US software firm ordered to pay €170k to Irish executive

A US multinational software firm has been ordered to pay an award of nearly €170,000 to a senior Irish executive following a ruling of unfair dismissal by the Workplace Relations Commission.

The award was made after a US-based in-house lawyer for the company gave evidence and admitted he had not checked Irish employment law before dismissing a redundancy appeal by the sales director, who had been its most senior employee in Europe.

Kevin Foley, former senior director of sales for the Europe, Middle East had Asia region (EMEA) at Digital River Ireland Ltd, had claimed the decision to let him go was made in a “sham” process that should never have involved his US-based line manager, whom he alleged had benefited from the move.

Mass redundancies were announced in the Digital River group on 19 July 2022 – but Mr Foley said his former line manager, the company’s former senior vice-president of sales, told him there were to be “no more changes in Europe” on that date – and asked him to pass that message on to his direct reports, the tribunal was told.

He told the WRC he thought after getting a retention bonus in August 2022 he would be kept on until the following spring – only to be told the following month he was at risk of redundancy after spending three weeks working on a restructuring plan of the organisation’s sales operation.

“To this day, I still don’t know what happened in the business to make this dramatic change, to be told I was no longer part of the business,” he told the Workplace Relations Commission earlier this week.

Mr Foley’s solicitor, Anne O’Connell, argued that Digital River’s redundancy process was a predetermined “sham” because Mr Foley’s former line manager, the US sales team leader, ought to have been at risk of redundancy himself. Instead, the manager took a direct role in the process and ended up taking over the complainant’s management responsibilities for Europe, she submitted.

Denying the claim on behalf of the company, the company’s barrister Alison Fynes BL, appearing instructed by solicitor Niall Pelly of GQ Littler, said Mr Foley was told what was happening “time and time again” but “just did not like the response”.

“I wasn’t given an answer as to why this happened all through the consultation period and I still haven’t been given an answer as to what happened to result in the sales team being flattened,” Mr Foley said in response to this.

He was made redundant on 19 October 2022, after three consultation meetings and the rejection of his proposal for an alternative role, with dismissal upheld by the firm on appeal.

At a series of remote hearings in late 2023 and earlier this year – some running well into the evening to accommodate attendees dialling in from the company’s US headquarters near Minneapolis – Digital River’s HR chief Becky Garroch, its assistant in-house counsel Andrew Hedden, and another member of its executive team, Ted Rogers, each gave evidence.

However, Mr Foley’s former line manager did not appear.

Mr Foley was offered an appeal of the dismissal decision to Digital River’s in-house counsel, Mr Hedden. He was questioned on his handling of the matter by WRC adjudicator Jim Dolan at a hearing last September, Mr Dolan noting that the appeal had been done as a “sort of ex parte, on the papers” process and that no oral hearing had been held.

Mr Hedden accepted that Mr Foley “personally felt there was a grievance” in how the company had made him redundant.

“In preparation for your investigation of the facts, did you study the complainant’s contract of employment?” Mr Dolan asked.

“Not at that time, no,” Mr Hedden said.

“Did you at any time read any of the Irish legislation on redundancies?” the adjudicator asked.

“Not as part of reviewing the appeal, no,” Mr Hedden replied.

Mr Dolan put it to the lawyer that Mr Foley’s contract of employment referred to a right to have a “genuine” grievance heard by a superior and a right to be accompanied by a colleague at the appeal hearing.

Mr Hedden replied that Digital River’s redundancy procedures provided for a “written appeal process” which was distinct from the grievance process referred to by Ms O’Connell and Mr Dolan.

“I think this is a matter for me to decide,” Mr Dolan told the witness.

In his decision, published by the WRC this morning, Mr Dolan noted that Mr Hedden had been asked at the hearing whether he had “checked if there was any national legislation on this subject”.

“He replied that he had not checked this,” Mr Dolan wrote.

He also noted that at the time of the appeal, Mr Hedden had been junior to those who decided to make Mr Foley redundant, which he called “unusual”.

“The respondent’s failure to conduct an appeal hearing with the complainant at which he could be accompanied constitutes a serious flaw and a breach of their own procedures and policies,” Mr Dolan wrote.

Although he found there had been a genuine redundancy situation at Digital River, Mr Dolan considered the appeals process to be “so flawed” that Mr Foley’s complaint under the Unfair Dismissals Act 1977 was well-founded.

Mr Dolan added that Mr Foley had made a “very positive effort” to find new employment, and had secured a suitable role within eight months of redundancy.

He accepted a loss figure of €168,682.09 presented by Mr Foley’s solicitor, Ms O’Connell, and awarded the sum against Digital River.