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Cloud Direct stung for £80k in constructive dismissal lawsuit after director's 'insincere' evidence to tribunal

'Shambolic', 'unfair', 'wholly incorrect'... all because they wanted rid of their sales manager

A UK cloud reseller that tried to fend off an unfair dismissal lawsuit by giving “knowingly untruthful” evidence to a judge has been ordered to pay more than £80,000 by the Employment Tribunal.

Employment Judge Jonathan Walters said Cloud Direct’s chief customer officer Ian Bowen was “evasive and disingenuous, i.e. less than candid and insincere,” adding in a judgement made available last month [PDF]: “Perhaps the Tribunal was being too polite.”

The judge’s wrath was sparked during a constructive unfair dismissal claim brought by Cloud Direct’s former sales manager Ben Smart. Smart quit the business after Bowen and chief exec Brett Raynes told him to accept a demotion or be “performance managed” out.

Bowen and Raynes’ constructive dismissal of Smart was “shambolic and unfair”, the tribunal ruled, awarding Smart £65,000 in compensation and a further £16,000 in legal costs.

On top of that, the Azure Expert managed service provider's chief exec happily presented falsehoods to the tribunal – to the point where Cloud Direct’s own lawyers were found to be acting on “wholly incorrect” instructions from the firm.

A gobsmacked Judge Walters said, in his latest judgment in the long-running case, that Raynes had made a written witness statement and sworn its contents were true: “Then, almost without demur and within about five minutes of cross-examination commencing and with a degree of nonchalance seldom seen by a witness of his intellect, he agreed with pretty much the whole of the alternative version of the conversation as advanced by the Claimant in his witness statement.”

Raynes’ statement was a pack of lies, the judge was saying – and the CEO himself admitted it when questioned under oath. It is rare for courts or tribunals to make such damning findings against witnesses, and it is a shame that it happened in a case involving an IT company.

‘Hopeless’ case, £80k payout, ‘fudged’ grievance

The tribunal case, which ran until January this year, could have been avoided if Raynes and Bowen hadn’t cooked up a pack of lies to justify their constructive dismissal of Smart.

Judge Walters said in the case’s final judgment: “Had one or other of them told their legal advisers the truth at the outset or at any point before giving evidence, they would have received advice that their case on unfair dismissal was hopeless.”

In August 2018, Cloud Direct was in a busy period. It had bought out a number of smaller competitors and was under pressure from investors “who knew that the company was not meeting the growth targets which had been set.” Raynes and Bowen therefore decided to get rid of their sales manager.

They summoned Smart to an “unscheduled” meeting on 13 August where he was on his own. After being offered demotion back to a bog standard salesman’s job, Smart asked what would happen if he refused to take the junior role. Bowen replied: “We will have to go down the performance route out.” Smart refused, saying his team had met all their targets for the year so far, only for Bowen to reply: “In that case it will take 48 hours to start the performance process and you will have the right to be accompanied to the meeting.”

Smart submitted a grievance about his treatment. This was investigated by a Mr Wigley, who, in the judge’s words, “fudged” it to avoid making findings “which were adverse to the senior personnel in the business”. Undeterred, Smart appealed. Finance director Jane Hall oversaw that – and the judge ruled she “had no intention of conducting a fair and proper grievance appeal”, merely siding with her bosses and wrongly dismissing the grievance.

Cloud Direct, a trading name of On Direct Business Services Ltd, failed to respond to an email from The Register seeking comment. The judgments can be found here. ®

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