An Employment Tribunal Judge reduced a claimant’s compensation to zero because the claimant would still have been dismissed if the proper procedure had been followed.
Mr Paolo Porchetti - a highly paid senior executive at Brush Electrical Machines Ltd - was sacked after sabotaging a settlement process by submitting nearly £60,000 worth of outdated expenses which he kept in a shoebox.
Mr Porchetti had been offered a lucrative settlement package by the bosses at Brush Electrical Machines, to leave the company after they became very frustrated by his poor performance.
From 2015 until his dismissal on 30 July 2019, Mr Porchetti worked for Brush Electrical Machines as sales director for the Asia-Pacific region, based in Kuala Lumpur, Malaysia from 2017. His Line Manager, Mr Van Schaik - the company’s Executive Sales Director - told the tribunal that during this time he had to constantly remind Mr Porchetti to submit expense reports and to create calendar reminders. Colleagues complained that he was unavailable; he failed to respond to key clients and was not successful in improving his sales team’s performance - causing disruption within the business.
A meeting was held in February 2019 between Mr Van Schaik, Mr Chris Abbott (Chief Executive Officer) and Mr Christian Londereau (group HR Director) where it was decided that the group HR Director, who was also a trained lawyer, would explore the possibility of Mr Porchetti being interested in a paid exit. In May, he was invited to a meeting - which Mr Porchetti was 45 minutes late for - and offered a settlement to leave the company with six months’ salary of £660,000. At that time, he did not disclose the amount of the expenses owing to him.
Later, he admitted to having three years of expenses to claim - receipts he had kept in a shoebox. The Tribunal was informed that company policy stated that all authorised expenses for trips should be forwarded to the finance department within 14 days from the date of return. Without agreeing to pay the expenses, Mr Van Schaik did agree to review them.
Two days later, Mr Porchetta returned his rental car in a damaged state without reporting the damage to the business or to local police. He was contacted by the HR Director who informed him that £2,000 would be deducted from his final settlement. However, Mr Porchetti later also returned his laptop in a damaged condition and failed to return his iPad.
Brush Electrical Machines refused to pay the expenses when Mr Porchetti finally submitted them - resulting in negotiations breaking down and the company feeling the relationship was irreparable. He was dismissed at the end of July, with the company admitting to the Tribunal that that Mr Porchetti’s dismissal was quick.
Employment Judge Victoria Butler, at the Midlands East Region hearing, endorsed the company’s statement that the dismissal was fair but said that Mr Porchetti’s actions amounted to blameworthy conduct leading to his dismissal and reduced his compensation and basic award by 100 per cent stating that he would have been dismissed regardless.
Barry Ross - Director and Partner at Crossland Employment Solicitors - said:
“Not every employee will be the architect of their own downfall in such a significant way, so it is important to ensure that fair procedures are followed.”
Kate Palmer - HR Advice and Consultancy Director at Peninsula Group - stated that employers should be wary of settlements and added:
“The danger with settling is employers often have made up their minds to terminate the employee before the agreement is signed. This employer learned the hard way how essential the process is before dismissal, even where the reason for the dismissal is valid.”
