Well-respected internet firm boss unfairly dismissed after profits...
The boss of an internet firm which provides services across Lancashire was unfairly dismissed after his superiors raised concerns about profits plummeting. Paul Stobart was promoted to the position of chief executive of Zen Internet by the firm's founder Richard Tang. The company had been set up in 1995 and had a long history of increasing profitability but by 2020 Zen was making a loss.
Although Mr Tang began expressing his concerns about profitability with Mr Stobart from 2020, he was "very positive" with his performance. Mr Tang said in a performance review in 2022 that the company was "financially unsustainable" but also said "I’m very happy with where the business is and where is is going, and the job that you are doing to get it there".
In early 2023, Mr Tang suggested to Mr Stobart that he revert to his former position as chairman while the founder would be reinstated as chief executive. While Mr Tang recognized Mr Stobart's talents, he told him he was "not prepared to give you any more chances". In an email Mr Tang sent to Mr Stobart, he said: "I’ve lost confidence in your ability to lead the business back to sustainable profitability. I have lost count of the number of times you’ve represented profitability goals to me (and the board) that you have then not delivered. I’m not prepared to give you any more chances. Sorry."
Legal Battle
In March 2023, the board of directors, led by Mr Tang, decided to issue a termination of Mr Stobart's employment. He subsequently brought an employment tribunal claim on the grounds that he was unfairly dismissed.
Employment tribunal documents show that Mr Stobart believed his employment as chief executive was being terminated so Zen did not have to fulfill its bonus obligations. The employment judge said that despite Mr Stobart's level of seniority, he was still classed as an employee, and the correct process was not followed before issuing the termination.
At a hearing held in Manchester, the employment judge concluded: "My finding in this case is that Mr Stobart as claimant was unfairly dismissed by the respondent Zen Internet Limited in that although the potentially fair reason of capability was correctly raised by the respondent, they rendered the dismissal unfair by failing to follow a fair procedure. However, the dismissal would have been fairly dismissed by no later than 31 May 2023 had a fair process been applied by reason of the claimant’s capability arising from his poor performance."
