Sidelining a Managing Director by Restructuring: Contractual Limits and Injunctive Relief in Kelly v Store All Logistics Ltd [2025] IEHC 653

1. Introduction

The High Court decision in Kelly v Store All Logistics Ltd [2025] IEHC 653 (Kennedy J) is a significant addition to Irish employment and company law, particularly in relation to:

• How far a board of directors may go in restructuring the role and reporting lines of a Managing Director (MD) without breaching the employment contract; and
• When such a breach will, or will not, justify an interlocutory injunction restoring the previous position.

The judgment recognises that a radical change to an MD’s reporting lines and access to information can amount to a fundamental contractual breach, akin to constructive dismissal, even if the employer is genuinely trying to protect the business and staff. Yet, the Court simultaneously refuses interlocutory reinstatement, finding that the balance of justice favours leaving the new structure in place and compensating the MD with damages if he ultimately succeeds.

In doing so, Kennedy J refines and qualifies the impact of Earley v HSE, emphasises the limits of s.173 Companies Act 2014 as against employment contracts, and articulates a nuanced distinction between:

• a disciplinary sanction (requiring fair procedures), and
• a business-driven restructure which still may breach contractual rights irrespective of motive.

2. Background: The Dispute Within a Family‑Owned Logistics Company

2.1 The corporate setting

The defendant, Store All Logistics Ltd, is a successful Waterford-based logistics provider employing roughly 170 people. Its ownership and governance structure reflects long-standing family involvement:

• The plaintiff, John Paul Kelly, is a beneficial shareholder (approximately 17.5%), a director, and since May 2022, the Managing Director.
• The Dalton family hold the majority shareholding: Derek (58.5%), Liam and Eoin (12% each). Derek, Liam and Eoin are also directors.

The plaintiff’s father had previously served as MD, adding a generational dimension to the dispute. The litigation thus combines:

• employment law (the plaintiff as employee/MD),
• company law (the plaintiff as director and shareholder), and
• family/shareholder dynamics within a closely-held company.

2.2 The MD’s contract and evolving structures

The plaintiff’s May 2022 contract records his role as “a Managing Director, reporting to the Board of Directors” and includes:

• A flexibility clause: he must undertake work “as may be assigned” from time to time, including outside normal duties.
• Standard termination provisions (including the employer’s right to pay in lieu of notice).
• Grievance and disciplinary procedures (with demotion explicitly recognised as a possible sanction).

Crucially:

• No final, board‑approved job description for the MD ever came into being; a draft was produced for aviation regulatory purposes but never adopted by the board.
• Reporting lines and organisational charts (“organograms”) were in flux, as part of an internal strategy initiative (Project Acorn), with contested evidence as to what, if anything, had been formally agreed.

2.3 Remuneration, shareholding and the “resignation”

From 2022 onwards, the plaintiff pressed for increased remuneration and adjustments to shareholding, claiming he had taken on MD responsibilities without a commensurate salary. Negotiations were fraught.

In June–July 2024, the plaintiff sent emails strongly indicating he was resigning, returned his company car, and absented himself. The defendant notified staff of his resignation. The plaintiff later claimed he had not “formally” resigned because no contractual notice had been served and company filings had not been updated.

Kennedy J applies an objective test to those communications and actions, holding that:

• An objective recipient was entitled to treat the plaintiff as having resigned with immediate effect.
• The fact that the resignation might have breached the contractual notice requirement did not invalidate it; that requirement existed for the employer’s benefit.

However, the later agreement that the plaintiff would return to his role as MD with his original contract (pending renegotiation of remuneration) renders the earlier “resignation” largely irrelevant to the present application, save as context and as a factor in the balance of justice.

2.4 The trigger: a senior manager’s resignation and the April 2025 board meeting

In March 2025, the defendant’s Food and Warehouse Manager (FWM) resigned by email to Derek Dalton, blaming the plaintiff for his departure. On 31 March 2025, Derek convened a board meeting for 7 April 2025, proposing:

• Advancing “Project Acorn II” to empower the Senior Leadership Team (SLT),
• Reducing what he saw as excessive day‑to‑day director involvement and micromanagement, and
• That he himself be appointed as Managing Director and that the SLT report to the MD.

