A start-up has been mandated by a tribunal to compensate an ex-senior executive with more than €88,000, deeming the firm’s failure to pay his salary, notice period or accrued annual leave as an illegal deduction. The order was successfully obtained by David Morris, the former Chief Medical Officer of Cushla Health Systems Ltd, through the Workplace Relations Commission (WRC). The ruling followed a decision under the Payment of Wages Act 1997 and was revealed recently.
During the employment tribunal which took place in August, Mr Morris, who represented himself, shared that the firm owed him five months of his annual €125,000 salary from 2024, notice pay for three months, and pay for ten days of accumulated annual leave. He provided evidence that a quarter of his salary had been consistently delayed from July 2022 till December 2023, and he received no payment in 2024.
According to Mr Morris, Richard Egan, the CEO, informed him when he sought payment for January’s salary, about transitory issues with financing and still allocated tasks. Mr Morris recounted that he persistently received similar promises from Mr Egan until March. However, he felt a severe financial crunch and drafted a letter demanding repayment for all wage arrears by the end of March. He remained unpaid at March’s end.
On April 3rd, Mr Morris was informed by the company that they couldn’t retain him full time. He disclosed to the tribunal he was asked to cease working and there were ongoing conversations about occasional services, but no formal termination announcement was received.
Following a month, Mr Morris indicated that he reached out for an update because he was yet to receive his overdue payment. He perceived his employment status as uncertain and his personal financial position as critical by that time.
On April 15th, Mr Egan proposed a new contract to Mr Morris for review. However, having noticed that his prior contract had no mention of a lay-off clause, Mr Morris made a decision to postpone signing the proposed new contract, until further guidance was available.
Mr Morris contended that even in the absence of any consented modifications to his work circumstances, the provisions of his earlier contract pertaining to his wage and perks remained accruing, until his formal notice of termination was received on May 30th that year.
While the firm accepted owing Mr Morris three months of pay, together with the salary covered in his contractual notification period, it refuted any further monetary obligations. They stipulated that Mr Morris was discharged on the 3rd of April and served his notification period thereafter.
Recording his exchanges with Mr Morris, Mr Egan apprised the tribunal that he was in search of work opportunities fully acknowledging the risks and payment ambiguities linked with a start-up enterprise. The CEO indicated that Mr Morris never conveyed any inability to withstand payment delays before his engagement with the company, and was clearly briefed about the usual funding challenges typical to early-stage start-ups in their industry.
Adjudicator Marie Flynn noted that the dialogues exchanged between Mr Morris and Mr Egan did not exhibit a “clear, unequivocal termination” of Mr Morris’s contract until May 30th. Flynn highlighted how Mr Egan mentioned “lay-off” in an email correspondence on the 15th of April, and his continued efforts despite the funding challenges to rectify the situation.
Flynn pondered on the fact why the need for the CEO to terminate Mr Morris’s contract in writing on May 30th, 2024 if he was in fact dismissed on April 3rd, 2024. Flynn therefore concluded that the company is financially accountable towards Mr Morris for the months of April and May of that year, and these two months were included in her calculations of a “total illegal deduction” of €88,134 in favour of Mr Morris.
Tune into our Inside Politics podcast for more rich political discussions and insights.