How Aer Lingus brought high-flier Foley down

As Michael Foley waited on Wednesday to learn his fate, he had every reason to fear the worst. Suspended from the post of chief executive at Aer Lingus, he had made a final attempt a day earlier to save his position. Again, in a two-hour meeting with a subcommittee of the airline's board, he claimed he was innocent of the two sexual harassment charges against him. But a separate inquiry had found him guilty - and that finding was invoked by the subcommittee when it sacked him.

Foley, aged 52, was at home when the subcommittee letter was delivered by courier that morning. It said his conduct was "less than satisfactory", adding that the board could no longer have trust and confidence in him.

That spelled the end of his nine-month career in the State airline. The final four months were marked by extreme pressure after a SIPTU worker-director, Joan Loughnane, made a complaint against him in February. His personal assistant, Anne Lawlor, made another complaint in March.

Last summer, when Foley was president and chief executive of Heineken USA, he was wooed home to Ireland to take one of the most senior and prominent positions in the State sector. Now he had been fired, and in a very public fashion. He was "shocked and disturbed".

Whether he plans to take legal action against the company is not known. When asked, one of his spokesmen says nothing is ruled out. Foley declines to be interviewed. He would do all in his power to ensure the "truth" came out, the spokesman said. Foley has already brought one case to the High Court seeking to block the disciplinary process against him. But his application was refused.

The investigation into the allegations made against Michael Foley was carried out by a subcommittee established by Bernie Cahill. As chairman of Aer Lingus, it was Cahill who led the group that headhunted Foley. Something of a colossus at the company he has chaired since 1991, Cahill was the mastermind behind its rescue from the brink of liquidation in the mid1990s.

A condition of that recovery, however, was that workers received low pay. As the airline thrived in the late 1990s, earning record profits ahead of a planned flotation, staff became angry. Facing into a less secure future in the private sector, they wanted higher pay before losing the safety net of the State. The situation worsened last year when most cabin crew defected to Impact from SIPTU. That soured inter-union relations at a time when tension with management was also rising.

One insider said: "Aer Lingus has this dysfunctional culture about it. It's like a dysfunctional family. Everybody is watching everybody else. Levels of trust are very low."

That situation was inherited by Foley and it became crucial to his defence during the sexual harassment inquiry, which was carried out by John Keane and Rose Hynes. They found the complaints against him were "correct in all material respects". Foley rejected the finding as perverse, but was effectively suspended by the board soon afterwards.

The guilty finding had devastating consequences for Foley, who enjoyed an annual package worth more than £400,000. Like other senior business people, he drove a Mercedes provided by the company. It also paid for his accommodation in a south Dublin apartment.

The potential damage to his good name was even more significant. Concerned about coverage of his case in the media, he told Keane and Hynes: "This is assassination, this is lethal. This is worse than death. There is a reason for a death, you get on with life. This has destroyed my family. And I am telling you it is not going to happen, over my dead body."

Crucially, Foley alleged that elements within Aer Lingus had conspired against him because of his plans for the airline. He told the inquiry: "Two people decided to frame me and then someone went public and they f****d me." This was in addition to his robust denials of any sexual harassment.

The chief executive of the Equality Authority, Niall Crowley, does not want to comment on the situation at Aer Lingus. "People are slow to report and slow to take up cases," he said of the general situation.

He added that most cases are not reported, a significant number are settled informally, and only a small number are pursued formally.

Deciding on an appropriate sanction is another sensitive matter. According to experts, some complainants do not want to see the perpetrator sacked - they just want the harassment to stop. Fear that a complaint might cost someone their job is cited as one factor behind the low rate of reporting.

So what alleged conduct prompted the complaints against Foley?

He has always denied the claims made by Joan Loughnane, who, like Foley, is in her early 50s. She is not married. A member of cabin crew with about 30 years service, including long periods on the transatlantic routes, her allegation related to a single incident last November, just weeks after Foley had joined Aer Lingus.

Striking workers had cancelled flights and she met Foley in his office after a meeting of the airline's board. Loughnane alleges Foley suggested to her that he was alone and she was alone and that they could "get together" on some occasion. Foley was also alleged to have pointed out that he and Loughnane lived not far from each other.

"In overall terms, she felt she had been propositioned in a way that was wrong," said one person familiar with the case.

Foley has also always denied the complaints made by Anne Lawlor, who is separated from her husband. A senior secretary in her 40s, she was personal assistant also to Bernie Cahill. The rooms used by Foley and Cahill faced each other - Lawlor's was in between.