The plaintiff objected strongly, contending that:

• There was already an MD – himself – and that the proposal was unlawful and punitive.
• He had not been given adequate advance information, including a copy of the FWM’s email.
• The meeting amounted to a disciplinary process without fair procedures.

He refused to attend the 7 April board meeting unless further details were provided. The Court later held that this boycott was unjustified and inconsistent with his duties as a director to act in the company’s best interests.

2.5 Outcomes of the April 7 meeting: changed reporting lines

At the meeting (which the plaintiff did not attend), the board:

• Did not appoint Derek as MD; the plaintiff remained MD in title.
• Nonetheless re‑structured reporting lines, centralising day‑to‑day oversight of the SLT in Derek and reducing direct reporting to the plaintiff.
• Agreed that Derek would liaise with the plaintiff about him taking on certain strategic responsibilities (finance, funding, project management, strategic development, major client relations), with the SLT enjoying more operational autonomy.

A new organisational chart (the “Second Organogram”) was subsequently circulated:

• It showed the SLT reporting primarily to Derek.
• The MD’s direct operational reports were largely removed, with the plaintiff retaining direct oversight of aviation operations only (for regulatory reasons).

The plaintiff claimed this reduced him to “MD in name only”, undermining his authority and damaging his standing within the business.

2.6 The proceedings and reliefs sought

The plaintiff issued plenary proceedings and sought extensive interlocutory injunctions, including orders:

• Restraining the defendant from treating him as anything other than MD under the prior reporting structure;
• Reinstating him to his pre‑April 2025 role, including the previous reporting lines and board‑level visibility;
• Restraining dismissal, demotion or any disciplinary sanction without full fair procedures; and
• Mandating communications to staff restoring the former structure.

A notable feature was the procedural criticism by the Court:

• Both sides filed very long, repetitive and argumentative affidavits, with large and selective exhibit bundles.
• The plaintiff delayed inexplicably in serving his Statement of Claim, doing so only the day before the injunction hearing and largely by copying affidavit material.
• Kennedy J emphasised that over-long, unfocused pleadings and affidavits may attract cost sanctions and even striking-out.

3. Summary of the Judgment

In essence, Kennedy J held that:

1. The plaintiff remains the company’s Managing Director under his May 2022 contract. The 2024 “resignation” was subsequently superseded when he returned on agreed terms.
2. The evidence does not yet establish a strong case that the April 2025 changes were imposed as a disciplinary sanction or with a punitive motive, though a fair question exists for trial.
3. However, the plaintiff has established a strong case that:
   • The changes to reporting lines and the severe restriction on information flow to the MD were so radical that they amounted to a fundamental alteration of his role and responsibilities,
   • constituting a breach of his employment contract, akin to constructive dismissal, in line with principles from Earley v HSE.
4. Notwithstanding that strong case on breach, the Court refused to grant the broad interlocutory relief sought because:
   • Damages would be an adequate and effective remedy if the plaintiff ultimately wins;
   • There has been a breakdown in relationships between the plaintiff, the Daltons and key staff;
   • The previous reporting structure is uncertain and “in flux”, rendering any reinstatement order a recipe for further conflict and litigation; and
   • Granting such orders would risk serious disruption to the company and its 170 employees, outweighing the harm to the plaintiff.
5. The Court will nevertheless consider making limited orders to ensure that, while he remains MD, the plaintiff:
   • Receives timely information about significant business developments (e.g. the departure of senior or long‑serving staff, major customer issues); and
   • Is included in relevant board/strategic meetings, with an obligation on Derek to act as a conduit for information.
6. The application for broad interlocutory relief is therefore dismissed, subject to such narrow directions about information flow as may be agreed or, failing agreement, imposed by the Court.

