Coffee company ordered to pay €70,000 to salesman

A Dublin firm which sells coffee-dispensing machines has brewed up trouble for itself over its treatment of an employee and has been ordered to pay out €70,000 to the man.

This follows the Employment Appeals Tribunal (EAT) finding that Scanomat Ireland Ltd’s approach was to freeze long-serving salesman, Derek Beglan, out of the company by setting unrealistic targets which made his position untenable.

In the case, the EAT reported that Scanomat managing director Corrado Morelli-Carroll was prepared to land Mr Beglan with a sales target of €1m for 2012 — an 69% increase on 2011.

Mr Beglan told the tribunal that he served with Scanomat for 12 and a half years and “did not want to walk away” but he was at the end of his tether and his wife had encouraged him to leave.

The EAT report records that “he had been passionate about the company. He felt demeaned by the company. He was certified unfit for work and proposed that his employment should end on 16th March 2012”.

Since the termination of Mr Beglan’s employment, he has been interviewed for 10 different positions, but was unsuccessful in securing an alternative position.

On April 15, 2013, Mr Beglan set up his own small coffee business.

In his case before the tribunal, Mr Morelli-Carroll stated that he was unhappy with Mr Beglan’s sales in 2011 and that he needed to increase that figure. Mr Morelli-Carroll said that at the time he needed to maintain and grow the business as the firm had suffered losses and the family had put money into the business to make it sustainable.

The EAT report recorded that it was only on March 13, 2012 Mr Morelli-Carroll became aware that the claimant had been suffering from work-related stress on two previous occasions. When the claimant tendered his resignation that day Mr Morelli-Carroll wrote immediately to the claimant and asked him to reconsider his position and gave him seven days to do so. He was willing to discuss matters further with the claimant.

In its determination, the EAT found that the firm appears to have set unrealistic targets for Mr Beglan which by any standards would be impossible to achieve.

The report states: “Based on the minutes of the meetings, there appears to have been no real consultation with the claimant regarding the setting of realistic sales targets for him.”

The EAT said that the firm appears to have increased the claimant’s targets by 69% (agreed at the hearing by both sides as the correct figure) at a time when sales had been reducing for a number of years.

The report states: “Notwithstanding a request to bring in outside mediation (the LRC) the respondent ignored this request and adhered to his original position. It appears to the tribunal that this approach taken by the respondent was an effort to freeze the claimant out of the company by setting such unrealistic targets which made his position untenable.”