WRC Confirms Genuine Redundancy

In 2016 the Respondent, a global high volume paper bag supply chain company, made an unsuccessful attempt to enter the market in the United States of America. This led to significant losses.

In submissions to the Workplace Relations Commission (“WRC”) the Complainant describes writing to the Managing Director “Mr DB” several times in 2016 and 2017 expressing concerns about him withdrawing large amounts of cash from the business, but his response was “I control the cheque book, not you”. To address the severe cash flow problems Mr DB sought to obtain a loan that required a guarantee the company was solvent.

After taking legal advice the Complainant, Mr G McC (Operations Director Dublin) and Mr AR (Chairman) told Mr DB they could not sign the guarantee unless he agreed to recapitalise the company. Ultimately Mr DB sold his house, and the loan was obtained as an interim liquidity measure. The Complainant informed the WRC that Mr DB was furious that he had been “forced” to sell his house and the relationship deteriorated rapidly, to the extent that a severance agreement was drafted in October 2017 but never executed.

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