4. Legal Framework Applied by the Court

4.1 Interlocutory injunction principles

The Court applied the now-familiar approach to interlocutory injunctions, drawing particularly on:

• Merck Sharp & Dohme v Clonmel Healthcare [2019] IESC 65:
  • The Court must consider whether there is a serious/fair question to be tried.
  • In some contexts (notably employment), a higher threshold may apply (a “strong case” that the plaintiff is likely to succeed), per Maha Lingham.
  • Then the Court examines the balance of justice, including:
    • Whether damages would be an adequate remedy for either side;
    • The importance of flexibility and avoiding an overly rigid checklist;
    • The need to minimise injustice pending trial and to avoid doing anything “in vain”.
• Maha Lingham v HSE [2005] IESC 89:
  • In employment cases where an injunction would have the effect of restraining termination or interfering significantly with the employment relationship, the plaintiff must establish a strong case likely to succeed at trial.
• Morgan v Trinity College Dublin [2003] IEHC 167 and Ryan v ESB International [2013] IEHC 126:
  • The Court must weigh the employee’s rights against the employer’s obligations to maintain order, safety and effective management for all staff.
  • Impact on workplace relationships and key personnel is a “weighty factor”.
• Bergin v Galway Clinic Doughiska [2007] IEHC 386:
  • Where there is an irretrievable breakdown of trust between a CEO and the board, it may be inappropriate for the Court to compel continued working together pending trial.
  • Potential harm to the employer from forced reinstatement can outweigh harm to the employee.

4.2 Fair procedures and disciplinary processes

On fair procedures, the Court referred to classic Irish authorities:

• Glover v BLN Ltd [1973] IR 388:
  • Dismissing an employee for misconduct without notifying them of the allegations and allowing a reply breaches an implied term that any procedure be fair.
• Frizelle v New Ross Credit Union [1997] IEHC 137:
  • Dismissal for misconduct requires:
    • A bona fide complaint, free of hidden agendas;
    • Clear and factual communication of the allegations;
    • A proper opportunity for the employee to respond;
    • Assessment on the balance of probabilities; and
    • A proportionate sanction.
• Rowland v An Post [2017] 1 IR 355, Lally v Rosmini Community School [2021] IEHC 633, QQ v Board of Management of School [2023] IEHC 302:
  • In applications to restrain ongoing disciplinary processes, the employee must show a fair question to be tried, bearing in mind that at trial they must prove the process has gone “irremediably wrong”.

Kennedy J accepts that if the April 7 board meeting or its outcome amounted to a disciplinary process or sanction against the plaintiff, it would have been unlawful for want of fair procedures. However, he concludes that the plaintiff has at most a fair question (not a strong case) on that point, given the plausible business rationale relied on by the defendant.

4.3 Contractual limits on changing an employee’s role

The central contractual principle comes from Earley v HSE [2017] IECA 158; [2017] IECA 207, and before that Rafferty v Bus Éireann [1997] 2 IR 424:

• At common law, an employee is not required to do a fundamentally different job from that contracted for.
• A clause requiring flexibility (e.g. to work “in any service area as the need arises”) does not entitle the employer to re‑write the core nature of the role.
• In Earley:
  • A Director of Nursing with a defined clinical/operational remit was reassigned to a substantially non‑operational post.
  • Even without loss of pay or formal status, this was held to be a fundamental contractual breach justifying injunctive relief.

Kennedy J accepts this principle and applies it by analogy to an MD whose reporting lines and access to information are radically altered, even though salary and formal title remain unchanged.

The Court also notices s.173 Companies Act 2014, which empowers a board to define an MD’s powers as a matter of company law. Importantly, Kennedy J holds that:

• Section 173 does not override contractual rights between the company and the MD as employee.
• A decision valid in corporate governance terms can still be a breach of the employment contract.

4.4 Discretion, reasonableness and escalation clauses

Kennedy J makes repeated reference to:

• Braganza v BP Shipping Ltd [2015] UKSC 17 and
• Connolly v Western Health and Social Care Trust [2017] NICA 61, and
• the Irish Supreme Court’s treatment of such clauses in Ray O’Sullivan v HSE [2023] IESC 11.

These authorities emphasise that where a party (such as an employer) has a contractual discretion—for example, to insist on particular internal procedures—the law implies a term that it must exercise that discretion:

• Reasonably;
• For a proper purpose; and
• On the basis of relevant considerations and non‑arbitrary reasoning.

