In the recent Employment Appeals Tribunal decision of Michael Baldwin v Ace Compaction Systems Limited, an accountant was held to have been constructively unfairly dismissed and was awarded €40,000 in compensation
The Respondent Company opened in March 2003 and the Complainant joined a month later. The Claimant was employed as Financial Controller. A second company was also set up manufacturing environmental contractor systems and this was a separately owned company. The Complainant and one of the Respondent’s directors were shareholders in this company. The Complainant was also a director in the Respondent Company.
The second company bought machines from the Respondent company, which often put financial pressure on the Respondents. In March 2010, the Complainant became aware of the Respondent’s yearend figures and knew that there was a risk that the Respondent could become insolvent. As a director, the Complainant would be personally liable if the company continued to trade while insolvent, and so the Complainant suggested to one of the directors that the second company be liquidated.
The Complainant also discovered that a large number of advice notes were missing and he raised a query about this, which remained unresolved. In a board meeting on the 20 July 2010, the Complainant suggested that the Respondent Company should be put into liquidation and it was agreed to defer this suggestion until the shareholder’s meeting.
When the Complainant was in work the following day, he was informed by Director, D, that he would be suspended for a month and that he would be removed as a director. The Complainant subsequently returned to work after his month’s suspension, where he was questioned why he had returned to work. The Complainant was then placed on suspension pending an investigation. During his suspension, the Complainant still had access to the company bank accounts and saw that the company was still not acting in accordance with company law requirements and so he wrote to the Respondent’s bank and auditors.
The Tribunal noted that the Claimant had been unfairly dismissed when he began raising the issue of “reckless trading”. The Tribunal noted that the Complainant had attempted to adhere to proper legal and financial compliance requirement and he was then ousted by the Respondent for not being a team player. Accordingly, the Complainant was awarded €40,000 in compensation for his unfair dismissal.
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