Munro, 75, founded the company in 1975 but was dismissed after it was bought by the US firm (TLG) after its acquisition of Barrhead in February last year.

He has taken the company to tribunal in a bid to be reinstated, citing unfair dismissal.

But president of TLG, John O’Hara, who took up his role last December, told the hearing in Glasgow yesterday that to re-employ Munro would be a “financial risk” and the situation was “too far gone”.

He told the hearing Munro was a “disruption”, which was given as the reason for making him redundant.

O’Hara said he had wanted Munro to remain in the company as a non-executive chairman, being paid £67 per hour on a zero-hour contract in an ambassadorial role.

But Munro took umbrage with the new contract, which severed his direct involvement with Barrhead, cut his contact with staff members and meant he would have to work from home.

The president of TLG was initially happy with the arrangement after the takeover.

O’Hara said: “It was mutually respectful and a good outcome. Since it’s no cost to the company, he should remain as non-executive chairman.”

He added: “My understanding was towards the end of the transaction there was a negotiation to pay him £67 per hour for special projects and for Munro’s ability to find properties for new stores.

“I think that was suggested by Mr Munro.”

However, Munro refused the terms on the basis that his 43 years of service to Barrhead would not be recognised under the new contract.

Under UK employment law, employees who have served two years or more are entitled to statutory redundancy pay.

Following the row over his new contract, the company was obliged to pay Munro statutory pay totalling £15,000 for his 43 years of service.

O’Hara said: “Mr Munro said if we could find something suitable he would back off with this process.

“I think the barricades that were put in his way were the main reasons he couldn’t accept this.”

He told the hearing: “I think I was made aware of the fact there had already been several attempts to repair this process and Mr Munro was a disruption to the ongoing business and therefore upheld the decision for redundancy.”

Munro had written in an email of having “a lump in his throat” when he realised his time with Barrhead was ending.

Counsel for TLG Alice Stobart said to O’Hara: “Mr Munro is seeking re-employment. Do you think that would be a good idea?”

But O’Hara said: “It’s too far gone. The relationship’s been too damaged and it would be too much of a distraction and a financial risk to the company.”

Under cross-examination, solicitor Stephen Miller, representing Munro, pointed out email correspondence where O’Hara had mentioned “executive chairman” several times in reference to the new contract.

O’Hara claimed they were “typos”.

He said: “I also used non-executive chairman and ambassador interchangeably. There was never any intention for an executive chairman.”

Prior to last December, O’Hara was a member of the board of directors at TLG and was involved with Munro’s appeal against his sacking last year.

O’Hara had conferred with TLG chief executive Ninan Chacko and director at TLG Andrew Winterton after Munro lodged an appeal last September.

Representing Munro, Miller said: “Did you consider getting Mr Munro’s perspective after discussing with Mr Chacko and Mr Winterton?”

O’Hara replied: “No I did not.”

Chacko said he had a “limited understanding” of Munro’s role with the company, which has more than 70 stores and employs around 1,000 people.

He said: “Mr Munro was owner before the transaction and after the transaction we were the owners. The circumstances were different. There is a context to the role pre and post.

“The context of the role fundamentally changed, he [Munro] doesn’t own the business any more.”

An amendment to Munro’s contract was made on 2 May last year.

But he was forcibly made redundant following a disagreement over his pay and role with the company.

Chacko added: “My focus wasn’t altering a contract, but halting and motivating problems within the Barrhead Travel business.

“It wasn’t to accommodate him within the business but to separate Mr Munro from the day-to-day activities of Barrhead. [At] my end, there was no anticipation that Mr Munro would have a role within Barrhead.

“This is all a question of a pattern of communication becoming clearer and more direct.”

The tribunal continues.