A director who claimed he was unfairly dismissed by the company he founded because he was not offered an opportunity to appeal against the decision has lost his legal claim.
The Employment Appeal Tribunal (EAT) ruled that an appeal process would have been “futile” after Mr Moore was dismissed by water-efficient toilet manufacturer Phoenix Product Development, because there had been an “irreparable” breakdown in his relationship with the organisation.
Moore, who invented the product the firm sold, was CEO at Phoenix Product Development between 2001 and 2017, when he was replaced by Dylan Jones. Moore remained as an employee and a director.
Moore had difficulty accepting that the firm was no longer his company and that he was not in charge of it.
His attitude and conduct within the organisation caused a deterioration in his relationship with fellow directors, and an HR and organisational development consultant contracted by the firm found that Moore would “attempt to sabotage any CEO coming into the business”.
Moore was said to have described the firm’s investors as “leeches” and had been critical of the company’s and CEO’s performance during a meeting with an investor in South Africa. He had also had an “intemperate” email exchange with the newly appointed director of operations in May 2018.
In view of these and other matters, the board considered that Moore’s behaviour was not in the best interests of the company and a formal board meeting to consider his future was arranged. Moore responded to this news in a “combative” way.
The appeal process
During the meeting in May 2018 the claimant faced six allegations, including his conduct during the meeting in South Africa which the company viewed as the most serious. Other allegations included the failure to observe key company values; a lack of engagement with product development regarding the quality of ceramic pans from Thailand; allowing industry accreditations to lapse; and a delay in obtaining product approval from South Africa. There was also an issue about effecting a director’s loan of £60,000 without authorisation from the board.
The tribunal found Moore had entered the meeting in a “thoroughly confrontational manner” showing no insight, no regrets, no contrition and blaming others, particularly Jones.
Four of the five directors voted to terminate the claimant’s employment, with only Moore himself dissenting. They felt he had fallen out irreparably with the board and that his presence threatened to destroy the company.
He was given six months’ notice of termination and placed on garden leave. His dismissal letter did not mention any right of appeal.
In August 2018 Moore received another letter that said the board had decided to end his contract early and paid the balance of his notice in lieu.
At an employment tribunal at the East London Hearing Centre in 2019, Moore argued that he had been unfairly dismissed by the organisation because he had not been offered an opportunity to appeal against the board’s decision.
The tribunal found that although it was usual for a termination letter to expressly offer a right of appeal, this was not mandatory under the Acas code. It also noted that Moore did not ask to appeal the decision.
Employment judge Guy Pritchard ruled in 2019 that Moore’s dismissal had been fair.
Moore launched an appeal at the EAT, stating that the tribunal had failed to address the alleged grounds of unfairness; had failed to give adequate reasons for its findings; and had erred in applying case law in its decision.
However, the EAT dismissed all grounds of appeal, stating that Moore had an “intransigent and unrepentant approach to the allegations against him”.
Justice Choudhury said: “No doubt this will come as a bitter disappointment to the claimant, who has invested a large part of his working life to this product and, latterly, to the company.
“The tribunal made a clear finding about the claimant’s unrepentant stance and the lack of likelihood of change on his part. That does not bode well for the claimant’s continued employment, given the reasons for the breakdown in relations.
“This is not a case that involves analysis of complex or subtle issues of fact which might have a bearing on the likely outcome had a different procedure been followed. The situation here is one of an irreparable breakdown in relations and an unrepentant employee.”