Trust and confidence eroded by disclosures

In the end, Aer Lingus moved quickly yesterday to sack its chief executive, Mr Michael Foley. Just a day after he made an oral presentation to a board subcommittee assessing a report which upheld two complaints against him of sexual harassment, he was told the State airline was terminating his contract because it could no longer have the necessary trust and confidence in him.

It is understood the letter he received said: "The committee is of the view that your conduct was less than satisfactory having regard to your position as chief executive, your contract of employment and the obligations placed upon you as chief executive."

Yet the development, which "shocked and disturbed" Mr Foley, was long in the making. For the chief executive, who has always rejected the complaints, termination of his contract brought four months of uncertainty to an end.

In that period, he went to considerable expense to protect his position, engaging the services of one of the State's largest legal firms, A & L Goodbody, and two public relations consultants. In a High Court action during which Mr Foley sought to injunct the subcommittee from taking action against him, he also engaged a senior and junior counsel.

In the event, Ms Justice Carroll refused to grant Mr Foley such an injunction. Costs were reserved.

The complaints against him were made in February by a SIPTU worker director, Ms Joan Loughnane, and in March by his former personal assistant, Ms Anne Lawlor.

Their allegations were investigated by a separate board subcommittee, whose members - Dr John Keane and Ms Rose Hynes - concluded after a lengthy inquiry that the complaints against Mr Foley were correct in all material respects.

This was a devastating blow to Mr Foley, who had claimed he was victim of a conspiracy to "frame" him. The airline argued he produced no evidence to support that claim.

His allegation that the Aer Lingus chairman Mr Bernie Cahill had "colluded" with the investigating subcommittee was rejected by Mr Cahill. And Ms Lawlor's solicitor denied Mr Foley's claim that she was "adamant" in evidence that her complaint would not have been made but for a conversation with Mr Cahill.

Mr Foley had noted that Ms Loughnane's complaint was made in the same month as his conclusion of a negotiation with cabin crew represented by IMPACT, who had left SIPTU. The alleged incident had occurred four months earlier, in November, just weeks after Mr Foley's arrival at Aer Lingus.

In a five-paragraph statement yesterday, Mr Foley said he would not relent in efforts to ensure that the truth around the allegations would prevail. "I reiterate my total innocence of the allegations made against me and will take all necessary steps to clear my good name."

He declined to be interviewed. His spokesman said nothing had been ruled out when asked whether Mr Foley would take further legal action against the company.

Mr Foley's statement said he had been hired to prepare the company for a new era of aggressive and intense competition, deregulation and new challenges.

He claimed: "I had also made the board aware that to be successful in the future significant changes would have to be made in the current way the company is organised and managed. Many of these changes would challenge the comfort zones and old ways of doing business . . ."

He added that unfortunately what he called initiatives "to introduce the necessary strategic thought leadership to the business" had been interrupted. The termination of Mr Foley's contract will cost him a salary of about £250,000 with additional pensions benefits per annum. He also had the use of a new company car, a Mercedes, and an apartment in south Dublin, paid for by the company.