Owen Hughes v Mongodb Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Keane
• Judgment Date: 06 June 2014
• Neutral Citation: [2014] IEHC 335
• Court: High Court
• Date: 06 June 2014

[2014] IEHC 335

THE HIGH COURT

[No. 4440 P/2014]

Hughes v MongoDB Ltd

CHANCERY

BETWEEN

OWEN HUGHES

APPLICANT

AND

MongoDB LIMITED

RESPONDENT

LINGHAM v HEALTH SERVICE EXECUTIVE 2006 17 ELR 137 2005/36/7565 2005 IESC 89

BURKE v INDEPENDENT COLLEGES LTD T/A INDEPENDENT COLLEGES 2011 22 ELR 169 2010/6/1272 2010 IEHC 412

AMERICAN CYANAMID CO v ETHICON LTD (NO 1) 1975 AC 396 1975 2 WLR 316 1975 1 AER 504

CAMPUS OIL LTD & ORS v MIN FOR INDUSTRY & ORS (NO 2) 1983 IR 88 1984 ILRM 85

WALLACE v IRISH AVIATION AUTHORITY UNREP HOGAN 18.5.2012 2012 IEHC 178

BRADSHAW v MURPHY & COPPER BAR & GRILL LTD UNREP FINLAY GEOGHEGAN 26.3.2014 2014 IEHC 146

CARROLL v BUS ATHA CLIATH/DUBLIN BUS 2005 4 IR 184

SHEEHY v RYAN & MORIARTY 2008 4 IR 258 2008/58/12111 2008 IESC 14

NAUJOKS v NATIONAL INSTITUTE OF BIOPROCESSING RESEARCH & TRAINING LTD 2007 18 ELR 25 2006/43/9291 2006 IEHC 358

Employment – Termination of contract – Injunctions – Applicant seeking a declaration that he remains employed by the defendant – Whether the termination was a no-fault dismissal

Facts: The applicant, Mr Hughes, commenced employment with the respondent, MongoDB Ltd, a start-up technology company, in September 2013 pursuant to the terms of a letter of offer as technical director for the respondent”s operations in Europe, the Middle East and Africa. The letter of offer set out terms that the applicant”s employment would be subject to a six-month probationary period, and that the notice period related to that employment would be one month for either party, with the respondent reserving the right to furnish pay in lieu of notice. The letter did not refer to, or describe, any disciplinary process applicable to the plaintiff in the course of his employment. On the 8th May 2014 the plaintiff was informed that a decision had been made to terminate his employment and that the last day of his employment was to be that date. The plaintiff asserted that the termination of his contract of employment was a breach of his employment law rights, in particular his right to fair procedures, and damaging to his good name. The defendant asserted that the plaintiff”s employment was terminated with notice paid in lieu in compliance with his terms and conditions of employment and that it was a no-fault dismissal. The plaintiff disputed the position that the termination was a no-fault dismissal, noting that the plaintiff had not been placed on a performance improvement plan. The applicant issued proceedings seeking a declaration that he remains employed by the defendant. He applied for various injunctions requiring the respondent to acknowledge and maintain the position as such; and damages for breach of contract, breach of duty, breach of the plaintiff”s constitutional right to fair procedures, and the intentional infliction of emotional suffering. The injunctions were sought as interlocutory relief in an application brought by notice of motion issued on the 14th May 2014. The High Court heard the application on the 28th May 2014.

Held by Keane J that the test for the employment injunction is set out in Maha Lingam v Health Service Executive [2006] 17 ELR 137, whereby it is necessary for the applicant to show at least that he has a strong case and that he is likely to succeed at the hearing of the action; according to the ordinary law of employment, a contract of employment can be terminated by an employer on the giving of reasonable notice of termination. Having considered the approach to the test in Wallace v Irish Aviation Authority [2012] IEHC 178, Keane J held that the effect of the decision was not to dilute the Maha Lingam test. Keane J did not understand Maha Lingam as authority for the proposition that the court should inflexibly refuse any claim for a mandatory injunction to specifically enforce a contract of employment. Rather, Keane J viewed this as authority for the principle that such mandatory injunctions are exceptional and that applicants must satisfy a strong or clear case test, instead of the prima facie case test normally applicable as part of the Campus Oil v Minister for Industry (No. 2) [1983] IR 88 principles. Keane J held that there is no authority for the proposition that a bad reason that informs, but which is not relied upon to justify, the termination of an employment contract in accordance with its terms, renders that dismissal wrong in law. Keane J held that the decision in Naujoks v Institute of Bioresearch [2007] ELR 25 relied upon by the plaintiff was not authority for the proposition that a dismissal on grounds of performance is to be treated as equivalent to a dismissal on grounds of misconduct in every case thereby attracting an entitlement to fair procedures in either case that is to be implied into every contract of employment.

