IBM bosses wrongly sacked channel salesman after Tech Data joint venture failed, tribunal rules

TSS UK redundancy selection was 'biased, superficial and wholly inadequate'

An IBM salesman was wrongly sacked after being blamed for the failure of a joint venture with Tech Data, being subject to a "biased, superficial and wholly inadequate" redundancy scoring exercise by vindictive sales managers.

Craig Millard won his claim against IBM for unfair dismissal in December 2021, having been turfed out of Big Blue 18 months ago when a two-year secondment to Tech Data ended.

The tribunal's resulting judgment revealed how a combination of high prices, bad management, and a "ground breaking" joint venture that collapsed after achieving just 21 per cent of its sales targets resulted in IBM bosses breaking the law when they got rid of him.

Luke Jones, IBM's UK Technology Support Services (TSS) sales leader, was responsible for awarding Millard poor performance scores (41 out of 100) that led to him getting the professional axe in late 2020. Employment Judge Richardson, presiding at the October 2021 tribunal, noted:

Although Mr Jones knew the claimant personally and they had had a good working relationship previously, he had not line managed the claimant. He knew little of his work in TSS and even less in Tech Data.

Jones compounded this by asking the wrong IBM managers for feedback about the on-secondment salesman, the judgement revealed. Neither of the two he approached had Millard as a direct report (John Breslin, the one who filled in Millard's scoresheet for Jones, wasn't even in the same division) and none had read the secondment agreement which said Millard was to "place his allegiance to Tech Data."

Breslin told Jones that Millard "had been rude to him at a meeting in 2019." Jones also spoke to a Ms Corbett, who had accused Millard of bullying her that year. The judge noted: "The grievance was not taken any further. The claimant had no knowledge of Ms Corbett's allegation of bullying and was not given an opportunity to respond to the allegation prior to it being taken into account in the selection criteria scoring."

Condemning Jones for behaving in a "grossly unfair" way, Judge Richardson continued: "It did not occur to Mr Jones that Mr Breslin's input to the redundancy scores might have been tainted by a personal bias against the claimant… in fact Mr Jones had very little evidence to support the ranking scores."

Jones went on to break IBM's internal rules by refusing to show Millard the supporting evidence for the poor scores. In fact the only evidence he had was an email from one of the managers who wasn't responsible for Millard, along with what the tribunal was told were "key financials" from the joint venture.

The luckless Global Technology Services (GTS) salesman was selected for redundancy despite managers not having carried out his annual appraisal since 2017, breaching not only IBM's own HR rules but also the terms of its JV with Tech Data.

Millard will receive a compensation payout set at a future hearing, though Judge Richardson ordered that his compensation should be halved if a fair redundancy procedure had been followed.

Undersold

As part of IBM's Champion for Growth Secondment Programme, channel man Millard had been posted to Tech Data in 2019 to help the distributor sell more IBM-branded kit. In December 2018 he had convinced the firm to enter a joint venture with IBM codenamed Project Maria.

Under Project Maria, if Millard, of GTS's TSS sub-division, didn't convince Tech Data to sell enough IBM equipment or move enough of its customers onto IBM and away from rivals, the distie "had to pay a penalty to IBM."

The JV didn't go well. An IBM consultant, named in the judgment as a Mr A Joseph, was brought in to find out why Project Maria sales lagged behind its revenue targets. Despite being told by IBM that the JV had senior management support, Joseph found: prices were "too high"; there wasn't any effective marketing from either IBM or Tech Data about Project Maria; and its sales targets were so "challenging" the JV would never succeed unless its costs were cut.

Whatever sales were won through Project Maria, Joseph found, were only going through thanks to a UK-specific "special bid" procedure where senior managers had to sign off on lower prices. Millard agreed with Joseph, having told his Big Blue bosses that IBM was losing business because prices were "unacceptably high" and rivals such as Cisco were "undercutting" IBM's pricing.

Nonetheless, at a key 2019 meeting, Millard's Tech Data line manager Ian Jeffs, along with IBM's Dave Walsh (then TSS's director of technology, now veep of security sales) and Jane Patel (then TSS's vendor business leader, now a security software sales leader) all agreed that IBM prices would stay high.

"The senior management decision appeared to be that the claimant was to carry on doing what he was doing and push harder to get the results needed," wrote Employment Judge Richardson.

Redundancies

As the COVID-19 pandemic gripped the world in early 2020, IBM started sharpening its layoff axe. TSS was "experiencing declining profit and revenue and was forecast to miss all of its 2020 profitability targets," as the judgment recounted, and in February TSS managers decided to make 101 redundancies. Millard was one of them.

Out of the pool of 44 TSS salesmen at risk of redundancy, nine were to be handed their P45s. Millard's scores took a big hit when senior IBM saleswoman Patel told Millard's line manager Jones that Project Maria, Millard's baby, had "only achieved 21 per cent of one of its yearly baseline targets."

Stung when he was told of the scores, Millard dug his heels in and said bosses should have made "a fair assessment" of Project Maria as a whole and not just blamed him for its failure. Nonetheless, Jones heaped blunder on blunder and insisted the redundancy meetings were not "for debating the ranking/scores, but were only for queries on the process and to help with redeployment within IBM," something the judge condemned as "completely wrong."

An IBM HR worker, named only as Mr Frisby, "took the simplistic view" that as Millard was a salesman his value to the business was measured in profit, and as Project Maria was a failure therefore Millard was also a failure. The HR man failed to carry out a proper investigation into Millard's appeal against redundancy, despite having some concerns about the near-total lack of evidence Jones had for sacking the channel salesman.

IBM has been a regular feature in Britain's Employment Tribunals, appearing as a defendant in numerous cases over recent years. In August 2020 a tribunal told Big Blue to teach its managers the meaning of "discrimination," awarding a victimised whistleblower £22,000. Shortly afterwards a third-line support engineer won his case that a malicious manager wrongly made him redundant despite having just two people to pick from.

And in 2019 IBM settled with 281 people suing it for age discrimination, part of a wider company strategy being examined in numerous cases in the American courts. ®

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