The High Court ruled that a former employee of B-Lex Limited was not entitled to wages through the end of July 2005, after finding his conduct breached his duty of good faith and fidelity to his employer. The court held that the Employment Appeals Tribunal had erred in law in deciding otherwise.
The judgment, delivered by Miss Justice Laffoy on 3 December 2007, concerned the employer’s appeal on a point of law from the Tribunal’s determination of a Payment of Wages Act claim. At the hearing, the employer pursued the appeal only over minimum notice pay. It said it would pay the €595 awarded for untaken leave and the €7,800 bonus award, which the Tribunal had affirmed.
The employee had claimed €13,115, saying the employer had wrongfully deducted amounts from his final wages. A Rights Commissioner awarded him €1,486 net for two weeks’ notice, €595 net for untaken leave and €7,800 net for a contractual bonus. The Tribunal kept the leave and bonus awards but raised the notice component to €11,250, finding the employment terms provided for three months’ salary if the employer terminated the contract.
The employment letter stated: “Payment of three months salary in the event of B-Lex wishing to terminate the contract/offer”. The employee, who worked as director of business development from February 2003 to July 2005, told the managing director on 11 July 2005 that he was leaving but would work to month-end. The following day, the managing director directed him to leave immediately.
The employer argued that the employee had repudiated the contract by deciding to buy shares in a company the employer was seeking to acquire. The Tribunal had rejected that argument, citing the target company’s status as a customer, the absence of a documented acquisition agreement and the employee’s uncompleted purchase plans.
Justice Laffoy found those distinctions immaterial. She concluded that on 11 July the employee had shown an intention to frustrate the employer’s acquisition, breaching his duty of good faith and fidelity and destroying the employer’s trust and confidence. The Tribunal therefore erred in finding he was entitled to wages to the end of July, whether as notice pay or otherwise.
The court also accepted the employer’s alternative argument that the Tribunal had awarded more notice pay than the employee claimed, departing from the case the employer had been given notice of. The final order was that the Tribunal erred in law in failing to set aside the Rights Commissioner’s finding of entitlement to at least two weeks’ notice and the related €1,486 net award. The order did not set aside the leave or bonus awards.