Applying this, Kennedy J holds:

• The employer could not reasonably insist that the plaintiff revert to the formal grievance procedure after both parties had already engaged in a mediation process intended to resolve the same issues.
• The mediation process effectively superseded the grievance procedure in this context.

5. The Court’s Reasoning in Detail

5.1 Grievance procedure and alleged non‑disclosure

The defendant argued that the injunction should be refused because the plaintiff:

• Had not fully disclosed all relevant facts; and
• Had failed to exhaust the contractually‑mandated grievance procedure.

Kennedy J rejects these as grounds to refuse relief:

• No material non‑disclosure had been demonstrated.
• The parties had agreed to and engaged in a mediation process, which, on a fair reading of the documents, superseded the grievance procedure for these disputes.
• In any event, there had been no timely application to stay the proceedings on the basis of an unexhausted internal mechanism.

5.2 The “resignation” and its limited relevance

While critical of the plaintiff’s 2024 communications (described as an ultimatum which the company was entitled to treat as a resignation), the judge holds that this episode was effectively moot once the parties agreed that he would resume as MD under his original contract, with remuneration to be renegotiated.

The only continuing relevance of the resignation is:

• As part of the context for later board concerns about the plaintiff’s reliability and commitment; and
• As a factor weighing against granting discretionary injunctive relief (the plaintiff not coming entirely with “clean hands”).

5.3 The plaintiff’s conduct and intra‑company relations

The judgment is notably candid about the plaintiff’s contribution to the deteriorating situation:

• Emails over several years show a tendency to adopt a confrontational tone both with the board and with senior staff (including the Operations Manager).
• Board minutes suggest recurring difficulties in his acceptance of board decisions.
• The FWM’s resignation and a major client’s request that the plaintiff be removed from negotiations indicate operational and relational problems.

Without apportioning full blame, the Court accepts that:

• The company had legitimate grounds to be concerned about workplace relationships and their effect on key staff and customers.
• The board was obliged—as part of its fiduciary duty to the company—to consider organizational and reporting changes to protect the business and staff.

5.4 Status of the MD’s role and reporting lines

The Court carefully dissects whether the pre‑April 2025 reporting lines were themselves part of the plaintiff’s contractual entitlements.

Key points:

• The MD’s contract did not explicitly embed any particular organogram or job description.
• The so‑called “First Organogram” was of uncertain date and status; the plaintiff failed to show that the board had formally approved it or that it was ever incorporated into his contract.
• There was a mutual recognition, pre‑dispute, that:
  • Roles and reporting lines were in flux after the MBO;
  • Project Acorn was intentionally designed to re‑shape structures, empower the SLT, and free directors from day‑to‑day micromanagement.
• The Operations Manager had, by contract, been reporting directly to the Board (and in practice to Derek), and the board had previously reaffirmed that arrangement to resolve discord with the plaintiff.

Consequently, the judge concludes that the plaintiff has only a fair question, not a strong case, that the previous reporting structure was contractually fixed and immutable. There is a broad expectation of flexibility, especially at senior level.

But that is not the end of the story, because the Court then asks a different question: even if reporting structures were not contractually frozen, has the board gone too far in changing them?

5.5 Was the April 7 decision disciplinary or punitive?

Kennedy J accepts that if the board meeting and resulting restructuring were:

• A disciplinary process, and/or
• A sanction for alleged misconduct (especially flowing from the FWM’s complaint or the plaintiff’s stance on remuneration and shares),

then the absence of fair procedures would breach the plaintiff’s contractual and constitutional rights, applying Glover and Frizelle.

However, the evidence also supported a genuine, long‑running concern that:

• The directors were too involved in daily operations;
• The SLT felt micro‑managed and needed autonomy to grow; and
• Customer and staff relations were being jeopardised by existing dynamics.

In that light, the Court finds:

• There is a credible business rationale for the changes, independent of any desire to punish the plaintiff;
• The plaintiff has shown only a fair question to be tried (not a strong case) that the restructure was really a disguised disciplinary sanction.

5.6 Did the change breach the MD’s contract notwithstanding its motive?

This is the central and most important finding. Kennedy J distinguishes between:

• Motive (disciplinary vs business), and
• Effect (whether there has been a fundamental change to contractual duties).

