Managing director fired by sister from family-run business awarded zero compensation

Seán McCárthaigh

The Workplace Relations Commission has ruled that the managing director of a family-run furniture delivery and assembly business, who was unfairly dismissed from his job by his sister, is entitled to zero compensation.

The WRC found that a “nil award” was “just and equitable” over the unfair dismissal of Christopher Kane from his role as managing director of RLC Transport Limited, based in Donabate, Co Dublin.

The WRC heard that there are ongoing related High Court proceedings initiated by the company over claims that Mr Kane tried to appropriate the business unlawfully.

The company was established in 2014 and is entirely owned by the complainant’s sister, Jacqueline Kane, who worked in RLC’s office but left the management of the business to her brother.

The WRC heard that their parents were paid out of the business, while their brothers, Derek and Jonathon operated a separate transport company.

Mr Kane claimed he was getting nothing for his work in building up the business, while he was also concerned that he could no longer afford to pay money to his parents because of the need to address issues with the company’s ageing fleet of trucks.

He told the WRC that he believed his brothers should start paying for his parents, as they had been boasting about how well their business was doing.

Mr Kane accepted he had made contributions to his pension out of company funds, as well as taking out director’s loans, which he claimed he had repaid before his dismissal.

He gave evidence that he had also reduced his own salary significantly.

The WRC heard that Mr Kane had known after a meeting on January 16th, 2024, that he would be dismissed.

He admitted that he later changed the password for the company’s e-mail address and refused to give the details to his sister.

Counsel for RLC Transport, Donnchadh Woulfe BL, said the company had established at the time of the complainant’s dismissal that he had made many unauthorised payments to himself.

Mr Woulfe accused Mr Kane of actively trying to appropriate the business as well as shutting the company out of key accounts, which meant the decision to dismiss him was “entirely reasonable.”

He claimed the complainant had lied under oath in relation to repaying director’s loans as he was unable to show the repayments in the company’s accounts.

Ms Kane gave evidence that although she was 100 per cent owner of RLC Transport, she left the running of the business, which she believed was profitable, to her brother.

Unauthorised payments

However, Ms Kane said she discovered in September 2023 that her brother had stopped paying her parents and that the company was going into liquidation.

In December 2023, Ms Kane said she became aware of significant, unauthorised payments that her brother had been making to himself and other businesses with which he was associated.

She claimed he was also making payments of up to €10,000 per month to his pension scheme.

Ms Kane told the WRC that she dismissed her brother as a director in January 2024 after concluding that he would need to be dismissed, as all trust was “totally gone.”

She claimed they agreed at the meeting on January 16th, 2024, that they would go their separate ways and their brother, Derek, would come into the business.

Ms Kane said her brother, Christopher, locked them out of their accounts and refused to give them access, while also sending confidential information out of the company to try to get clients to join his new business.

In evidence, Derek Kane, told the WRC that forensic accountants he had hired had found that the business was “in dire straits.”

He claimed his brother broke an agreement not to approach RLC Transport’s major client.

The witness said they discovered the company was losing its major client after it decided there was “too much noise” associated with the family business.

WRC adjudication officer, David James Murphy, said many key facts of the case were not in dispute.

Mr Murphy noted that the complainant had made a success of the business but was unhappy that he was not made a shareholder, and no agreement to transfer ownership to him could be reached.

The WRC official said the company had a reasonable belief that Mr Kane was trying to expropriate the business after agreeing to leave the business, but then locking his sister out of the company’s e-mail system.

While there was a compelling argument for dismissing Mr Kane without process, Mr Murphy said the company had not shown that it could have protected its business without summarily dismissing him, for example, by first suspending him.

On the issue of compensation, Mr Murphy said it was unclear the financial loss suffered by Mr Kane from his dismissal due to the lack of reliable information about his actual salary with RLC Transport, as well as his new business.

He noted that the company had discovered after recovering access to its e-mail that Mr Kane had actively directed its existing clients to his new company.

Mr Murphy ruled that a “nil award” of compensation for the unfair dismissal was “just and equitable” in the circumstances.