On occasions, an ET (Employment Tribunal) case comes into the public domain and when you read the headline, you think this is a quite straightforward unfair dismissal case where the Claimant is successful. Well in some ways yes, the Claimant in this bizarre case is as he was successful in his claim of unfair dismissal due to a procedural fault by the Respondents, until you read on and then you start understanding the extraordinary circumstances, and finally the ET (Employment Tribunal) judgement, where in the end he isn’t awarded financially. A reminder that paper trails are a necessity to be able to defend claims successfully.
“A senior executive sacked after trying to claim £60,000 on expenses with three years’ worth of receipts in a shoebox has won his unfair dismissal case.
Underperforming Paolo Porchetti – who raked in £110,000 a year – was offered a lucrative settlement package by his bosses to leave the company after they became ‘immensely frustrated’ by his consistently poor work.
But the high-earning regional director then stunned managers by submitting a huge expense claim, returning a company car that needed thousands of pounds worth of repairs and a broken laptop.
Shocked by his behaviour, Mr Porchetti’s bosses abandoned negotiations and fired him instead.
Last week the sales director won an unfair dismissal claim after an employment tribunal ruled his sacking had procedural faults.
The hearing was told the Italian – who has an MBA – began work as a sales director at engineering giant Brush Electrical Machines in 2015.
The tribunal in Nottingham heard that the company invested ‘significant cost’ in relocating Mr Porchetti to Kuala Lumpur, Malaysia, with a generous package which included a £20,000 signing-on bonus, a company car, regular flights to Europe and accommodation allowance.
In the Malaysian capital, Mr Porchetti was sales director for the Asia Pacific region – but it was heard bosses soon grew frustrated with him.
He repeatedly scored around 30 per cent on monthly personal objective scores, was regularly late for meetings, was tardy in replying to big customers, neglected work, and ‘seemed to go missing’.
His territory was described as the worst-performing in the company and one worker even resigned due to a lack of work and ‘challenge’ under Mr Porchetti.
His line manager Marco Van Schaik urged Mr Porchetti to ‘put some more effort in’ and told the hearing the only reason he achieved one financial target ‘was by luck because a customer placed a large order in the value £700,000’.
The tribunal heard Mr Porchetti was focused undertaking an MBA in Hong Kong – where his partner lived – and repeatedly flew out there for a week at a time despite there being little work there.
By May 2019, a senior Brush boss invited him to a meeting – which he was 45 minutes late for – and offered him a settlement agreement to depart the company with six months’ salary.
Mr Porchetti accepted but didn’t reveal he had a £60,000 expense claim ‘because he knew it would jeopardise the settlement discussions’.
The tribunal’s judgement said: ‘Mr Porchetti mentioned that he had three years’ worth of expenses to claim, the receipts/evidence for which he had kept in a shoebox.
‘[But he] deliberately chose not to disclose or reveal the extent of them at that stage because he knew it would jeopardise the settlement discussions.
‘Thereafter, Mr Porchetti returned his rental car in a damaged state and, despite being obliged to report any damage to Brush, the hire company and the local police, he had failed to do so, showing little respect for property or local laws.
‘Mr Porchetti returned his laptop in a highly damaged condition but failed to return his iPad.
‘Shortly thereafter, Mr Porchetti submitted his outstanding expenses which amounted to £59,252.43, with some claims dating back to late 2015/2016.
‘Brush was shocked by both the amount of expenses claimed and the fact Mr Porchetti had failed to submit them earlier in accordance with the expenses policy which requires any expenses to be submitted within 14 days.
‘Brush refused to make full payment in respect of the expenses – it limited its offer to £10,000 – and the settlement negotiations broke down.’
Instead of paying him off, the company decided to sack him.
A dismissal letter to Mr Porchetti said, ‘you have not been able to deliver any significant improvement’ on key areas of work and ‘we have seen a steep decline and have questioned several times your level of engagement’.
It also said: ‘Your relationship with our local partners and agents in the local market which have worsened significantly due to your lack of professionalism and inability to reply on time to enquiries and maintain a proper business relationship.
‘I also must refer to your behaviour, regularly turning up late at meetings, not filing your expenses in time if at all and the disastrous state of the company property you returned at the end of May, including iPad missing, broken laptop and severely damaged car.’
Employment Judge Victoria Butler ruled Brush was right to dismiss Mr Porchetti but said it was unfair because it was carried out quickly and lacked proper procedure.
Judge Butler added: ‘The predominant reason for Mr Porchetti’s dismissal was capability and it is clear… that his performance was poor.
‘This was apparent from early on in his employment when he failed to supply documents required to support his visa application in a timely manner – a simple, yet crucial, task – thereby demonstrating his inability to prioritise matters.
‘The same can be said of Mr Porchetti’s failure to submit his expenses over a three-year period amounting to circa £60,000.
‘The Claimant’s neglect in doing so was not only another example of his inability to keep on top of things.
‘He willingly entered into without prejudice negotiations but deliberately withheld vital information about his expenses.
‘He would have signed the settlement agreement happily if Brush had paid them. Brush had no idea that he had accrued such a significant amount of expenses and was reasonably not prepared to pay them.
‘The fact that Mr Porchetti had failed to comply with Brush’s policy led to the breakdown of the settlement negotiations and therefore his dismissal. He was the author of his own misfortune.’
Mr Porchetti won an unfair dismissal claim but will not receive any compensation because he was judged to have contributed to his sacking. Brush must also pay him a two-week wage sum which went unpaid in July 2019. He lost a separate claim of race discrimination.”
If you want to read the actual ET judgement (it’s a long read) which resulted in a quite drawn-out hearing legal fees and the Respondent’s management time, you can find it here: