The High Court restrained Setanta Insurance Services Limited from continuing an investigation into its general manager, Deirdre McLoughlin, in the form proposed by the company’s human resources manager. The order lasts until the hearing of McLoughlin’s action. The court left open the option of an alternative investigation and allowed her suspension on full pay to continue.
The interlocutory application concerned McLoughlin’s employment, her suspension and a disciplinary process that could lead to dismissal. The allegations about the company’s handling of the process and McLoughlin’s conduct were disputed. The judge did not determine those underlying disputes at this stage.
Setanta’s letter of 7 September 2011 said it would investigate McLoughlin’s alleged role in misrepresenting the company’s outstanding claims reserves and underwriting results for the 2009/2010 financial year, as well as other alleged breaches of duties and company procedures. The letter said the investigation would establish facts and report to the board, which would decide whether to proceed to a formal disciplinary hearing. McLoughlin was suspended on full pay pending the investigation.
Justice Laffoy said the company had not specified the “other matters” under investigation. She also considered affidavits from HR manager Emer Jordan, who had been appointed to conduct the investigation. The judge said Jordan’s evidence included conclusions that McLoughlin’s conduct warranted dismissal and comments indicating prejudgment about the disputed events. Taken together, that evidence suggested the investigation could go beyond collecting evidence and deciding whether there was a case to answer.
The court concluded there was a serious risk that the proposed process was sufficiently flawed and incapable of being cured to cause irreparable harm if it continued. It also found that damages would not adequately address reputational harm if McLoughlin were summarily dismissed following a flawed process. The order records McLoughlin’s undertaking as to damages.
The judge refused to rescind the suspension, finding it was a holding suspension rather than a punitive one, and said the salary and other remuneration claims did not arise while full pay continued. The injunction was limited to stopping the investigation by Jordan under the mandate in the 7 September letter. Setanta remained free to begin an alternative investigation under McLoughlin’s contract and the Employee Handbook, adapted to her position, and to proceed to discipline. The court also allowed the suspension to continue, while saying both sides should cooperate to complete the process as soon as reasonably practicable.