WRC awards company chief executive its biggest payment of the year

The Workplace Relations Commission (WRC) has ordered its biggest payment this year of €133,000 to the former chief executive of a medical clothing firm who said its investors pulled funding and told him to either work for free or leave immediately without pay.

The sum awarded by the tribunal to Mario Kirstner against Suirsafe Technologies Ltd consists of €108,000 for constructive dismissal and a further €25,800 for “illegal” wage deductions.

It is the largest payment ordered by the tribunal under the Unfair Dismissals Act 1977 so far this year, and amounts to the full six months of lost earnings claimed by Mr Kirstner after leaving the €216,000-a-year role.

His case was heard in the absence of the respondent company last month after the firm failed to appear to make out a defence.

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In evidence, Mr Kirstner said he was put in an “impossible position” in April 2022 by the owners of Suirsafe Technologies Ltd when they cited a “political/legal situation in China” and said it could not continue to invest capital into the Irish firm.

He said the company was “heavily reliant” on shareholder funding just to survive – but that the investors, Li Sen and Cynthia Ye, said to him: “[We] hope the management of Suirsafe will find ways to survive this critical period and avoid insolvency.”

That position was “entirely unreasonable”, but he did his best to keep the company running – making sure that other staff were paid after May 2022 despite not receiving his pay after that time, he said.

After he wrote to staff telling them he feared insolvency without an immediate cash injection, the company’s backers demoted him to chief operating officer and replaced him with one of the investors, Ms Ye, he told the tribunal.

The investors then ordered him to hand over full control of the firm’s bank accounts to Ms Ye and register her as a director, Mr Kirstner said.

He told the tribunal he opposed the demotion as “unilateral and unreasonable” but went along with the orders as Ms Ye had promised a funds transfer.

Mr Kirstner said he hoped the funding would arrive in time to keep the company running and save his colleagues’ jobs but that no money came.

He said his “faith” in the shareholders, Mr Li and Ms Ye, “was misplaced”.

Mr Kirstner said that he gave notice of resignation in May 2022 and agreed to serve out the six months’ notice set out in his contract.

However, he got an “ultimatum” back from Ms Ye to either continue working for the firm without a salary until it became profitable, or leave without what she referred to as a “six months transition period”.

“This was a clear reference to his contractual notice period. Essentially, the complainant was informed that he could work for free or leave without pay,” his solicitors, McInnes Dunne Murphy, wrote in a legal submission.

They said that Mr Kirstner had been left with “no oversight of financial or other management matters” and feared being left in breach of his duties as a company director.

The complainant’s lawyers said Ms Ye had “complete disregard for [Mr Kirstner’s] rights as an employee” and that their client had been treated in a “demeaning, unfair and callous” manner.

He had “no choice but to resign”, the solicitors argued, with the tribunal noting that Mr Kirstner quit his employment and his directorships of group companies with immediate effect on 14 June last year.

Mr Kirstner said Ms Ye “cut off all communication” with him after he resigned, blocking him on the Chinese messaging app WeChat and refusing to take his calls or answer his emails.

In his pay claim, Mr Kirstner’s position was that he got no salary payments between May 1st 2022 and the date of his resignation, and that this had been an unlawful wage deduction.

In his decision, WRC adjudicating officer Peter Murtagh ruled that the company set about to commit “a significant breach of the contract by not paying [Mr Kirstner] during the notice period or expecting him to work for six months for no pay”.

The adjudicator wrote that the complainant was “entitled” to resign immediately without using the firm’s grievance procedure, and upheld the unfair dismissal claim.

Mr Murtagh said that he was satisfied with Mr Kirstner’s explanation that the six-month notice period set out in the contract left prospective employers reluctant to take him on until it expired, and awarded the full six months’ lost earnings sought, €108,000.

The adjudicator said that the company’s failure to pay Mr Kirstner for six weeks between May 1st and June 13th, 2022 was illegal – awarding €25,800 under the Payment of Wages Act 1991.