Smith settlement is a difficult pill to swallow for IFA

Lobby group will now end up paying out more than the original severance package

Former IFA general secretary Pat Smith: walks away with €1.9 million and legal costs. Photograph: Eric Luke

Former IFA general secretary Pat Smith: walks away with €1.9 million and legal costs. Photograph: Eric Luke

 

In the court of public opinion, the former general secretary of the Irish Farmers’ Association (IFA), Pat Smith, will go down as one of the most controversial figures in Irish farming.

A man who was paid half a million euro to run a lobby group that relied on subs and levies from members who typically earn about €15,000 a year, barely 3 per cent of their representative’s income.

However, in the High Court on Thursday he was the wronged employee, denied an agreed severance package and defamed on his way out the door.

The fact that he walks away with €1.9 million and legal costs – said to be substantial – for two separate actions relating to breach of contract and defamation will incense members, who are facing a very uncertain future with Brexit looming on the horizon. It suggests the IFA may have been over a barrel legally.

Smith left the organisation in a hail of recrimination back in November 2015 but not without a severance package, signed off on by then-president Eddie Downey, a move that would later force Downey’s resignation.

The IFA’s overt tactic of isolating Smith when the scandal broke wasn’t controlled and resulted in series of rushed media statements and several unscheduled media stints, most notably by stand-in boss and deputy president Tim O’Leary, who repeatedly said on RTÉ’s Six-One news that Smith had been fired.

For Smith’s legal team, led by employment law specialists Daniel Spring & Co, this was an open and shut case.

Legal costs

With the legal costs for both sides said to be over €500,000, the IFA now finds itself in a position of having to fork out more than Smith’s original €2 million severance package which caused so much controversy in the first instance.

This begs the question why it waited so long to pull the plug on its defence – the case was due to be heard over four days in the High Court next week – before settling.

For an organisation with an annual turnover of close to €20 million, this is no small chunk of change and it is money that is being channelled away from causes such as Brexit and Mercosur, the EU’s trade deal with South America, both seen as a major threat to livelihoods here.

One insider said members were “stupefied” by the size of Smith’s settlement. Whether it accelerates a further downturn in IFA membership in Connacht and Ulster – the poorer sections of Irish farming – is another thing.

The official position from Bluebell, the IFA’s Dublin headquarters, where IFA council members were informed of the Smith settlement early on Thursday, was that they were not looking in the rear-view mirror not when so many big issues are facing Irish farming.

The association was swift to reveal details of the financial settlement even though they weren’t revealed in court, mindful of the potential clamour that would have ensued had it not divulged the amounts.

Financial settlement

In contrast, RTÉ declined to reveal details of the financial settlement it agreed with Seán Gallagher as a result of his action against the broadcaster arising from the “Tweetgate” incident during the 2011 presidential election campaign.

Smith’s defence of his generous salary has always been that it had been sanctioned by the organisation and that he had received less than his predecessor Michael Berkery, who had been chairman of FBD insurance up until recently.

Berkery, the IFA’s general secretary for 25 years up to 2009, had warned his former organisation against releasing details of his salary as they are covered by a confidentiality agreement, and it duly obliged, divulging only details of Smith’s income as part of a transparency report in the wake of the debacle.

Brexit has allowed the IFA regroup and refocus behind its president, Joe Healy, who was elected as an anti-establishment candidate in the wake of the pay controversy.

While Smith’s payout will be unpalatable for many, it is unlikely to re-ignite the same level of controversy, and Smith’s plan to donate €1 million of it to charity may defuse tensions further.