FORMER DIRECTOR general of Fás Rody Molloy may not have been entitled to his “enhanced” severance package worth over €1 million in total if he resigned from the organisation of his own volition, it was claimed last night.
Labour Party TD Róisín Shortall last night highlighted a clause in Department of Finance guidelines which stated that enhanced severance payments could only be made to a chief executive or head whose employment contract was terminated by the board.
The clause adds: “It is not therefore appropriate to make such payments where the initiative for the termination of a contract comes from the CEO concerned.”
Ms Shortall, a member of the Dáil Public Accounts Committee, last night asked Tánaiste Mary Coughlan and Taoiseach Brian Cowen to clear up the confusion.
She said previous statements by Mr Cowen and Ms Coughlan had implied that Mr Molloy had resigned on his own initiative. She referred, in particular, to Mr Cowen’s contribution in the Dáil last November where he commented that Mr Molloy had resigned of his own volition.
Mr Cowen said Mr Molloy had done “the honourable thing on behalf of the organisation that he leads and tendered his resignation to the board of the organisation, and I defend him on that”.
Ms Shortall said it was now incumbent on the Taoiseach to explain whether Mr Molloy was sacked or went of his own accord.
“If he was sacked he would have been entitled to a severance package. But the Taoiseach and Tánaiste have both said in the past that he resigned of his own volition. In that situation, there is no basis in law for him to get a generous settlement.”
A spokesman for the Department of Finance last night said that it was its understanding that the initiative to terminate Mr Molloy’s contract early had come from the board of Fás, thus bringing it under the terms of the guidelines.
The Department of Enterprise spokesman referred The Irish Times to a statement from last week which states that his “severance arrangements were broadly in line with the arrangement he could have claimed should his contract have been terminated”. In advance of the Public Accounts Committee probing the issue further, the department stated it could make no further comment.
Ms Shortall said the clause in the guidelines was clear in terms of dealing with the severance of early retirement for chief executives of State-sponsored bodies.
She said that if he initiated the termination, an enhanced severance package was not appropriate. She again pointed out Mr Cowen had clearly stated that Mr Molloy left of his own volition. Nowhere was it mentioned, she said, that he was either sacked or pushed out by the board or by the Tánaiste.