Elon Musk and Ireland’s record Unfair Dismissal payout

Mr Gary Rooney, who had been employed by Twitter in Dublin since 2013, failed to respond to an email from Elon Musk shortly after his takeover of the social media platform in October 2022, calling upon his staff to be “extremely hardcore”. 

  

The email said: “This will mean working long hours at high intensity. Only exceptional performance will constitute a passing a grade.  If you are sure that you want to be part of the new Twitter, please click yes on the link below,” adding that staff who did not would receive three months’ severance pay. 

  

Employees were given 24 hours to respond to the email. Mr Rooney did not respond and three days later, on 19 November, he received another email from the company “to acknowledge your decision to resign and accept the voluntary separation offer”.

  

The WRC adjudicator said that Musks 24-hour period for replying to his ultimatum was not reasonable notice and concluded that the failure to click “yes” on Musk’s email could not be considered an act of resignation. Mr Rooney was available and willing to work but was unjustly prevented from doing so by the company.

  

The ruling emphasised that X’s interpretation of Mr Rooney’s non-response as a resignation was legally flawed. There were no substantial grounds to justify his termination and the dismissal was unfair. The award reflects the significant f​​inancial losses Mr Rooney suffered; it took him 10 months to secure new employment and this was on a significantly lower salary.

The case indicates the importance of the employer having a fair reason for dismissal and following a fair procedure so as to avoid a finding of unfair dismissal. A fair reason can be: 

Where the employer has established one of the potentially fair reasons for dismissal, a tribunal will then consider whether it acted reasonably in all the circumstances (taking into consideration the size and administrative resources of its undertaking) in treating that reason as a sufficient reason for dismissal. 

  

Employers who are contemplating dismissing an employee should follow the ACAS Code on disciplinary and grievance procedures to avoid an uplift of up to 25 percent of a tribunal award if the employee successfully brings a claim for unfair dismissal. The Code sets out requirements for an even-sided investigation, advance notice of allegations and the right to respond, amongst other things. 

In Ireland, the maximum amount of compensation an employee can receive for unfair dismissal is two years’ salary, as long as they have suffered a financial loss. The compensation is calculated based on the financial loss the employee incurred as a result of the dismissal such as, future loss of earnings, immediate loss of earnings, loss of employment rights, and loss of benefits and pension rights. 

  

In England and Wales however, unfair dismissal is capped at 21,000 pounds for a basic award which is based on an employee’s salary, length of service and age, and 115,115 pounds (or a year’s gross pay whichever is lower) for a compensatory award to compensate any financial loss – an overall maximum of 136,155 pounds. So whilst we won’t see an unfair dismissal award of this magnitude here, this is a reminder that a failure to have a fair reason for dismissal and to follow a fair process can cost an employer dearly, particularly if, as in Mr Rooney’s case, the employee struggles to find a comparable role in a timely manner or at all.  ​