He holds that even if the board was acting honestly and in what it saw as the company’s best interests, its actions can still constitute a contractual breach.

Applying the logic of Earley, he reasons that:

• Whatever the exact pre‑existing structure, the MD was intended to have substantial operational responsibility and direct interaction with senior management and customers.
• The Second Organogram and the ensuing practice:
  • Removed virtually all direct reports to the MD (except in aviation);
  • Channelled operational information and authority almost entirely through Derek;
  • Effectively left the plaintiff with the title of MD but not the practical powers or responsibilities associated with that office.
• This was a radical and all‑encompassing curtailment, going far beyond reasonable flexibility.

Accordingly, the plaintiff has established a strong case likely to succeed at trial that:

• The restructuring breached his employment contract,
• In a manner akin to constructive dismissal, even though:
  • His pay and title remained unchanged;
  • There was no formal dismissal; and
  • The defendant may have had bona fide business motives.

5.7 Information flow as an implied part of the MD’s role

An important and relatively novel aspect of the judgment is its treatment of information flow.

Beyond the organogram, the Court was troubled by the defendant’s “extraordinary” failure to:

• Inform the MD promptly about the departure of senior or long‑serving staff;
• Keep him apprised of significant threats or opportunities for the business; and
• Respond constructively to reasonable requests for information.

Kennedy J implicitly recognises that for a senior role such as MD:

• Access to relevant information is an implied contractual entitlement, and
• Systematically cutting off that information can be as damaging as reassigning formal duties.

The judge therefore signals a willingness to craft limited, targeted orders to ensure:

• Regular attendance by the plaintiff at board and strategic meetings;
• Proactive transmission of material information by Derek (as de facto conduit); and
• Proper, timely responses to the MD’s reasonable information requests.

5.8 The balance of justice: why no broad injunction was granted

Despite finding a strong case of contractual breach, Kennedy J refuses to order reinstatement of the previous reporting lines or to restrain further structural changes in the sweeping terms sought. Several factors are key:

1. Adequacy of damages:
   • The plaintiff remains employed as MD and on full pay.
   enhanced damages award if he succeeds.
   • There is no inherent difficulty in quantifying loss.
2. Breakdown of relationships and workplace dynamics:
   • The relationship between the plaintiff, Derek and other senior staff has clearly deteriorated.
   • Forcing a return to a vague and contentious prior structure risks severe disruption to the business and its workforce, contrary to Bergin, Morgan and Ryan.
3. Uncertainty about the status quo:
   • It is not clear what the exact pre‑April 2025 reporting structure was, nor whether it was contractually fixed.
   • An injunction to restore that “status quo” would rest on “shifting sands” and would likely generate further litigation over interpretation and implementation.
4. Conduct of the plaintiff:
   • The plaintiff’s 2024 resignation emails disregarded his contractual obligations and obligations to the company.
   • His refusal to attend the 7 April board meeting undermines his claim that he was denied an opportunity to respond.
   • His delay in serving the Statement of Claim and use of sprawling affidavits raise concerns about the tactical use of interlocutory relief.
5. Impact on third parties and the business:
   • Any order re‑installing the earlier structure would affect 170 employees, not just the plaintiff and the Daltons.
   • The board must retain a degree of managerial autonomy to protect clients and staff and adapt to competitive conditions.

In the judge’s words, “turning the clock back” would be disruptive and damaging, while leaving matters as they are, pending an expedited trial, can be effectively remedied with damages.

5.9 Limited potential relief regarding information

Kennedy J therefore:

• Dismisses the application for the broad suite of interlocutory orders sought; but
• Indicates he will, if necessary, impose prescriptive interlocutory directions about:
  • The frequency and content of SLT/board/strategic meetings involving both the plaintiff and Derek; and
  • The obligation on Derek to ensure that all material information relevant to the plaintiff’s MD role is promptly provided.

The judge encourages the parties to agree appropriate mechanisms themselves, but warns that if they do not, the Court will dictate them.

6. Precedents Cited and Their Influence

6.1 Earley v HSE

Earley is the cornerstone of the plaintiff’s contractual argument. The Court of Appeal held that:

• An employee can restrain an employer from reassigning them to a fundamentally different job, even if:
  • There is no reduction in pay or outward status;
  • The change is not disciplinary; and
  • The employer’s motives may be benign.

