Mr Kiely was unfairly dismissed without fair procedures. The Labour Court awarded €445,400 plus notice compensation, highlighting mitigation efforts and the restrictive impact of a non-compete clause on loss.

Mr Kiely was the founder and chairman of HYPH Ireland Limited where he began employment in 2013.

An argument took place in November 2021 between Mr Kiely and the CEO of Hyph.

The following morning, he was notified via email that he was being dismissed over an issue with his visa status. Mr Kiely was dismissed without fair procedures.

Mr Kiely’s annual salary was in dispute between the parties, with Mr Kiely claiming it was $384,000, while HYPH claimed it was $204,000 plus a housing allowance.

What did the WRC decide?

The WRC decided that Mr Kiely was unfairly dismissed and as such his claim under the Unfair Dismissals Acts 1977 to 2015 should succeed.

An award of €440,000 compensation was made by the WRC. HYPH accepted that the Complainant’s dismissal was unfair but sought to reduce the compensation amount awarded by the WRC on the basis that it was excessive and appealed to the Labour Court.

What did the Labour Court decide?

The compensation first awarded to Mr Kiely at the WRC was slightly increased at the Labour Court, from €440,000 to €445,400 (16 months’ pay), with another compensation amount of €25,968 on top of this, for a breach of the Minimum Notice Act 1973 – 2005. 

The Court accepted Mr Kiely’s account that he knowingly remained in the US unable to work in an attempt to resolve matters with the Company. Given his level of remuneration as CEO, the Court found that it was not unreasonable for him to take the view that this was the best way for him to mitigate his losses at that time.

In assessing a non-compete clause within Mr Kiely’s contract of employment which applied for 12-months post-termination, the Court recognised that this significantly constrained his ability to mitigate his losses. He sought permission to be released from the non-compete to continue working, which was refused by the Company.

The Court noted Mr Kiely’s efforts to mitigate his loss, including researching new technologies and filing two patents to start up a new company. Mr Kiely referred the Court to two non-disclosure agreements with other parties, with the names redacted, to show his efforts to develop new business interests after the expiry of the non-compete.

The Court noted that reinstatement or reengagement were not appropriate remedies given there was ongoing litigation between the parties in other fora.

In assessing the amount of compensation to be afforded, the Court noted it must be an amount that is ‘just and equitable in all the circumstances” and awarded 16 month’s loss, which equated to €445,440.

The case has now been appealed on a point of law to the High Court.

• The decision highlights the potential for high awards for unfair dismissal.
  
• The decision underscores the importance of fair procedures and the following of a process when terminating an employee’s employment.
  
• The decision underscores that the Labour Court will consider restrictive covenants when assessing mitigation of loss, meaning employers may wish to consider waiving any such covenants in such circumstances if they prevent an employee from seeking work.

The full case can be found here.