Dundalk regtech start-up must pay co-founder €8,000 for dismissal

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Dundalk financial services start-up Gecko Governance has been ordered to pay almost €8,000 to one of its co-founders, who claimed before the Workplace Relations Commission (WRC) that his dismissal was a ” deception”.

Former CTO Mark McHugh said he clashed with other founders of the Enterprise Ireland-backed start-up when they turned away from governance software for hedge funds to pursue the technology of the blockchain and create a cryptocurrency.

The details were revealed at an arbitration hearing last October after Mr McHugh lodged claims under the Unfair Dismissal Act and the Organization of Working Time Act against Gecko Operating Ltd , with a registered address at the Dundalk Institute of Technology Regional Development Centre, Dublin Road, Dundalk, County Louth.

Mr McHugh said he was involved in a project with one of the directors and met potential clients with him before the company was founded and became employed in June 2017. He said he signed a contract working appointing him technical director that December.

Mr McHugh said the company’s main product was a software package that handles the governance of hedge funds – known in the industry as regtech – and it was his job as chief technical officer to maintain it.

But he said there were ‘difficulties’ early on in his job as he felt the sales team was not performing well, he lacked the technical experience to sell to potential customers. and that a member of its support staff had been terminated.

He said there was a push in the business to pursue “blockchain technology and cryptocurrency creation.”

Mr McHugh felt it was an ‘extremely volatile and legally unsound’ business that fell outside their business plan, he said.

He said another founder told him in a January 2018 meeting that the company would not be pursuing blockchain, but then discovered emails contradicting this – leaving him feeling he was “put apart from the business.

Mr McHugh said that at the time he was struggling to maintain the original software service due to a lack of resources and his requests for additional staff were ignored.

‘Broken-down’

In May 2018, he said, his relationship with the other co-founder had “completely broken down”, and after a mediation process he agreed to step down as CTO but stay on as CTO. than employee.

The following year, in October 2019, the company’s main client for hedge fund software announced that it would be canceling its contract, Mr McHugh told the commission.

Mr McHugh believed the contract could have been saved if the company had made it a priority.

Then, in May 2020, Mr McHugh was informed that his position was being terminated. He told the committee, however, that he understood that a new technical director had been hired after he was removed from office to fulfill his role.

Lawyer David Montgomery, for Mr McHugh, argued there was no real dismissal situation and the process was a “cover” to fire his client for interpersonal issues.

He argued the proceedings were “fundamentally flawed” because Mr. McHugh had not been offered any right of representation or remedy.

The company argued that the loss of a major contract meant that cost-cutting measures were needed to ensure the viability of the business.

It was argued that the company no longer needed to maintain the software managed by Mr McHugh and had also decided to outsource “the majority of their technical needs”.

She denied unfair dismissal on the basis of a “fictitious dismissal” and argued that it was properly executed.

In his decision, arbitrator Brian Dolan said it was “unusual” for a co-founder and shareholder of the company to file such a complaint.

Mr McHugh clearly disagreed with the direction taken by the company which ultimately led to management invoking redundancy proceedings, he wrote.

“It appears that Complainant, and Complainant only, was deemed terminated,” Dolan wrote. “No other cost-saving measure or alternative to dismissal was considered at any time.”

‘Inconceivable’

It was “inconceivable” that a company like Gecko, involved in providing software to end users, “would not have a role for an employee of the complainant’s talents, especially since those skills are in short supply in the labor market,” Mr. Dolan added.

He said the hiring of a new technical director proved the role was not redundant and the dismissal was “procedurally and substantially unfair”.

However, Mr Dolan said he had heard no evidence of an effort by Mr McHugh to secure new employment and had to conclude that he had failed to mitigate his losses – limiting it to an allocation of only four weeks of salary.

He ordered Gecko to pay Mr McHugh €5,384.31 for the unfair dismissal.

Mr Dolan also upheld a claim for non-payment of €1,076.80 in annual leave entitlements upon termination of his employment and made an order for payment of that sum and an additional €1,500 – bringing the sum total awarded to Mr. McHugh in auction. at €7,961.11.

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