Kennedy J applies this principle to an MD whose operational scope and direct management of staff have been hollowed out and who is denied normal information flows. He rejects the defendant’s attempt to distinguish Earley on the basis that the MD’s role here was ill-defined, noting that even with some inherent flexibility:

• The Court cannot accept that an MD appointment could reasonably be understood to mean holding the title but being deprived of the core powers needed to do the job.

6.2 Glover and Frizelle

These cases underpin the plaintiff’s argument about fair procedures and disciplinary sanctions. Kennedy J acknowledges that if the April 7 meeting and subsequent changes were indeed disciplinary in nature, the defendant failed to afford the plaintiff the required protections.

However, he finds the evidence on motive equivocal, with plausible business reasons also in play, and therefore treats this issue as one where only a fair question has been established, not the “strong case” required for an interlocutory injunction restraining an alleged unfair disciplinary process.

6.3 Merck, Maha Lingham, Morgan, Ryan and Bergin

These authorities shape the Court’s approach to the balance of justice:

• Merck emphasises flexibility, the central place of adequacy of damages, and cautions against a mechanistic test.
• Maha Lingham requires a strong case in employment injunctions affecting continuation of employment.
• Morgan and Ryan remind the Court to consider:
  • The employer’s duty to protect all staff and maintain orderly management;
  • The impact on wider employment relationships.
• Bergin demonstrates judicial reluctance to force a CEO and board to work together where relationships have irretrievably broken down, and highlights the danger of employees seeking injunctions mainly to secure negotiating leverage.

Kennedy J openly draws on these to justify withholding an injunction despite finding a likely contractual breach.

6.4 Braganza-type reasonableness: Braganza, Connolly, O’Sullivan

The judge references this line of authority both in relation to:

• The employer’s attempt to insist on the formal grievance procedure despite the parties having opted for mediation; and
• The broader question of whether the exercise of management discretion in changing reporting lines falls within the bounds of reasonable, good‑faith decision‑making.

He finds:

• It would not be “reasonable” for the employer to insist on the grievance procedure after mediation.
• Even where the board acts for legitimate business purposes, the sheer extremity of the change to the MD’s role falls outside permissible bounds of discretion, and thus amounts to breach of contract.

6.5 Dromada Windfarm v Cremins and the “unscrambling the omelette” point

Kennedy J cites Dromada Windfarm (ROI) Ltd v Cremins [2023] IEHC 417 for the pragmatic notion that, in some cases, it is impossible—or undesirable—to unscramble the omelette with specific relief, and that damages are the more appropriate final remedy.

He hints that, even at trial, a permanent injunction reinstating an earlier structure may be problematic in practice, particularly where personal relations are badly damaged. Nonetheless, he accepts that in principle a permanent injunction could be granted if the plaintiff succeeds.

7. Key Legal Principles and Novel Contributions

7.1 Distinguishing motive from contractual effect

One of the key contributions of the judgment is the clear analytical separation between:

• Whether an employer’s actions amount to a disciplinary sanction (triggering fair procedures), and
• Whether those same actions nonetheless breach the contract of employment by fundamentally altering the role.

The Court is prepared to accept that:

• The restructure might have been genuinely motivated by business considerations; yet
• The net effect still stripped the MD of his core functions and access to information, which is impermissible under the contract.

7.2 “Sidelining without dismissal” as constructive breach

Kelly confirms that:

• An employer cannot lawfully “park” a senior employee in a role that is MD in title only, having removed substantive responsibilities and information flow, even if:
  • No formal dismissal has occurred;
  • No wages have been reduced; and
  • The employer’s motivation is to safeguard business performance.

Such sidelining can be treated as a fundamental contractual breach, conceptually aligning with the notion of constructive dismissal in statutory and common law contexts.

