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Largest ever payment made in a Constructive Dismissal Case

Philip Smith, the ex-CEO of RSA received a payment of 2 years’ salary (amounting to a total of €1.25 million – made up of a base salary, pension and bonus). This is the highest ever award made for a constructive dismissal in Ireland, and is a full payment of 2 years’ salary.

Mr. Smith left RSA after being suspended live on national television – this was seen as a major factor in the award, as the EAT Chair said that this  “was the equivalent of taking a sledge hammer to his reputation as well as to his prospects of ever securing employment in the industry again in Ireland, Europe or possibly beyond that”.

Although the company was obviously going through major financial crisis, which Mr. Smith was managing, the EAT took the view that the problems were a joint responsibility and were not solely due to Mr. Smith’s management.

However, the critical issue – as always – with a constructive dismissal, is whether the company has followed it’s own grievance and disciplinary procedures exactly, and – as this did not occur in this case, a maximum award of 2 years’ salary was paid to the complainant.

RSA is currently appealing this decision to the Circuit court.