Ex-Swansea City directors’ £108k job-loss payout
TWO former Swansea City Football Club directors found to be unfairly dismissed by the club have been awarded a combined compensation of more than £108,000.
A hearing took place at Cardiff Magistrates’ Court following an earlier employment tribunal - held over a week last December - which unanimously judged Steve Penny and Donald Keefe’s claims of constructive unfair dismissal were “wellfounded”.
Judge Cadney awarded Mr Keefe £78,962 compensation, whilst Mr Penny received £30,000.
Both men were given a further basic award of £10,059 each.
At the so-called remedy hearing, two issues were determined by the judge.
The first was whether there should be a ‘Polkey deduction’ - a deduction from compensation received based on the likelihood that the claimants would have resigned in any event had they not been unfairly dismissed.
The judge secondly considered a fact he said was ‘not essentially in dispute’ that neither Mr Penny or Mr Keefe had made attempts to mitigate their losses by obtaining alternative employment, and whether compensation should be reduced as a result of this.
Swansea City felt there should be a ‘Polkey deduction’ of 100% in the case of Mr Keefe, and 50% in the case of Mr Penny.
The club’s basis for its argument was that in the earlier hearing, Mr Keefe gave evidence that unless Swansea City was prepared to allow him to continue as a director, that he would have resigned.
In the case of Mr Penny, the argument was that, whilst he was not quite so forthright in his evidence, there was a high probability that he too would have resigned in any event.
On the second point, the club claimed both men should have been able to replace some or all of their income within a matter of months.
The hearing was told previously that both men had been directors of the club and members of the board which had managed its affairs, and were involved in major decisions such as the move from the Vetch Field to the Liberty Stadium in 2005.
They had played a key role in helping to safeguard the future of the club in the wake of Tony Petty’s stint at the helm.
As part of a takeover of the club by a consortium led by American businessmen Jason Levien and Steve Kaplan in 2016, it was decided that only shareholder directors would remain on the board, meaning that as non-shareholder directors both Mr Penny and Mr Keefe would have to resign from their positions.
Mr Levien took the view the board of directors was too large and needed to be smaller to be more effective and manageable, with only those who had “skin in the game” to remain on the main board, with the right to a board seat being 5% ownership.
But Mr Penny and Mr Keefe argued that, irrespective of any other breaches, the fact it was intended to remove them as directors was sufficient to amount to constructive dismissal.
Judge Cadney said: “In my judgement, had there been discussion or consultation, given the history of the claimants’ involvement with the club and their contribution to its success, that it is irrefutable that they had made a contribution perhaps beyond that of a financial contribution reflected in a shareholding, and it is not beyond the bounds of possibility that the respondent (Swansea City Football Club) could in the very unusual circumstances of this case have been persuaded to allow them to remain as directors for the balance of their fixed term appointments to July 2018.
“Certainly in my judgement such a proposition should have at least been considered.
“Even if the respondent maintained its stance, in my judgement any consultation or discussion would then have moved onto the question of whether there was some other way of reflecting the contribution the claimants had made to the club over the years before the takeover.
“There are many ways that professional sports clubs can reflect the contribution of former players, coaches and others to the club including honorary or ambassadorial roles amongst other means, all of which could have been discussed so as to reflect the claimants’ contribution even if they were not to be retained as directors.
“It follows that in my view it was not inevitable that the claimants would have resigned whatever the outcome of any consultation.”
He said there had been a complete failure to consult or to discuss any of these matters with the claimants.
“It appears to me that in those circumstances what the respondent is effectively inviting me to do is to attempt draw reasonable conclusions as to the likely destination of a ship which has not only not yet left harbour but whose crew have not even embarked.
“The exercise is so riddled with uncertainty that no sensible prediction can be made and it follows that in my view it is not possible to assess, or therefore make, any Pokey deduction.”
With regard to the second point he considered, regarding whether the claimants would have been able to offset their losses by finding new employment, he added: “The difficulty I have is that there is no evidence at all of what work, at what salary and where such employment should have been available to them.
“There is no evidence of the existence of any jobs at a lower salary in or about Swansea or in any wider area.
“In effect I am being asked simply to assume that such jobs existed,” said the judge.
“Despite the fact that it is undoubtedly true that both Mr Keefe and Mr Penny are highly qualified professional men, there is simply no evidence that would allow me to draw any conclusion as to when, if they had sought to mitigate their loss that they should have been able to do so, and if so to what extent.
“Accordingly it appears to me to be impossible to make any finding that there has been any failure to mitigate their losses.”
A Swansea City spokesman said: “As previously stated, the club was satisfied with the outcome of the original tribunal findings.
“We appreciate Mr Keefe and Mr Penny’s past contributions to the club, and will have no further comments on this matter at this time.”