Triona Cody

On 27 May 2024, the board of Science Foundation Ireland (SFI) terminated Mr Nolan’s employment as director general of SFI.

In the months preceding this decision, there had been an investigation into five protected disclosures from senior members of staff alleging misconduct, in particular bullying, against Mr Nolan.

The investigator concluded that there had been no wrongdoing on the part of Mr Nolan and the allegations of bullying were not made out, though there were instances of poor management or communication.

For two of the protected disclosures, the investigator concluded “that the behaviour was at the upper end of the spectrum of inappropriate behaviour, just below bullying”. Arising from this, SFI decided to conduct a disciplinary hearing.

However, no such hearing had been convened or allegations of misconduct formally put to Mr Nolan prior to the decision to terminate his employment.

Mr Nolan sought and obtained an interim injunction on 30 May 2024 to restrain SFI from taking any further steps on foot of the decision to dismiss him. He claimed that the decision had been reached without affording him any fair procedures and argued that this was in breach of SFI’s implied contractual obligations.

At the hearing of the interlocutory application to continue the injunction, Mr Nolan also sought an order directing that he would be permitted to return to work pending the determination of the proceedings.

SFI’s position was that Mr Nolan had been dismissed in accordance with the terms of his contract of employment and not for misconduct. For this reason, SFI argued it was entitled to dismiss Mr Nolan without any requirement to afford him fair procedures.

The issue to be determined by the court was whether Mr Nolan had established a strong case that he was dismissed for misconduct.

Legal arguments

Mr Nolan contended that he was dismissed because of the allegations of inappropriate behaviour made against him, i.e. for misconduct. He was entitled to fair procedures prior to any such dismissal but he was afforded no procedures and accordingly, his dismissal was unlawful.

Mr Nolan argued damages are not an adequate remedy in circumstances where his reputation would be irreparably harmed if SFI was permitted to dismiss him for misconduct without having afforded him fair procedures. In addition, Mr Nolan argued that he would lose the opportunity to be CEO of Research Ireland if dismissed from SFI.

In April 2023, it was announced that SFI and the Irish Research Council would be amalgamated. Mr Nolan was announced as CEO designate of the new organisation, Research Ireland, at the end of May 2023.

SFI contended that Mr Nolan was not dismissed for misconduct but, rather his employment was terminated in accordance with his contract of employment. Therefore, he was not entitled to fair procedures, only compliance with the relevant contractual provisions. SFI complied with those provisions and Mr Nolan had no complaint. His dismissal could not be regarded as wrongful.

SFI also argued that, given the refusal by some members of staff of SFI to work with Mr Nolan, it was not sustainable for Mr Nolan to return to work pending the trial of the action.

The law

The court noted:

1. the Campus Oil test for the grant of an interlocutory injunction was recently clarified in Merck Sharp & Dohme Corp v Clonmel Healthcare Ltd [2019] IESC 65, [2020] 2 IR 1. The Supreme Court set out eight steps which might be followed in an appropriate case:
   1. permanent injunction — if the plaintiff succeeded at the trial, is a permanent injunction likely to be granted. If not, then it is extremely unlikely that an interlocutory injunction should be granted;
   2. fair question to be tried — has it been established that there is a fair question to be tried, and whether the case is likely to go to trial. The court, in considering the balance of convenience or balance of justice, should do so with an awareness that cases may not go to trial, and that the grant or refusal of an injunction may be a significant tactical benefit;
   3. balance of convenience and balance of justice — if there is a fair issue to be tried (and it probably will be tried), do the balance of convenience and the balance of justice lie in favour of granting the injunction;
   4. damages — the most important element in that balance is, in most cases, the question of adequacy of damages;
   5. damages not an adequate remedy — in commercial cases where breach of contract is claimed, courts should be robustly sceptical of a claim that damages are not an adequate remedy;
   6. difficulty in assessing damages — even if damages are an available remedy at trial, difficulty in calculation and assessment of damages may make it more likely that any damages awarded will not be a precise and perfect remedy. In such cases, it may be just and convenient to grant an interlocutory injunction;
   7. other factors — the adequacy of damages is the most important factor of any assessment of the balance of convenience or balance of justice. However, other factors may come into play when considering how matters are to be held most fairly pending a trial, and recognising the possibility that there may be no trial;
   8. flexibility of the remedy — any application should be approached with a recognition of the flexibility of the remedy and the objective of seeking to minimise injustice, where the legal rights of the parties have yet to be determined at trial.
2. that in order to obtain an injunction to prevent termination of the employment relationship, it is necessary to establish not just a “fair question to be tried” but “a strong case likely to succeed at hearing” as set out by the Supreme Court in Maha Lingam v HSE [2005] IESC 89; [2006] 17 ELR 137.
3. there was no requirement for fair procedures where it was accepted that the dismissal was on grounds of poor performance as set out by the Court of Appeal decision in O’Donovan v Over-C Technology Limited [2021] IECA 37.

The decision

The court determined Mr Nolan did not establish a strong case that he was dismissed on the grounds misconduct and did not meet the threshold of establishing a strong case likely to succeed at hearing.

There were allegations against Mr Nolan, but a disciplinary hearing had not been convened, i.e. SFI did not determine the disciplinary issue and then decide to terminate Mr Nolan’s employment. Fair procedures are only required if the actual reason for dismissal is misconduct.

The affidavits filed on behalf of SFI stated “in the clearest of terms” that the board made the decision to dismiss Mr Nolan because of the “dire” situation in SFI and the “dysfunction” in the organisation.

The court noted it is difficult to avoid the inference that the board considered Mr Nolan was at “fault” for the dysfunction. At the very least, SFI seems to suggest that Mr Nolan was dismissed for poor performance (which does not require the application of fair procedures). The court stated that it is the “reason for dismissal which can trigger the right to fair procedures, not the potential impact on reputation”.

The court also noted that even if Mr Nolan had established a strong case likely to succeed, it would not be appropriate to make an order requiring SFI to facilitate his return to work. This would amount to the court micro-managing Mr Nolan’s employment and would undermine SFI’s ability to meet its duty of care to all its employees.

In addition, Mr Nolan’s position as CEO designate of Research Ireland is a matter for the minister for research and integration and could not be directly impacted by the grant or refusal of an injunction in these proceedings.

The appeal

Mr Nolan is appealing the High Court’s refusal of his injunction application. The Court of Appeal recently dismissed Mr Nolan’s preliminary application to maintain his employment status with SFI if, ahead of his appeal, SFI is dissolved by the minister to make way for Research Ireland.

Unlike the injunction application, Mr Nolan did not seek a return to work as director general of SFI pending the determination of the proceedings.

Conclusion

Employers should, if implementing a “no fault” termination, i.e. without a reason, comply with the relevant provisions in the contract of employment, including notice period.

Employers should also be aware that a “no fault” termination is “unfair” under the unfair dismissals legislation and an employee may pursue a claim for unfair dismissal before the Workplace Relations Commission.

• Triona Cody is a senior associate in Kane Tuohy’s employment and litigation department. Niamh Meagher and Jim Gibbons assisted in the writing of this article.