Two managers at businessman David Hall’s ambulance company have become the first employees to win court protection under recently introduced whistleblower legislation.
Mick Dougan and Sean Clarke, who were made redundant after accusing Mr Hall of "serious wrongdoing" in a disclosure to the Revenue Commissioners, will continue to be paid until their unfair dismissal case is heard, the Circuit Court has decided.
Judge Francis Comerford said he was satisfied there were substantial grounds for contending the men’s dismissal from Lifeline Ambulance Service last month was wholly or mainly the result of a protected disclosure they made to Revenue. He directed they should be granted relief under whistleblowing legislation introduced two years ago.
Mr Dougan and Mr Clarke, in affidavits opened in court, claimed staff were paid mileage expenses in place of taxable pay and alleged they were subjected to bullying and harassment.
Second application
The allegations made by the two men were disclosed at a Circuit Court hearing in Naas yesterday at which they sought relief under the Protected Disclosure Act 2014. This is only the second time such an application has been made under the legislation, introduced two years ago.
Mr Dougan, assistant managing director, and Mr Clarke, director of ambulance operations, claim they were made redundant for making the disclosure to Revenue about the company last January.
Their claims were rejected by the company, whose board made them redundant following a review by an external consultant that found their roles were no longer required.
‘Distracted’
In his affidavit, Mr Hall said the turnover of Lifeline fell from €8 million to €4 million between 2008 and 2014, during the economic downturn and at a time when he was “distracted” with involvement in the Irish Mortgage Holders Organisation.
He was obliged to seek financial backing, but this was contingent on his return to active involvement in the company.
On his return last August, he was met with an uneasy reception and found his decision-making capacity was being undermined.
He commissioned former Mater Hospital chief executive Brian Conlan to review the business but it was clear Mr Dougan felt threatened by this process.
In April, Mr Conlan recommended three roles, including those of Mr Dougan and Mr Clarke, be made redundant as there was significant duplication with other roles.
That this decision was made on operational grounds was evidenced by the fact that another employee, Mary Windrum, was not selected for redundancy despite co-signing the disclosure to Revenue, Mr Hall said.
He claimed the disclosure by Mr Dougan and Mr Clarke was for the sole purpose of protecting themselves against the threat to their positions from the management review and to provide a basis for the current legal proceedings.
They also planned to set up a rival ambulance company, Hall alleged.
Mr Hall said the company auditors were dealing with Revenue to ascertain whether any liability arose from the matter identified in the disclosure.
Barrister Carl Hanahoe, for Lifeline, said Mr Hall had at all times acted on Mr Conlan’s advice and his own understanding of the needs of the company.
Barrister Tom Mallon, for Mr Dougan and Mr Clarke, said they were effectively running the business between 2010 and 2015 while Mr Hall was pursuing other interests. Mr Hall was largely absent from day-to-day management for five years.
‘Avoiding tax’
In his affidavit, Mr Dougan said that within a few years of starting work at Lifeline in 2002, Mr Hall made him aware of “certain actions he was engaged in for the purpose of avoiding or reducing tax”.
When the company was audited by Revenue in 2014, Mr Dougan said he advised Mr Hall to make a full disclosure as he was aware the company had not been tax-compliant for many years. “I believe no such full disclosure was made.”
Last January, Mr Dougan and Mr Clarke sought to add an item to the agenda of a management meeting in relation to actions made by Mr Hall and possibly other directors “that have had a financial impact on the business and which may not, or have not, been properly accounted for in the company’s books” or with the Revenue.
Later that month they made a protected disclosure to Revenue “in relation to financial matters and wrongdoing within the company”, according to Mr Dougan.
Lifeline offered re-engagement on “gardening leave” to Mr Dougan but Judge Comerford said Mr Dougan’s refusal of this offer was reasonable.
The company offered Mr Clarke re-engagement working as a paramedic on its ambulances. Judge Comerford said Mr Clarke’s refusal of this offer was reasonable and he made an order for the continued payment of both men’s salaries until their unfair dismissal case was heard. Costs were awarded to the two men.
