A former director of a firm which makes satellite radar components in Limerick has accused its management of anti-Irish discrimination — alleging it gave UK staff on his level double the stock options he was offered.
The former group communications manager of Arralis, Keith Kerley, who was also the general manager of its Irish operation, says he had expected to get 3,000 shares in the firm upon its flotation — but had dropped down two tiers to 750 when option letters were issued in early 2021.
He claims its UK-based chief executive told him to “take it or leave it” when he complained about the options.
Mr Kerley has lodged complaints under the Employment Equality Act 2000 and the Unfair Dismissals Act against Arralis Ltd alleging discrimination on the grounds of race and constructive dismissal.
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Arralis, which makes extremely high-frequency radio equipment and radar systems for clients including the European Space Agency and the British Ministry of Defence, has denied the claims.
Mr Kerley said he had been on an “upward trajectory” in the firm up to Christmas 2019, having been promoted to the “C-level”, reporting directly to chief executive Mike Gleaves.
As a result he had attended management meetings in summer 2019 and was privy to a staff stock option plan he said Mr Gleaves had presented to the company’s shareholders in Hong Kong in advance of a planned flotation.
Mr Kerley said in evidence that he thought he was in line to get 3,000 shares — but received an offer letter with just 750.
Mr Kerley’s solicitor, Siobhán McGowan, said her client also became aware that other staff in Limerick had received “significantly less stock” than expected.
I barely had time to eat my lunch never mind respond. I expressed concern that it was a demotion but said I was happy to work on
He said he texted a department head in the firm’s main UK office in Swindon to ask “What the hell is going on?”
Mr Kerley said he considered this colleague to be on the same level in the company structure as he was.
Mr Kerley said that manager said he received 1,500 options on shares — twice as many as him.
“One member of staff in Limerick received 1,500 — the only non-Irish member of the Limerick office,” Ms McGowan said — an engineer who she said was the holder of a UK passport.
Her client said in his evidence that the engineer was from Northern Ireland and it was his belief that the man was a dual passport holder.
The company’s management denied discriminating against any staff in the Irish branch and maintained that the worker who received the higher share allocation in Limerick held an Irish passport.
Mr Kerley said the longest-serving employee in the company after the CEO was also based in Limerick and had been offered just 300 shares at the time.
Another engineer in the UK office, who subsequently left the firm, told him she had been placed in the 1,500-share bracket.
“I was basically told that those stock options weren’t standard, that your position didn’t matter, it was performance. I’d had only an upward trajectory. I was one of the longer-serving staff with four years’ service — it wasn’t really explained properly,” he said.
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In evidence, Mr Gleaves said the stock plan presented in May 2019 was only ever a proposal at that stage and remained subject to change up to the point Mr Kerley resigned from the company and afterwards.
It was the company’s case that the stock option letters sent out the following spring were subject to change too.
Mr Gleaves said the higher share options letters that spring were mostly sent to senior engineers in line with the instructions of the shareholders.
Cross-examined on this point by the complainant’s barrister, who said there was no documentation submitted in evidence to support that explanation, Mr Gleaves said: “No, and why would you have it?”
“I put it to you that in order to defend your position you would need it,” Ms McGowan said.
“I’m not defending anything — I’m being accused of doing something that’s not true,” the chief executive said.
Anna Butler of Peninsula Law said the share scheme was “always identified as being at the proposal stage” and could be “changed at the discretion of the firm”.
The stocks were eventually distributed using a different allocation scheme based on employees’ length of service, Mr Gleaves said.
The WRC was told that the shares row erupted as a plan to close the firm’s Limerick operation on the instructions of the Hong Kong investors had been averted by a company restructuring.
Mr Kerley said in his evidence that the primary reason the office had stayed open was because a key engineer there had refused to relocate.
Mr Kerley ran his case on the unfair dismissal complainant as a lay litigant, without the assistance of his solicitor.
He said “everything went pear-shaped,” when Mr Gleaves phoned him up on his return from the Christmas holiday and relations deteriorated until he felt he was left with no alternative except to resign in July 2021.
He claimed he was effectively “demoted” and made answerable to a sales and marketing manager based in the UK who he said had “no marketing experience”.
The CEO said in his evidence that the Limerick operation was loss-making and that the Hong Kong investors wanted it shut down — but had agreed to a counter-offer involving a company restructuring.
Mr Kerley said Mr Gleaves emailed him in February that year to say that his role would be changed under a “new company structure”.
It’s not a demotion, it’s a change in reporting lines
His evidence was that he corresponded by email with Mr Gleaves over the course of less than an hour, and argued he wasn’t properly consulted on the changes.
“I barely had time to eat my lunch never mind respond. I expressed concern that it was a demotion but said I was happy to work on,” he said.
The tribunal was told Mr Gleaves replied that day to say: “It’s not a demotion, it’s a change in reporting lines.”
“No grievance was raised — displeasure, yes, but the formal grievance process was not used by the complainant,” Ms Butler argued on behalf of the respondent.
“Following the serious allegations made to the shareholders I could see Mr Kerley was upset. I thought he should speak to someone outside the company. The breakdown between myself and Mike [Gleaves] and Mr Kerley was clear,” the firm’s HR director Jo Bown said.
She said Mr Kerley didn’t raise any formal grievances and that any matter he raised on 1st March was “addressed” at the meeting, she said.
He resigned without taking up the offer of raising the matter with an outside HR consultant, she added.
Adjudicating officer Conor Stokes closed the hearing to consider his decision.