7.3 Earley‑type breach does not guarantee Earley‑type injunction

While Earley is often understood as strongly favouring injunctive relief where an employee is assigned a fundamentally different role, Kelly tempers that understanding:

• Even with a strong case of breach, the Court may refuse interim reinstatement where:
  • The previous structure was uncertain, evolving and contested;
  • Workplace relationships have significantly deteriorated;
  • An injunction would cause serious disruption to the business and other employees; and
  • Damages are adequate and practically effective as a remedy.

In short, a strong case of contractual breach does not automatically entitle a plaintiff to an interlocutory injunction reinstating them to their prior role or reporting lines.

7.4 Company law powers vs employment contract

The judgment reinforces that:

• Section 173 Companies Act 2014, empowering a board to define an MD’s powers, does not immunise it from allegations of breach of the MD’s employment contract.
• Corporate law authority and contractual obligations operate in parallel, not as mutually exclusive regimes.

Boards of owner‑managed companies cannot assume that any internally valid governance decision will be immune from employment law challenge.

7.5 Directors’ duties vs employee rights in hybrid roles

The case also highlights the complexity where an individual is simultaneously:

• An employee (with contractual rights);
• A director (with fiduciary duties to the company); and
• A shareholder (with distinct proprietary and relational interests).

Kennedy J underscores that:

• As a director, the plaintiff was obliged to attend and participate constructively in key board meetings, especially when strategic issues and senior staff departures were on the agenda.
• His boycott of the April 7 meeting directly undermines his subsequent complaint that he was denied an opportunity to respond.

The judgment reminds senior managers who also sit on the board that their director duties may circumscribe the way they can rely on their employee rights.

7.6 Information flow as a critical component of senior roles

By indicating its willingness to order that the MD be provided with timely information about key developments, the Court implicitly recognises that:

• For a role such as MD, access to information is not a mere courtesy or matter of internal etiquette; it is an essential component of the job.
• Withholding such information can itself contribute to a fundamental change in role and may be justiciable in contract.

7.7 ADR vs internal procedures

By treating the meditated process as effectively superseding the grievance procedure, and relying on Braganza-type reasoning, Kennedy J reinforces that:

• Where parties agree a particular escalation or ADR route, it should generally be respected.
• An employer may not subsequently insist on a different internal procedure if doing so would be unreasonable or oppressive in the circumstances.

7.8 Litigation practice: pleadings and affidavits

The judgment contains strong warnings to practitioners:

• Overlong, argumentative affidavits and pleadings which rehearse historic grievances far beyond the issues in dispute may be treated as an abuse of process and affect costs.
• The Statement of Claim should set out concise material facts supporting the causes of action, not a narrative replication of affidavit evidence.
• Delays in serving core pleadings (without leave of the Court) can raise legitimate doubts about whether the injunction is being pursued for tactical leverage rather than genuine relief, which is relevant to the Merck balance of justice analysis.

8. Simplifying the Complex Concepts

8.1 Interlocutory injunction

An interlocutory injunction is a temporary court order made before trial, to regulate the parties’ positions until the full case can be heard. The Court does not decide who is ultimately right; it decides how to minimise unfairness in the interim.

8.2 “Strong case” vs “fair question”

• A fair question to be tried means there is some genuine issue worth a full trial.
• A strong case means the plaintiff is more likely than not to win at trial on that issue, judged at a preliminary level.
• In employment injunctions affecting continuation or core aspects of the job, Irish courts typically insist on the strong case standard (Maha Lingham).

8.3 Balance of convenience / balance of justice

Once a fair question (or strong case) is established, the Court asks:

• What would cause greater injustice:
  • Granting the injunction (and potentially disrupting the defendant), or
  • Refusing it (and potentially harming the plaintiff)?
• Would money compensation later suffice to repair either side’s loss?

This is what is meant by the balance of convenience or balance of justice.

8.4 Constructive dismissal / fundamental breach

A constructive dismissal (in broad terms) occurs where:

• The employer does not expressly fire the employee, but
• Acts in a way that fundamentally breaches the contract (for example, by radically changing the job),
• Forcing the employee, in practical terms, to leave or suffer a substantially different role.

In Kelly, the judge does not decide there has been a constructive dismissal (the plaintiff is still in employment), but he notes that the restructuring is akin to the kind of fundamental breach that could support such a claim.

