HomeBusinessLimerick-based firm ordered to pay more than €100,000 to former CEO who...

Limerick-based firm ordered to pay more than €100,000 to former CEO who was asked to ‘work for free or leave’

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A LIMERICK City-based firm has been ordered to pay its former CEO compensation totalling €133,800 arising from his unfair constructive dismissal.

In the case, Workplace Relations Commission (WRC) Adjudicator Peter O’Brien ordered Suirsafe Technologies Limited to pay Mario Kistner €108,000 for his unfair constructive dismissal in June 2022.

As part of a joint ruling, Mr O’Brien ordered the company to pay Mr Kistner, a German national, an additional €25,800 in unpaid wages from May 1 2022 to June 13 2022 after finding that the wages were illegally deducted.

In his findings, Mr O’Brien stated that after hearing the uncontested evidence of Mr Kistner, he found that the action of the employer went to undermine the core of the contractual relationship when the firm implemented a significant breach of the contract by not paying Mr Kistner during the notice period or expecting him to work for six months for no pay.

Mr O’Brien found that Mr Kistner was entitled to immediately terminate his employment contract in June 2022 without the use of the grievance procedure.

There was no appearance on behalf of the firm at the WRC hearing.

Mr Kistner was appointed CEO of the firm in February 2021 and experienced no difficulties in his employment until April 2022, when he was informed by shareholders, Mr Li Sen and Ms Cynthia Ye, that it would not be possible for them to invest further capital in the company.

A letter from the company to Mr Kistner stated that “due to the political/legal situation in China” it was “currently not possible on the part of the investor to invest further capital in the company”.

The letter ended by saying they “hope the management of Suirsafe will find ways to survive this critical period and avoid insolvency”.

Represented in the case by McInnes Dunne Murphy LLP, Mr Kistner stated that he was put in an impossible position, where the shareholders now placed full responsibility on him for the survival of the company, an entirely unreasonable expectation without fundamental cashflow.

Mr Kistner was not paid any salary from May 1 2022, and in mid-May 2022 he was unilaterally demoted to the role of Chief Operation Officer (COO), being replaced by Ms Cynthia Ye.

Despite not consenting to this change, Mr Kistner complied in hope that the shareholders would inject much needed funds into the company.

Mr Kistner put it in writing to the company on May 12 2022 that it was his belief that without an immediate injection of cashflow, the company would inevitably become insolvent, as the company had since run out of money.

As a result of ongoing issues, Mr Kistner issued a notice of resignation on May 23 2022, and agreed to work his six-month contractual notice period, on the assumption he would be paid during this time.

However, the WRC was told, on June 6 2022, Ms Ye emailed Mr Kistner with an ultimatum; that he could either continue working for the company without a salary until it became profitable or leave his position in the company immediately “without the six months transition period”.

Mr Kistner stated that, essentially, he was informed that he could work for free or leave without pay.

He alleges that Ms Ye then advised him that this ultimatum and the threatened breach of his contractual entitlement to six months’ notice was a test of his confidence “to see if you are capable to manage or guide Suirsafe to success in the near future”.

Mr Kistner contended that his lack of control over any decision making was at that point impeding his duties as a director to the company and, coupled with his employer’s refusal to pay his salary, he decided to resign with immediate effect on 13 June 2022.

After he resigned from his role, Ms Ye cut off all communication with Mr Kistner, blocked his ability to communicate with her on WeChat – the preferred mode of communication in the company – and refused to engage with Mr Kistner by email or phone.

She further refused to hold or attend meetings of the directors of the company.

Mr Kistner stated that after a period of loyal and successful service, he found the company’s treatment of him “demeaning, unfair, and callous”, and in breach of his employment contract to the extent that it is clear the company no longer intends to be bound by it.

He stated that the company fatally undermined his position, where he lost trust and confidence with the company, and left him with no choice but to resign from his employment.

Mr Kistner then submitted a constructive dismissal complaint form to the WRC against the firm and submitted that he acted reasonably in all the circumstances and the conduct.

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