Ex-Smiles Inclusive exec Sean Connolly sues Gold Coast dental group for breach of contract

A former Smiles Inclusive executive is suing the embattled Gold Coast dental group for more than $500,000 in damages, alleging he is owed commission from practices he helped the company buy.

Gold Coast dental roll-up Smiles Inclusive is being sued by a former executive for breach of contract. Picture: iStock

A FORMER Smiles Inclusive executive is suing the embattled Gold Coast dental group for more than $500,000 in damages, alleging he is owed commission from practices he helped the company buy.

Sean Connolly worked at Smiles Inclusive after leaving his job in the UK to take on the role of corporate general manager, in charge of acquisitions for the roll-up, which launched in April last year with 52 practices.

In his statement of claim, filed in March in the Southport District Court, Mr Connolly said he helped to negotiate the sale of 15 businesses, including clinics at Coolangatta, South Tweed and Murwillumbah, from which he was promised, but failed to receive, 0.5 per cent of the purchase price.

In addition to commissions totalling $96,050, Mr Connolly also alleges he was not paid his salary for two weeks ($6274), superannuation ($595) and termination payments for his 26-week notice period ($90,599) from when he was made redundant in January.

Sean Connolly was the Head of Client Acquisitions & Business Development at Smiles Inclusive.

SUBSCRIBE TO THE BULLETIN FOR JUST $5 A MONTH FOR THE FIRST THREE MONTHS

MUD FLIES AT BOARDROOM ROW AT SMILES INCLUSIVE

In its defence filed late last month, Smiles Inclusive and Smiles Southport Pty Ltd, a company linked to CEO Tony McCormack and owned by Smiles Inclusive, denied it had agreed to pay the 0.5 per cent commission.

According to Mr Connolly’s lawsuit, he entered into a contract with both defendants in September, 2017. The contract included 12 weeks’ notice, a probationary period of six months, and salary of $181,200 plus superannuation.

Mr Connolly claimed that in January last year he and then-CEO Mike Timoney agreed to amend the original contract to include the 0.5 per cent commission on the sale price of clinics.

“Mr Timoney said that he ran the company and the board would agree to what he said,” the claim reads.

Three months later Mr Connolly said executive director Tracy Penn told him superannuation was being deducted from his commission payments.

Mike Timoney was CEO of Smiles Inclusive prior to being removed in the wake of poor results. Picture: Annette Dew

He then met Mr Timoney and Ms Penn and asked them for a new agreement in writing.

“I have not pushed to get written agreements because of my relationship with you (Mr Timoney) and as I have always been easy going and flexible, but now I want everything in writing,” the statement reads.

“I wanted my terms to be in line with the other execs (sic) on six months’ notice.”

Mr Connolly claims this was agreed to and he was provided a two-page document in September from Smiles, which included the commission, but excluded the six months’ leave.

He said he worked for the company for three more months before he was called to a meeting with then-chair David Herlihy who terminated his employment.

Smiles Inclusive listed in April last year but has suffered from poor performance and legal issues ever since. Picture: iStock

Mr Connolly said Mr Herlihy told him the business had suffered since listing and would no longer be undertaking acquisitions.

“This isn’t right. I left my family behind for this job and my wife (who was working at a primary school and had done for over 16 years) had left her job to be with me in Australia. What do you expect me to live on? What are you to offer me?” Mr Connolly claims to have said.

Mr Connolly said Mr Herlihy responded: “We aren’t giving you anything”.

The defence from Smiles says Mr Connolly’s employment was with Smiles Southport Pty Ltd, not Smiles Inclusive, and therefore the claims related to the second defendant.

It said there was no agreement in January, 2018, to amend Mr Connolly’s contract to include the 0.5 per cent commission, nor to extend his notice period to six months.

Smiles said at trial it would rely upon a one-page schedule amending Mr Connolly’s contract in September that it says differs from the version relied upon by Mr Connolly.

Smiles’ lawyers wrote it did not deny or admit the failure to pay his salary, superannuation or commissions on the basis they had not received instructions from the company.