Replacement process faces court challenge

State company Bord na Móna and its managing director, John Hourican, are heading for the High Court in a dispute over his retirement settlement.

Mr Hourican's lawyers are due to seek an order from the court on Monday preventing the company from seeking a replacement for him. He is due to step down at the end of this year.

The case is rooted in a dispute over his status as an employee of the company. Mr Hourican, who received €365,000 last year in pay and benefits, has worked for the board for the last 18 years. He was employed first as financial controller, and then hired as managing director.

State company chief executives and managing directors retire after seven years, as do Government department secretaries general. The company employed Mr Hourican on yearly fixed-term contracts rather than for a seven-year term, an option sometimes taken by executives in State companies and bodies.

However, since 2003, workers who are employed on more than three successive fixed-term contracts are treated as permanent.

Mr Hourican wrote to Bord na Móna earlier this year pointing out this fact. As he is 61, he sought compensation for the fact that he would be retiring four years early.

The company refused this, and it is understood he subsequently launched the court action.

Bord na Móna had already begun the process of seeking a new managing director. Next Monday's hearing is simply designed to halt this process pending the outcome of a full hearing into the case.

The company's results, published yesterday, show that Mr Hourican's salary last year was €229,000, while he was paid a bonus of €57,000 and the board paid €57,000 into his pension fund. Fees and benefits brought the total to €365,000. He received a total of €322,000 in 2005.

Bord na Móna's original role was to manage and exploit the State's peat resources. However, since Mr Hourican took it over at the beginning of the decade, the Government gave it the go-ahead to diversify. He has always made it clear that he is keen to broaden its operations.

The company has since expanded into power generation, through the purchase of Edenderry Power, which operates a peat-fired station in Co Offaly and waste management.

Neither side would comment on the legal dispute yesterday.