Ex-Managing Director loses Employment Tribunal claim after being sacked over expenses

Redmans Solicitors
August 26, 2013

The former managing director of a multinational company spent huge amounts of company money on unjustified expenses, an Employment Tribunal has heard.

The former employee – who is unnamed, as is the company, for legal reasons – brought an unfair dismissal claim involving victimisation and sexual harassment after he was fired from the company last year because of the large amount of company funds that he was spending on expenses such as holidays, drugs and prostitutes. The matter came to the Employment Tribunal earlier this month, with the Employment Tribunal finding that the claims for unfair dismissal, victimization and sexual harassment were not well-founded.

The Employment Tribunal heard evidence from both parties during the course of the hearing, including from the ex-Managing Director. The Tribunal was told by the company that the Claimant had been suspended from his £180,000-a-year role in February 2012 over allegations relating to his use of company money. He was later fired after it had emerged that he had spent more than £600,000 of the company’s money, including at least £90,000 on cocaine and prostitutes, £80,000 on flights and hotels for family and friends, and £145,000 on personal expenditure on gym memberships, haircuts, massages and clothes. The Tribunal was also told that the director had then threatened to reveal details of the expenditures and of sex companies the company organised unless he was paid £10 million as a severance package. The company rejected this and the ex-Managing Director took them to the Tribunal.

The Employment Tribunal criticized the former employee for bring the claim, stating that he had used the firm as a “private piggy bank” and that “something that struck the members of the tribunal forcibly was how such malfeasance could take place . . . without someone responsible for such matters noticing . . . We have formed the view that the claimant began his policy of embezzlement largely because he discovered he could get away with it”. The Tribunal concluded the judgment by noting that this was a claim that “should never have been brought”.

Chris Hadrill, an employment solicitor at law firm Redmans, commented: “Judging by the reaction of the Employment Tribunal, this is a claim which may have resulted in an award of costs for the Respondent due to the fact that the Tribunal may have viewed the claim as being vexatious, misconceived or unreasonable. Claimants should be careful to take advice on the merits of any claim before they issue a claim.”

Redmans Solicitors are no win no fee employment solicitors and specialist unfair dismissal solicitors.