Labour challenges Fás deal claims

LABOUR has challenged Government claims that the €1m “golden handshake” for former Fás director general Rody Molloy was in line with official procedure.

The Department of Finance has said Mr Molloy’s pension package was agreed mainly on the basis of 1998 guidelines entitled Severance and Early Retirement for Chief Executives of State Sponsored Bodies.

Those guidelines allow for the provision of pension top-ups, lump sums and severance payments for chief executives retiring early. But the guidelines were drawn up for cases where the Government or State organisation in question is seeking the early retirement of the chief executive.

If it is the chief executive who wants to go early, additional payments should not be made, according to the guidelines.

“Application of the foregoing terms would be strictly conditional on completion of contract, unless the [State] … decides to terminate the CEO’s employment before the termination of the contract. It is not therefore appropriate to make such payments where the initiative for the termination of a contract comes from the CEO concerned.”

Labour TD Roisin Shortall said the Taoiseach was on record as saying that Mr Molloy resigned voluntarily.

In particular, Ms Shortall quoted an extract from Brian Cowen’s statement to the Dáil in November when he said Mr Molloy’s resignation was “of his own volition”.

“If Mr Molloy resigned of his own volition, then there was no basis for the huge financial package he was awarded... If Mr Molloy did not resign of his own volition, then the Dáil has been misled in a most serious way by the Taoiseach,” she said.