WRC highlights risks of failing to formalise executive contracts and breaching core employment rights

In one of the most striking employment law rulings this year, Ciara Donlon, founder of Theya Healthcare Ltd, was awarded €84,423 by the Workplace Relations Commission (WRC) after being constructively dismissed following an alleged “aggressive takeover.”

This case, involving a CEO-level appointment with no contract, shines a light on serious procedural failings, and reinforces the need for businesses, including startups and investor-led ventures, to take employment obligations seriously at all levels of the organisation.

Breakdown of the Award

• Constructive Dismissal (Unfair Dismissals Act): €67,500
  
• Unpaid Wages (Payment of Wages Act): €10,000
  
• No Written Contract (Terms of Employment Act): €6,923
  
• Total Awarded: €84,423

What Happened

• Ms Donlon, who founded Theya Healthcare (a post-surgery clothing brand for breast cancer patients), was rehired as CEO after the business assets were acquired in early 2023.
  
• She was promised a €90,000 salary + €20,000 expenses off the books, and 40% shareholding in the new entity.
  
• Despite this senior role, no written contract was ever issued — and her pay was later stopped without explanation.
  
• She continued working out of loyalty, but was ultimately excluded from salary payments while other staff were paid.

The WRC found that this was a fundamental breach of contract and that Ms Donlon had no option but to resign, thus constituting constructive dismissal.

Where the Employer Went Wrong

1. No Written Contract for a CEO

Despite her seniority and shareholding promise, Ms Donlon never received a written contract — a clear breach of the Terms of Employment (Information) Act.

Best Practice: Every employee, regardless of seniority, must receive a written contract within 5 days, including role, pay, duties, and reporting lines.

2. Withholding Pay Without Lawful Reason

The employer withheld her salary and expenses while continuing to pay other staff, a move the adjudicator called a clear repudiation of contract.

Best Practice: Never withhold or alter pay terms without written agreement and lawful justification. Doing so opens the door to constructive dismissal claims.

3. Failure to Manage Executive-Level Conflict

Tensions between investors, directors, and founding employees escalated into mismanagement and pay disputes, resulting in the loss of key leadership and reputational damage.

Best Practice: Use external HR advisers to navigate changes in ownership or leadership, and to ensure employment laws aren’t breached during restructuring or investment negotiations.

Key Lessons for Employers

Constructive dismissal isn’t just a risk for junior staff, CEOs can claim it too.

This case reminds us:

• Verbal promises won’t protect your business
• Pay changes must be agreed and documented
• Executive appointments must still follow contractual and legal requirements

How Bloom Consultancy Can Help

We work with employers and investor-backed startups to:

• Draft clear executive contracts and shareholding agreements
• Conduct HR due diligence during acquisitions and restructures
• Manage disputes involving senior staff or founders
• Provide WRC preparation and response services

This article is based on public decisions of the Workplace Relations Commission and reported case summaries from Irish media sources. It is intended as a commentary on HR compliance issues relevant to employers and HR professionals in Ireland.