Crew Clothing is suing former chief executive David Butler over claims he paid himself more than £622,000 in bonuses and other awards that were never signed off.
The fashion retailer has filed a lawsuit against Butler just 16 months after he stepped down following a failed buyout attempt, The Telegraph reported.
Crew Clothing accused Butler of telling its head of HR Rupert Hay that the retailer’s owner Menoshi “Michael” Shina had agreed to pay him hundreds of thousands of pounds in salary increases, bonuses, holiday buy-backs and accommodation allowance rises.
The retailer claimed there was no agreement for these extra remuneration and employment benefits, which were worth £622,560, and that it would “not have agreed” to them. It is seeking compensation.
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It is understood that the High Court has paused Butler’s employment tribunal case for wrongful dismissal against Crew Clothing, which was due to be heard imminently.
In a response to the High Court, Butler’s lawyers argued that he had received “verbal promises” from Shina over aspects including the bonuses.
They said Shina chose not to discuss Butler’s terms of employment and instead acted through parties including Hay, who “discussed and negotiated” on Shina’s behalf.
Meanwhile, on the holiday buy-back, Butler’s lawyers said Crew Clothing instituted a policy for non-furloughed staff during the pandemic to receive payment for unclaimed holiday allowance.
Butler has launched a counter-claim, seeking damages for his wrongful dismissal last April to compensate him for the salary and contractual benefits he would have received if he had been given 12 months’ notice.
The former chief executive’s departure was joined by several senior leaders, which left the retailer without a full leadership team for months.
According to Butler’s lawyers, the ex-CEO had sent Shina a message last April after a wine tasting event and dinner where he had “consumed a lot of alcohol”, in which he said if his proposal was not acceptable “you can assume I resign with immediate effect”.
The lawyers claimed that Crew Clothing should have allowed a “reasonable period of time to elapse” before accepting the messages at face value and that Butler was clear he had retracted them.
A spokesman for Crew Clothing told the publication: “The case in question is a live legal matter and is being dealt with accordingly. As such, we are unable to comment further.”
A spokesman for David Butler said: “David Butler has provided a full defence including detailed evidence refuting these allegations and will continue to vigorously reject the claims made by Michael Shina.”
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