The Industrial Court has ordered State Insurance Company Limited to pay around EC$500,000 to a former executive manager who was summarily dismissed in November 2023 following allegations that errors under her supervision caused a $9.8 million restatement of the company’s financial statements.

The judgment, delivered in March, found that Janice Hodge, who served as Executive Manager of the Life and Medical Department, was unfairly dismissed and that the company acted harshly and in breach of the principles of natural justice throughout the disciplinary process.

Hodge had been employed at State Insurance, where the government is the majority shareholder, since August 2012.

She was elevated to the role of Executive Manager in October 2020, earning a monthly salary close to $13,000 plus allowances at the time of her dismissal.

The case centred on allegations by the company’s Board of Directors that Hodge had failed to disclose critical financial information and had provided misinformation to the company’s former actuary, resulting in the restatement of its financials.

State Insurance contended that her actions amounted to serious misconduct under the Labour Code and a breach of the Companies Act, which requires officers of a company to immediately notify the audit committee and auditors of any error or misstatement of which they become aware.

Hodge denied misconduct, testifying that the error in policy data was a systemic issue tied to outdated software that had been known to the company for years, and that upon discovering the discrepancy she immediately reported the matter to the Chief Executive Officer and Chief Financial Officer through the proper reporting channels.

The court found that the dismissal letter failed to satisfy the requirements of the Labour Code, which requires an employer to provide a precise written statement of the reasons for termination.

The court found that while the letter referenced the $9.8 million restatement and cited section 173 of the Labour Code, it did not identify the specific error Hodge was alleged to have committed, the date on which her awareness of the error arose, to whom she should have made disclosure, or when that disclosure should have occurred.

“The $9.8 million figure cited in the letter is the financial outcome of the restatement… and is not a description of the misconduct itself,” the judgment states.

The court found that no reasonable employee reading the dismissal letter could not know what specific failure they were being dismissed for.

Moreover, the court found that the error was attributable to the company’s own technology and processes rather than to Hodge personally.

The court accepted her evidence that the system used by the Life and Medical Department was antiquated and could not automatically generate an in-force policy file, and that she had provided the actuary with the information he requested based on what the system could produce.

The court also found that State Insurance had applied section 173 selectively.

When the new Chief Executive Officer, Arian Nicholas, became aware of the financial discrepancy in July 2022, she too failed to report it immediately to the Board or auditors and received only a reprimand.

The court held the company could not invoke the same statutory provision to justify summary dismissal of a more subordinate officer while applying a lesser standard to a more senior one.

A notable dimension of the judgment was the court’s observations regarding public statements made in the days surrounding Hodge’s dismissal.

Evidence before the court established that in November 2023, the day before her termination, Prime Minister Gaston Browne made a public announcement that his administration would be sending home four public servants accused of not performing.

Media reports published on November 14 and 15, 2023 identified Hodge by name and attributed her dismissal to regulatory concerns about the accuracy of State Insurance’s accounting statements.

The court made no award under the head of manner of dismissal, as the Prime Minister’s actual statement was not placed in evidence.

However, it stated that public pronouncements by persons in authority connected to majority shareholders in government-controlled entities, which identify named employees in connection with allegations of misconduct or poor performance before those employees have had any opportunity to answer, cause reputational harm that is immediate, severe, and in a small jurisdiction, potentially irreversible.

The court warned that such conduct, if properly proved in future proceedings, would be treated as a significant aggravating feature for an award of manner of dismissal damages.

The court awarded Hodge EC$35,000 in exemplary damages, finding that the employer’s conduct went beyond mere procedural error and represented a conscious decision to proceed without affording her the basic protections to which she was entitled.

The full award comprises EC$15,085.42 in notice pay, EC$146,085.97 for loss of protection, EC$277,964.66 in immediate loss, EC$17,927.10 in future loss, EC$35,000 in exemplary damages and EC$10,000 in costs.

State Insurance is required to pay the sum in three equal monthly instalments of EC$167,354.38 on April 30, May 31 and June 30, 2026.