The High Court awarded Donal McCarthy €301,479 in damages after finding that the defendants wrongfully dismissed him by giving too little notice. Mr Justice Hanna held that six months was a reasonable notice period and that Mr McCarthy was entitled to bonus payments for the final 15 months of his employment.
The judgment, delivered on 27 November 2009, concerned Mr McCarthy’s employment with three companies in the Dairygold group: Breeo Foods Limited, Reox Holdings plc and Dairygold Cooperative Society Limited. He had joined the group in 2000 as a site manager at its Mallow plant and later became managing director of Breeo, a Dutch company in the group. By the end of his employment, his annual salary was €207,000.
Mr McCarthy said his move to the Netherlands was temporary and that he understood the group would keep his managing director role open, or find him an equivalent position. The defendants disputed that account. The court preferred the evidence of the group’s chief executive, finding that Mr McCarthy had been appointed to improve a struggling business and was expected to remain until the work was done. It also rejected his claim that the defendants had guaranteed him a continuing or similar role. The court found they had an obligation to use their best efforts to accommodate him where possible.
After the Dutch assignment, Mr McCarthy worked on a project exploring expansion into Russia. The judgment records that the project did not succeed and that his employment ended by letter dated 23 November 2007.
The defendants relied on a 2000 contract that provided for four weeks’ notice. The judge found that contract no longer reflected the seniority and scope of Mr McCarthy’s responsibilities by 2007. He said the employers should have provided updated terms and conditions. On the evidence, six months was reasonable notice; a 12-month notice period agreed for the chief executive was a one-off arrangement.
The court also accepted Mr McCarthy’s evidence that bonus targets had not been set for his overseas role and that he had previously received bonuses. It found he was entitled to the relevant bonuses for the last 15 months of employment.
Mr McCarthy had originally sought a range of declarations, injunctions and damages, including claims linked to an incentive plan and a put and call option agreement. His substantive claim concerning the long-term incentive plan was abandoned during the hearing. The judge had directed that the case proceed as a common-law wrongful dismissal claim and assessed the damages within that framework. The €301,479 award included six months’ pay and benefits, bonus arrears and a one-off long-term incentive payment. The judgment does not set out a separate order on the other reliefs sought.