A drinks executive who objected to a 30% pay cut for 2,000 workers during Covid has been awarded £1.63 million in an unfair dismissal and whistleblowing case at London employment tribunal.
Vlad Zabelin was chief investment officer at SPI Spirits UK, which sells the Russian vodka brand Stolichnaya until he was sacked in a phone call with Yuri Shefler, a Russian billionaire who owns parent company, SPI Group, based in Luxembourg.
SPI Group operates in more than 170 countries, producing, distributing and selling some 380 brands. It has network of 70 retail shops, develops large-scale real estate projects and farms, and has acquired 15 wine and spirits companies.
Zabelin, who earned £180,000 per year, had complained about Shefler’s decision to impose a 30% pay cut on around 2,000 workers worldwide, despite the business being in profit and Zabelin exploring investment opportunities. The pay cut had originally been planned to last three months but then extended.
He had initially raised concerns about the way his bonus was being calculated arguing that it was a breach of contract. He then also raised concerns around staff welfare, and that the unilateral pay cut was being made under a pretence that the Covid pandemic meant that group needed to make savings.
In June 2020, Shefler called Zabelin and fired him during the conversation. In an email Zabelin said that Shefler had said that bonuses would only be considered if a person does something “extra”.
“When I told him that this was not what my employment contract was saying he told me ‘then sign a resignation letter if you don’t agree’. When I asked him why I should sign a resignation letter, he told me literally ‘forget about everything, I am firing you’ and hung up,” read the email.
The respondents argued that Shefler was merely a shareholder of the parent company and had no actual or ostensible authority to dismiss the claimant and, moreover, that the claimant knew that. But the tribunal panel disagreed.
It found that Shefler had “actual authority” to dismiss the claimant: he had an office in London on the same premises as the claimant; he alone had made the decision to recruit the claimant; and there was no evidence that his authority to do this was challenged.
The judge said that SPI Spirits had to prove reasons for the dismissal. It had not and so the dismissal was unfair.
The judgment reads : “We find it reasonable for [Zabelin] to believe that scaring staff about the state of the business and making a substantial unilateral cut in their pay in times of such uncertainty caused by the pandemic would potentially breach trust and confidence. Moreover the claimant had been told by [a colleague] about the atmosphere of ‘mess and despair’ in Luxembourg caused by the cuts.”
The panel also found it reasonable to believe that protect disclosures made by Zabelin were in the public interest: “It was not a purely private matter. The SPI Group is a fairly large international company with high profile products. The cuts appear to have applied to most or all of 2000 employees. It is reasonable to believe that at a time of Covid, there was public interest in the impact on employees including whether employers were unnecessarily cutting pay of staff, and on how employees might have felt about it. An open-ended 30% pay cut was significant.”
The judge ordered SPI Spirits UK and Yuri Shefler to pay Zabelin a £1,626,452 detriment.