to that maximum sum. Where the measure of damages on dismissal is more than the maximum but contributory fault is found in respect of the dismissal against the employee, the reduction is on the totality of those damages, and not on the maximum award. If the result is to reduce compensation within the maximum award, that sum is appropriate. Where the reduction in total damages for contributory fault puts the damages above the maximum award, then the maximum award is the correct measure of compensation for unfair dismissal.

As set out above, I must therefore next assess the overall “financial loss” attributable to the dismissal. I have calculated this, as set out below; by deciding on what date the Complainant was dismissed in the first instance prior to assessing his “financial loss” both up to and after the WRC hearing.

-        The date of dismissal

Having determined that the Complainant was constructively dismissed on 12 December 2024, it is necessary to establish the legally effective date of dismissal for the purpose of calculating financial loss. Although the Complainant resigned on that date, the Unfair Dismissals Acts treat a successful constructive dismissal claim as a dismissal effected by the employer, not the employee. This distinction is central, because where the employer is deemed to have dismissed the employee, the employer is required to honour any applicable contractual notice period, unless it can demonstrate grounds for summary dismissal. In this case, no such grounds arise.

The Complainant’s contract provides a clear mechanism governing termination. Clause 16.1 states that employment may be terminated by either party only by giving six months’ written notice. Clause 16.2 allows the employer, once notice has been given, either to require the employee to serve the notice period or to pay them in lieu of notice. I find therefore that six months’ notice is an essential part of the employment relationship, and that it is operable regardless of who initiates the termination.

Because the Complainant’s resignation has been found to constitute constructive dismissal, the law treats the resignation as if the employer terminated the contract on 12 December 2024. The employer cannot rely on the summary dismissal clause, as no misconduct on the part of the Complainant has been established. Accordingly, the employer is deemed to owe the Complainant the full contractual notice period of six months from the date of the constructive dismissal.

This means that the effective date on which notice began to run is 12 December 2024, and the notice period expired six months later, on 12 June 2025. It follows that the Complainant did not suffer “financial loss” arising from the dismissal until after the date on which his contractual notice would have expired. For the purpose of calculating compensation, the period of financial loss therefore begins on 12 June 2025.

In conclusion, I find that the constructive dismissal occurred on 12 December 2024 and requires the full contractual notice period to be applied. As a result, the Complainant’s financial loss commences after 12 June 2025, and any award of compensation under the Unfair Dismissals Acts must be assessed from that date forward.

-        The calculation of “financial loss”

In assessing the Complainant’s financial loss, I note that he earned €4,040.12 per week and operated at CEO level within a specialised engineering and technology sector. As set out above, he was constructively dismissed on 12 December 2024, and in accordance with his contractual entitlement to six months’ notice, his “financial loss” begins from 12 June 2025.

1.      Financial loss from the date of dismissal to the WRC hearing; 12 June 2025 to 13 February 2026

Between the expiry of the six‑month notice period (12 June 2025) and the date of hearing (13 February 2026), the Complainant suffered continuous loss. During this eight‑month period, he was contractually prohibited from seeking employment in his field because he was bound by restrictive covenants until 12 June 2026.

His loss for this period is therefore assessed at €141,404.20

2.      Continuing loss during the rest of the restrictive‑covenant period: 13 February 2026 to 12 June 2026

From the date of the hearing to the expiry of the restrictive covenants on 12 June 2026, the Complainant remains prohibited from taking up any position that could reasonably be considered suitable alternative employment.

His loss from 13 February 2026 to 12 June 2026 is therefore assessed at €68,681.99

3.      Prospective loss after the restrictive covenants expire:

After 12 June 2026, the Complainant becomes free to seek suitable employment. However, the scarcity of CEO‑level positions, combined with the circumstances of the dismissal and the disruption to his career trajectory, make it unlikely that he will secure an equivalent role quickly. Based on the evidence before me, I consider it reasonable to allow a further twelve months of loss from 12 June 2026 to 12 June 2027.

This conclusion is reinforced by the decision of Rooney v Twitter International Unlimited Company (ADJ‑00044246), which recognises that senior executives are not required to seek work below their level, and must instead be afforded a realistic period to obtain a comparable post. In that case, which also concerned the dismissal of a senior executive, the AO held that a senior employee “is not obliged to take [or indeed, in my view, apply for] any job at any salary but rather to seek suitable alternative employment attracting an income as close as he could get to the overall compensation package he had enjoyed prior to the dismissal.” This principle recognises that senior‑level employees cannot reasonably be expected to mitigate their loss by accepting roles beneath their level of expertise, responsibility or remuneration. That reasoning applies with full force here.

Accordingly, I assess the Complainant’s future loss to be €210,086.

Considering all of the foregoing, the Complainant’s “financial loss” attributable to the dismissal is €420,172

·        Calculation of award

As set out above, I have found that the Complainant’s overall “financial loss” attributable to the dismissal is €420,172. I must now examine if there is any basis for a “reduction .. on the totality of those damages” as set out by Charleton J in Panisi.

The Adjudication Officer in ADJ 32667, stated, in calculating an award of compensation, that: 

“in considering compensation, regard must be had to all of the subsections of Section 7-and the tests are not confined to the efforts of the former employee-or the Complainant in this case. In circumstances where the Respondent is found not to have met the tests set out in subsections (c) and (d) …. and the Complainant made no contribution to the decision to dismiss her under (a) (b) or (f) It would be wholly unjustified to penalise the Complainant solely for a conclusion that she did not make a sufficient effort of mitigate her losses where the balance of unfairness and failure to comply with the terms of Section 7 as a whole lie squarely with the Respondent

In examining the Complainant’s obligations under section 7 ( c ), I have set out above the nature of the restrictive covenants imposed on him and how difficult it will be for him to secure an alternative role when these covenants expire given the senior level at which he worked. I also note that no evidence was presented to suggest that the Complainant contributed in any way to his dismissal and am therefore satisfied that his financial loss arises entirely from the Respondent’s actions.

Considering all of the foregoing, I find no basis for any reduction “on the totality of those damages” in this case and I therefore direct that the Respondent pay €420,172 to the Complainant in respect of the unfair dismissal.