Former boss of RSA in Ireland wins record payout at tribunal
|
Version 0 of 1. The former head of the Irish operations of RSA has won a record €1.25m (£790,000) at an employment tribunal in a ruling that could raise questions about the circumstances surrounding the accounting issues uncovered at the insurance group in 2013. Philip Smith resigned in November 2013, claiming he had been made the “fall guy” for accounting discrepancies that forced the insurance group to pump £200m into its Irish subsidiary. Smith took his case for constructive dismissal to an employment tribunal in Ireland after arguing that he and his family had been traumatised by his suspension from the FTSE 100 company. The capital shortfall in Ireland was one factor that led to the ejection of RSA’s boss, Simon Lee, in December 2013 and his replacement by the former Royal Bank of Scotland boss Stephen Hester. It is also the subject of an ongoing investigation by the Central Bank of Ireland. Smith’s suspension was announced when RSA stunned the City on a Friday night in November 2013 by saying it had launched an investigation into the Irish subsidiary and was pumping more capital into the operation. During the tribunal, Smith had argued he had made no attempt to cover up the way calculations for possible claims were made – which led to the £200m shortfall – and said the insurer had decided his fate before allowing him to respond to the allegations. RSA argued that Smith ran the operation under a climate of fear and the findings of its investigation were not predetermined. The insurer intends to appeal. The employment tribunal does not formally publish the outcomes of hearings for 14 days after they are delivered, but the Irish Times quoted passages from the outcome. “The tribunal is satisfied that the claimant was aware of the [accounting] practice, as were at least two dozen other employees, most of whom were in Ireland but some of whom were in the UK group,” it said. “The tribunal is not satisfied that this practice was allowed to continue for so long due to a fear of the claimant.” The tribunal agreed with Smith that his suspension had effectively been announced on national television, which it said “was the equivalent of taking a sledgehammer to his reputation as well as to his prospects of ever securing employment in the industry again in Ireland, Europe or possibly beyond”. When he resigned, Smith had said: “My family and I have been truly traumatised by recent events and I have taken this most difficult of decisions in the best interests of my family. Resigning not only eases the stress and strain on them, but also offers me the opportunity to pursue justice outside the current flawed process.” Smith’s resignation letter was read out to the tribunal and in it he said there had been no attempt to cover up the problems in the Irish division which he had been running since 2007. He said the way the way calculations were made were “an open practice, not done surreptitiously or in a secret manner.” It went on: “Equally no attempt was ever made to cover up from colleagues at RSA group level.” RSA said: “We are extremely disappointed by the Tribunal’s decision and fundamentally disagree with it. We are considering our options but intend to appeal the judgment.” |