Ireland: WRC Awards Record Compensation to Employee in Dismissal Case

The Irish Workplace Relations Commission (the “WRC”), the forum in which employment law-related claims are generally dealt with, considers an unfair dismissal claim brought by a musician, composer and entrepreneur. The Complainant had been employed in the role of CEO and Chairman of a music/tech company (the “Respondent”) at a gross annual salary of €340,000.00. He was removed from his position without notice in 2021.

The Adjudication Officer held that the dismissal was unfair as it was based on an allegation that the claimant’s visa status did not comply with US law. In addition, the Respondent company, which was part of a larger group company in the United States, had emailed the Complainant without warning to inform him that he was no longer an employee and not to access the premises. He was told that if he was to try to access the premises, it would be considered trespassing, and he was denied access to the Respondent’s systems the following day.

Given that no process whatsoever was engaged in by the Respondent prior to terminating the Complainant’s employment, resulting in an egregious failure to comply with fair procedures, the Respondent conceded that there had been an unfair dismissal. This meant that the WRC did not need to focus on whether the dismissal was unfair but rather focused on the compensatory award to be made to the Complainant. It was also accepted by the parties that Irish law governed the Complainant’s employment contract.

Counsel for the Respondent argued that the Complainant had failed to mitigate his losses adequately as a result of his inactivity. However, the Complainant had a non-compete clause within his contract of employment, which prevented him from engaging, assisting, or being interested in any business, trade concern, or commercial activity competing with, taking preparatory steps to compete or intending to compete with his former employer in a geographically defined area. He required the written consent of his employer if he wished to act in breach of this clause after the termination of his employment contract.  Counsel for the Respondent argued that there were still jobs outside of the scope of his restriction which he could have undertaken. However, around February 2022, the Complainant had sought permission from the Respondent to set up a new company, but the Respondent refused to grant him permission and it also refused to agree to him working as a contractor of the Respondent.  The Respondent denied these allegations, but did not submit any evidence to rebut those claims. The result was that the Complainant operated a holiday home business and earned a small amount as an artist.

The Adjudicator Officer regarded the Respondent’s behaviour towards the Complainant as “oppressive.” He referred to the “particularly cruel” breach by the Respondent of the obligation of trust and confidence towards the Complainant. He noted that the distress caused to the Complainant did not form part of his assessment of the Complainant’s financial loss but found that the manner of the Complainant’s summary dismissal “did impact on his ability to mitigate his loss and extended the time for him to commence his new venture.” He also noted that the COVID-19 pandemic had impacted significantly on the Complainant’s holiday home business.

The Adjudicator found that the Complainant was unfairly dismissed and assessed his financial loss to be €460,000 over 17 months. He made an adjustment of €20,000 to account for a five-month period following the expiration of the Complainant’s non-compete clause, reducing the financial loss figure to €440,000 along with a further €24,000 for notice pay.

This case serves as a helpful reminder to employers that fair procedures must be adhered to in the lead up to any dismissal. Employers should also be mindful of any post-termination restrictions that they may seek to impose upon former employees and consider waiving non-compete provisions, particularly in light of the potential impact that such post-termination restrictions can have on a former employee’s ability to mitigate their loss.