RSA to fight €1.25m award to former chief
The insurance company RSA is to appeal a decision of the Employment Appeals Tribunal which ordered them to pay €1.25m to former CEO Philip Smith over his dismissal.
The company said last month’s record-breaking ruling in favour of Philip Smith was astonishing and confirmed plans to go to court in a bid to have it overturned.
He resigned in November 2013 and claimed he had been made a “fall guy” after RSA discovered issues in the claims and finance functions of the business in Dublin.
The company said at the time that reserves for claims were inadequate and €262m had to be pumped into the subsidiary.
Mr Smith successfully challenged his departure from the insurance firm at the Employment Appeals Tribunal (EAT) in a case for constructive dismissal.
RSA said it fundamentally disagrees with the judgment and is seeking redress through the courts.
Derek Walsh, RSA Group general counsel, said the company believes the EAT decision demonstrates a serious misunderstanding of and a failure to grasp the key issues.
“It did not recognise the enormity of its finding that Mr Smith was aware of the reserving practices within RSA Ireland which involved a potential breach of Central Bank regulations.
“We are astonished by the amount of the award made by the Tribunal which RSA believes is utterly inconsistent with that crucial finding and creates a dangerous precedent.”
RSA denies an internal inquiry into the Irish subsidiary had been pre-determined.
The company said the employment tribunal failed to appreciate the critical role of reserving for claims in the insurance business; RSA’s obligations as a regulated financial institution; and its place in a publicly-listed group of companies.