Lawlor's complaint did not centre on a single incident. She had also alerted a human resources manager, Maria Kelly, about her concerns in relation to Foley's alleged behaviour.

"It was closer to bullying than pure sexual harassment," said one person of the complaint.

Among other allegations, Lawlor complained that Foley had invaded her personal space, touched her hand inappropriately and had made inappropriate comments. It is believed she alleged he asked her whether she was pregnant when she sought time off to attend appointments with her doctor.

She also said he asked for her home telephone number. Denying this was inappropriate, Foley is thought to have told the investigating committee it was normal for a person in his position, who travelled because of work, to be able to contact his secretary at all times. But Lawlor is believed to have alleged Foley said "in case I'm free some evening" when asking for her telephone number.

He was also alleged to have asked Lawlor whether she was in a relationship and asked whether she would be accompanied or not when attending a Christmas function for managers.

According to Lawlor, this alleged conduct led her to feel harassed. With two exceptions, the report found the matters consisted of sexual harassment. It is unclear what those exceptions were.

The inquiry found Foley guilty in accordance with the definition of sexual harassment in the relevant Aer Lingus policy, Respect and Dignity in the Workplace. "This is defined as unwanted conduct based on a person's gender which is offensive to the recipient, and which might threaten a person's job security, or create an intimidating working environment."

Of sexual harassment cases in general, one expert said: "Whether the same behaviour amounts to sexual harassment in some instances or not anything in others depends on the context and relationships. A joke told between two friends can be nothing, or a completely different experience."

In Foley's view, other forces were at work when Loughnane and Lawlor made their complaints. However, the company said he produced no evidence to support his claims of conspiracy.

Hired to float the airline on the stock exchange, Foley faced immediate difficulty with the company's unions. Citing tension between the unions, Foley asked why Loughnane's complaint was made only in February, just days after management concluded an important negotiation on cabin crew pay with Impact.

A High Court affidavit signed by a solicitor acting for Aer Lingus gives insight into Loughnane's explanation. Seamus Given, the solicitor, said that rumours related to Foley's alleged behaviour at a cabin crew ball in Shannon during January were linked to Loughnane's decision.

His affidavit said: "The committee, as it makes clear in its report, found that the rumour and gossip relating to that matter was of some relevance in ascertaining the reason for and/or timing of Ms Loughnane's complaint, but only in that respect was it relevant."

According to a source: "She was motivated by a view that what might have happened to her was not a once-off and might have happened to others."

When contacted this week by The Irish Times, Loughnane declined to discuss the case. "The committee upheld the complaint," she said. "The company subsequently dealt with the result of the investigation. I continue to be bound by confidentiality which I agreed to at the commencement of the investigation."

In his defence against Lawlor's allegation, Foley alleged Cahill had "pressurised" her into making a formal complaint. Foley claimed Lawlor was "adamant" in her evidence that her complaint would not have been made had it not been for a conversation with Cahill, who had called her into his office and asked her if she had a complaint.

"He said he had documents which she could fill out in order to do so. She said that she had no idea what he was referring to. She said he was quite strong in pursuing the issue with her. She said he told her that he had received another complaint and when she asked him who it was, the chairman told her it was Joan Loughnane."

Cahill denied pressurising Lawlor. Given's affidavit cites a letter written by her solicitor to Aer Lingus. It said: "While our client acknowledges that she may not have made her complaint but for the conversation with Mr Cahill, it is entirely inaccurate to state that she made the complaint because the chairman pressurised her into it."

The Irish Times was unable to contact Lawlor this week.

Foley also alleged Cahill had asked him to stand aside and said he had colluded with the inquiry. Cahill denies the claims.

Foley has gone to considerable expense to defend his name. By the time of his effective suspension, he had already hired one of the State's largest law firms, A&L Goodbody, and two public relations consultants, Paul White and Martin Larkin.

He hired senior counsel and junior counsel when, after his effective suspension, he went to the High Court seeking to block the company from taking further disciplinary action. After almost a week of hearings, during which Foley was accompanied by his wife Noreen, Ms Justice Carroll refused to grant an injunction.

He leaves the company as it faces a grave financial situation linked to the US downturn, foot-and-mouth and a spate of strikes last winter. That apparently led Mary O'Rourke, the Minister responsible for Aer Lingus, to raise the possibility of a trade sale. No one says buyers will rush in to take the airline out of the State's nest, though certain groups have expressed interest. Many believe O'Rourke was sending a warning to the company to get its house in order.

This is a difficult task and will take time. As Foley plots his next move, this will be far from his immediate priorities.