Business

Firm's manager was unfairly dismissed after buyout bid

A General Manager at an engineering firm was unfairly dismissed from his post shortly after tabling a bid to purchase the company out of examinership.

At the Workplace Relations Commission (WRC), the firm was ordered to pay the general manager (GM) €30,000 for the unfair dismissal.

The GM – who was receiving a salary of €140,000 along with annual bonus payments of €50,000 – proposed purchasing the business in a management buyout in January 2017. The business entered examinership on December 8 2016, after revenues decreased by 40pc from €18.4m in 2015 to €10.9m in 2017.

The owner/MD of the business suspended the GM on January 12, 2017. On February 10 he stated that he was making the GM redundant as a result of cost-cutting.

The GM argued that it was a ‘sham redundancy’, prejudged and lacking in fair procedures and that it was due to his planned management buyout and not a genuine redundancy.

At a January 11 meeting the GM confirmed to the owner/MD that he had provided confidential information on the business to a third party. The GM has, however, successfully sued for unfair dismissal.

WRC adjudication officer Catherine Byrne said that she agreed with the GM that the move by the owner/MD to suspend him was “to neutralise” his efforts to take over the company. Ms Byrne said: “While I understand the rationale behind the decision of the employer to terminate the GM’s employment, I find that the process that led to his termination was opportunist and unfair.”

Ms Byrne stated that the GM’s planned buyout changed his status and that he “became an adversary rather than a trusted lieutenant”.

The owner/MD told the two-day hearing that the decision to make the GM redundant was regrettable and “the decision came down to one thing – finance”.

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