Crew Clothing has initiated legal proceedings against its former CEO, David Butler, alleging that he improperly awarded himself over £622,000 in bonuses and other benefits without the necessary authorization.
This case highlights significant financial and leadership challenges within the company.
Background of the Legal Action
The legal dispute, first reported by The Telegraph, surfaced just 16 months after Butler’s departure from Crew Clothing following a failed buyout attempt.
During his tenure, Butler reportedly informed the head of HR, Rupert Hay, that the company’s owner, Menoshi “Michael” Shina, had approved substantial increases in his salary, bonuses, holiday buy-backs, and accommodation allowances.
Allegations Against David Butler
Crew Clothing contends that these payments, which total £622,560, were never agreed upon and maintains that it would not have consented to such increases. The company is now seeking compensation for these unauthorized payments, claiming that Butler acted without proper approval.
- Unauthorized Bonuses: Butler allegedly awarded himself significant financial benefits without consent.
- Total Payments: The disputed amount reaches £622,560.
Legal Proceedings and Counterclaims
The High Court has temporarily halted Butler’s impending employment tribunal case against Crew Clothing, which was initially set to address his claim of wrongful dismissal. This pause allows the current legal proceedings to take precedence.
Butler’s lawyers argue that he received verbal assurances from Shina regarding the bonuses and other employment terms. They assert that these communications were made through intermediaries, including Hay, rather than direct discussions with Shina.
Holiday Buy-Back Policy Dispute
One of the contentious issues involves Crew Clothing’s holiday buy-back policy. Butler’s legal team claims that during the pandemic, the company had a policy to compensate non-furloughed staff for unused holiday time.
This policy, they argue, was relevant to Butler’s case and supports his claim for the bonuses.
- Pandemic Policy: Compensation for unused holiday time during COVID-19 is cited in Butler’s defense.
Butler’s Counter-Claim for Wrongful Dismissal
Butler’s Counter-Claim for Wrongful Dismissal
In response to Crew Clothing’s lawsuit, Butler has filed a counter-claim for damages related to his wrongful dismissal last April. He seeks compensation for the salary and benefits he believes he would have earned if he had been given proper notice.
His departure, along with that of several other senior leaders, left Crew Clothing without a complete leadership team for several months.
- Wrongful Dismissal Claim: Butler argues for compensation due to alleged improper dismissal.
- Leadership Gaps: The company faced leadership challenges following Butler’s departure.
Dispute Over Resignation
Butler’s lawyers further contend that his resignation was not intended to be formal. They state that his resignation message, sent after an event where he had been drinking, was retracted and should not have been taken as a definitive resignation.
This aspect adds another layer to the ongoing legal battle between Butler and Crew Clothing.
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Responses from Crew Clothing and Butler
Crew Clothing has refrained from commenting extensively on the matter, citing the ongoing legal proceedings. A spokesperson for the company stated, “The case in question is a live legal matter and is being dealt with accordingly. As such, we are unable to comment further.”
On the other side, a spokesman for David Butler asserted, “David Butler has provided a full defense, including detailed evidence refuting these allegations and will continue to vigorously reject the claims made by Michael Shina.”
Conclusion
The legal battle between Crew Clothing and its former CEO, David Butler, underscores significant challenges within the company and raises questions about corporate governance and communication. As the case progresses, it will be crucial for both parties to present clear evidence and arguments to support their positions.
The outcome may have lasting implications for Crew Clothing’s leadership and financial stability.