8.5 Braganza reasonableness

Where one party to a contract has a discretionary power (such as an employer deciding on internal processes or restructuring), the law often implies a term that the power must be exercised:

• For a proper purpose,
• On a rational basis, and
• Without disregarding relevant considerations.

This is often called a Braganza-type duty, after the UK case of that name.

8.6 The “status quo”

When considering interlocutory relief, courts often aim to preserve the status quo ante (the position existing before the alleged wrong). But if:

• The previous position is unclear or disputed, or
• Reverting to it would create serious disruption,

the Court may decline to do so and instead allow the new arrangements to continue until trial, with any harm being remedied by damages.

9. Likely Impact on Future Cases and Practice

9.1 Implications for employers and boards

For employers, particularly in owner‑managed or family companies, Kelly carries several important lessons:

• Restructuring senior roles has contractual limits:
  • Even if driven by genuine business needs, a restructure that effectively sidel ines an MD or senior executive can be a breach of contract.
• Information must flow:
  • If retaining a person as MD, it is inconsistent—and potentially unlawful—to exclude them from key information and developments.
• Better to exit lawfully than to park unlawfully:
  • If the board no longer has confidence in the MD, it may be safer, legally, to follow a proper contractual and fair procedure route to end the employment (with notice/pay in lieu), rather than to strip the job of substance while keeping the title.
• Corporate law powers are not a shield:
  • Invoking s.173 Companies Act 2014 does not absolve the company of compliance with employment law obligations.
• Prepare for litigation:
  • Where senior reporting lines are changed, especially following complaints, expect potential Earley‑style litigation.
  • Documenting the business rationale carefully and ensuring fair engagement with the individual will be critical.

9.2 Implications for senior employees and directors

For senior employees, especially those who are also directors and shareholders, Kelly signals that:

• Courts will protect substance over form:
  • If the employer keeps your title but removes your core functions and information, you may still have a strong contractual claim.
• However, injunctive reinstatement is not guaranteed:
  • Even with a strong case, if relationships are badly damaged and damages are adequate, the Court may refuse interim relief.
• Your own conduct matters:
  • Intemperate emails, threats of resignation without notice, and refusal to engage in internal processes (e.g. boycotting board meetings) can weigh heavily against equitable relief.

9.3 Guidance for litigators

For lawyers acting in similar disputes:

• Frame the case clearly:
  • Separate claims about disciplinary unfairness from claims about fundamental change of role.
• Evidence of the pre‑existing role is crucial:
  • Contemporaneous job descriptions, organograms, board minutes and emails about roles should be carefully marshalled to show what the real job entailed.
• Pleadings and affidavits must be focused:
  • Avoid “Other Grievances” crowding out the core contractual and procedural issues; courts are increasingly critical of sprawling, cut‑and‑paste pleadings.
• Consider remedies realistically:
  • Where relationships are plainly broken, be realistic about the prospects of an injunction compelling continued cooperation; consider targeting information‑flow orders or other narrow reliefs instead.

10. Conclusion: The Significance of Kelly in the Broader Legal Context

Kelly v Store All Logistics Ltd advances Irish employment and company law in several important respects. It confirms that:

• A board cannot neutralise an MD by altering reporting lines and information flow to such an extent that the MD is left only with a title; such an approach constitutes a fundamental breach of contract, irrespective of motive.
• Nonetheless, even where a strong case of breach is made out, the Court may refuse interlocutory reinstatement, emphasising:
  • The adequacy of damages;
  • The need to protect the stability of the business and its workforce; and
  • The impracticality of enforcing a vague and contentious prior status quo.
• Information rights and reporting structures are substantive components of senior roles, not mere internal conveniences.
• Directors who are also employees must navigate carefully between their duties to the company and their contractual rights, recognising that actions such as boycotting board meetings may undermine their claims to relief.

The judgment thus refines the reach of Earley by re‑emphasising the centrality of the balance of justice and the Court’s reluctance to restructure working relationships on an interim basis where trust has broken down. It sends a clear signal to both employers and executives: substantial changes in role must respect contractual boundaries, but the primary remedy for breaches may be damages rather than injunctive reinstatement, especially where the human relationships sustaining corporate governance have already fractured.