Business

Tech sales manager claims ex-boss benefited from his redundancy

Employee was earning base salary of €170,000

A senior manager has said he was put out of his job at a software firm earning a base salary of €170,000 in a “sham” redundancy that involved his US-based boss, who he said benefited from the decision and should never have had a role in the process. Photograph: Alan Betson / The Irish Times

Stephen Bourke
Fri Feb 9 2024 - 11:32

A senior manager has said he was put out of his job at a software firm earning a base salary of €170,000 in a “sham” redundancy that involved his US-based boss, who he said benefited from the decision and should never have had a role in the process.

Kevin Foley, former senior director of sales for Europe, Middle East and Asia region (EMEA) at Digital River Ireland Ltd has told the Workplace Relations Commission (WRC) he thought he would be staying on until the following spring when he was offered a retention bonus in August 2022 – only to for the firm to tell him he was facing the prospect of redundancy less than a month later.

“To this day, I still don’t know what happened in the business to make this dramatic change, to be told I was no longer part of the business,” he saidearlier this week.

A barrister acting for Digital River has said Mr Foley was told what was happening “time and time again” but “just did not like the response”.

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The firm denies Mr Foley’s complaint under the Unfair Dismissals Act 1977, in which the Workplace Relations Commission concluded a fifth and final hearing day on Thursday evening. .

Mr Foley’s solicitor, Anne O’Connell, has argued that the company’s redundancy process was a predetermined “sham” because Mr Foley’s former line manager, the US sales team leader, ought to have been at risk of redundancy himself. Instead, the manager took a direct role in the process and ended up taking over the complainant’s management responsibilities, she submitted.

Mass redundancies were announced in the Digital River group on 19th July 2022 – but Mr Foley said his former line manager, the company’s former senior vice-president of sales, told him there were to be “no more changes in Europe” on that date – and asked him to pass that message on to his direct reports, the tribunal was told.

“I had to rally the team together and give them reassurances that they were safe,” Mr Foley told the tribunal.

Mr Foley said that on 29th August 2022, he signed a retention bonus deal he said was in recognition of his “continued service throughout and until 31st March 2023″.

Just over three weeks later on the 21st of September, the company then told Mr Foley he was at risk of redundancy, the WRC heard. He said the move was “sudden” and “out of the blue” after he had worked to do a huge restructure of the sales team in the wake of the mass redundancies.

He was made redundant on 19th October 2022, after three consultation meetings and the rejection of his proposal for an alternative role, with dismissal upheld by the firm on appeal.

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The company’s barrister Alison Fynes BL, appearing instructed by Andrew Pelly of the US law firm GQ Littler put it to Mr Foley was told “time and again” during the redundancy process that the global sales team was being “flattened” as the company was “engaged in a re-evaluation its strategy in light of changes that had been made in the months prior”.

“You were not willing to accept that response,” she said, a point she put to him repeatedly in cross-examination on Thursday , and which Mr Foley repeatedly denied.

“I wasn’t given an answer as to why this happened all through the consultation period and I still haven’t been given an answer as to what happened to result in the sales team being flattened,” he said.

“I just don’t think, Mr Foley, you and I are going to agree in relation to this ... you had a response and you just did not like that response,” Ms Fynes said.

Questioning Mr Foley on the retention bonus, Ms Fynes put it to him that a business “can never give an ironclad guarantee it will never have to make individual employees redundant”.

“There are no guarantees, to use your words from yesterday,” she said.

“In relation to?” Mr Foley asked.

“Anything in this life, I suppose; while an employer may wish to, it can’t make guarantees, do you accept that as a proposition,” Ms Fynes said.

“Quite frankly, I don’t know if a company can give a guarantee around that. I think a company can make guarantees it won’t make someone redundant, however. I don’t know if it’s a wise business choice but I think they could,” Mr Foley said.

After further exchanges on this point, adjudicator Jim Dolan intervened and said: “Would it be helpful, Ms Fynes, if I answered the question for you?”

“It’s a matter for you,” Ms Fynes said.

“Companies often give guarantees, listen carefully, that there would be no enforced redundancies, that if redundancies do come up, they would be voluntary redundancies. That’s okay for big companies but smaller companies can’t put themselves into that situation,” he said.

“Thank you, I’m obliged,” counsel said.

Mr Foley’s ex-line manager did not attend the hearings or give evidence to the WRC, though the company’s HR chief Becky Garroch, its assistant in-house counsel Andrew Hedden, and another member of its executive team, Ted Rogers, all testified over the course of the proceedings, which first opened last September.

In closing submissions, Ms Fynes said there was “very clear evidence of a redundancy situation” in circumstances where the firm had cut its global workforce from 648 to just 382 in 2022 – with 11 of the jobs lost in the Irish firm.

“This was not personal to Mr Foley but was a necessary business decision in a difficult business climate,” she said, adding that the redundancy consultation and appeals process which followed had been fair.

However, Ms O’Connell said: “There was never any evidence to prove that it was required. Ted Rogers gave evidence that there was no financial need for it. We still have no idea of why. There is a guess that it was to do with to do with securing [the line manager’s] role, but that’s simply a guess, because [my client] still does not know.”

She said the respondent had failed to prove both that there was a genuine redundancy situation and that it had acted reasonably in the process of dismissing her client.

“[The line manager] should never have been part of the decision-making to make the complainant’s role redundant because he benefited from that decision,” she added.

As well as a figure of €168,682.09 provided to the WRC on 30th August 2023, the tribunal was also told this week that Mr Foley is seeking further compensation for a continuing reduction in his earnings since taking on a new job.

He said his job with Digital River paid a €170,000-a-year base salary with the potential for the same again in commission with Digital River

He said his new job also paid him this “50/50 variable” with a base salary of €130,000 and the same sum again in potential commission. However, he said that he was on a “ramp” in the new firm after joining last September and had earned no commission in his first two months.

Ms Fynes argued Mr Foley would be getting a higher percentage pension contribution in his new role and had previously brought a grievance against Digital River about changes to its commission structure there affecting his earnings.

Adjudicator Jim Dolan closed the hearing yesterday evening and told the parties he hoped to have a decision in writing to them before Easter.

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