Keane J held that the plaintiff had not made out a case for the grant of an interlocutory injunction because he has not met the first leg of the test by showing that he has a strong case and is likely to succeed at the hearing of the action and, for that reason, it is not necessary for the High Court to go on to consider either the adequacy of damages or the balance of convenience.

Application refused.

Introduction

1 This is an application for a number of injunctions arising from the termination of the plaintiff's employment by the defendant on the 8 ^th May 2014. The applicant issued proceedings on the 14 ^th May 2014 in which he seeks a declaration that he remains employed by the defendant; various injunctions requiring the respondent to acknowledge and maintain the position as such; and damages for breach of contract, breach of duty, breach of the plaintiff's constitutional right to fair procedures, and the intentional infliction of emotional suffering. The relevant injunctions are now sought as interlocutory relief in an application brought by notice of motion also issued on the 14 ^th May 2014. The Court heard the application on the 28 ^th May 2014.

Background

2 The applicant commenced employment with the respondent in September 2013, pursuant to the terms of a letter of offer dated the 3 ^rd July 2013, to which the applicant signed his acceptance on the 6 ^th July 2013. His position was that of technical director for the respondent's operations in Europe, the Middle East and Africa ("EMEA") in the company's Ireland office. The respondent is a start-up technology company based in California with 30 employees in its Ireland office and a total of 55 employees based in offices throughout the EMEA.

3 The letter of offer stated that a full contract of employment would be presented to the applicant on acceptance of the offer, but that did not occur. The letter itself was quite detailed. It set out various terms of the employment contract between the parties, including a term that the applicant's employment would be subject to a six-month probationary period, and another term that the notice period related to that employment would be one month for either party, with the respondent reserving the right to furnish pay in lieu of notice. The letter does not refer to, or describe, any disciplinary process applicable to the plaintiff in the course of his employment.

4 On the 8 ^th May 2014, as he was returning from a business trip, the plaintiff was informed on the telephone by his immediate superior that a decision had been made to terminate his employment. On the same day, the defendant sent a letter to the plaintiff by e-mail confirming that his employment was terminated and that the last day of his employment with the defendant was to be that day, the 8 ^th May 2014. The letter acknowledged the plaintiff's entitlement to one month's prior notice of termination under his employment contract, for which one month's salary was to be paid in lieu. The letter stated that the defendant would provide the plaintiff with a standard reference.

5 On the 9 ^th May 2014, the plaintiff's solicitors wrote to the defendant asserting that the termination of the plaintiff's contract of employment was a serious breach of his employment law rights and, in particular, his right to fair procedures. It was further alleged to have been seriously damaging to the plaintiff's good name.

6 The defendant's solicitors replied by letter dated the 12 ^th May 2014. They asserted that the plaintiff's employment was terminated with notice paid in lieu on the 8 ^lh May 2014 in compliance with his terms and conditions of employment. The letter goes on to state that the plaintiff's employment had been terminated because the defendant felt that the plaintiff was not a good fit for the company. It further states that the plaintiff had not been dismissed by reason of being found guilty of any misconduct or poor performance.

7 The plaintiff's solicitors wrote in response on the 13 ^th May 2014, disputing the defendant's position that the termination of the plaintiff s contract of employment was a no-fault dismissal. They referred to a number of matters that had been discussed in the telephone call between the plaintiff and his immediate manager on the 8 ^th May 2014, which they stated were clearly "performance related issues." They appeared to contrast this with the defendant's assertion that the plaintiff was dismissed because he was not a "good fit" for the company. The letter noted that the plaintiff had not been placed on a performance improvement plan; nor provided with any support or mentoring to address the alleged performance issues; nor made subject to any disciplinary procedure in relation to those issues. The claim was repeated that the manner of the plaintiff's dismissal was hugely damaging to his good name and reputation.

8 The defendant's solicitors wrote once more on the 14 ^th May 2014. They stated that they were at a loss to understand why the plaintiff's solicitors would wish to characterise...