A proposed near-€1 million severance deal for airport operator DAA chief executive Kenny Jacobs is off the table after Minister for Transport Darragh O’Brien blocked the payment, raising yet more questions about the months-long standoff at the top of the State airports group.
Mr O’Brien in November refused to approve the €960,000 payment to Mr Jacobs, which was agreed in September after mediation between the chief executive and the DAA board in talks chaired by industrial relations troubleshooter Kieran Mulvey.
The Minister asked Mr Jacobs and the board to pursue reconciliation instead of the payment, prompting a new round of talks between lawyers for the parties. Such talks ended about a fortnight ago without an agreement to settle the turmoil in the company that runs Dublin and Cork airports.
Relations between the board and Mr Jacobs broke down over the summer after directors concluded the chief executive was unsuitable for the post.
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The rift followed two protected disclosures against the chief executive, and board concern about other issues that emerged in relation to him when a senior barrister was investigating the formal complaints.
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Such complaints were not upheld by the barrister. But the board did not investigate the other issues of concern because it opted instead to send the case to Mr Mulvey for mediation.
After the most recent talks ended between lawyers for Mr Jacobs and the board, Mr Jacobs indicated to the board that he wished to reconcile with it. The board has yet to respond to Mr Jacobs on that question but is said to be close to the point of decision.
However, the parties remain far apart. Some close observers believe reconciliation is at this point unlikely, raising questions to whether the board takes any further action in relation to Mr Jacobs.
“The board declines to comment,” the DAA said in response to questions submitted to the board and Mr Jacobs. There was no reply from Mr Jacobs.
In its interim reply in November to the Minister’s refusal to approve the settlement deal, the board told Mr O’Brien its stance on Mr Jacobs was unchanged since directors unanimously approved the package in September.
The decision to enter mediation talks was one of three options the board considered in August. The others were to initiate a disciplinary process against the chief executive or for the board to vote no confidence in him.
Such options were before the board again in November after the Minister blocked the severance deal.
It was readily acknowledged in Government and DAA circles that such moves would be very likely to prompt court action by Mr Jacobs.
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Although the prospect of litigation risks escalating legal costs, the outcome would be determined outside the political realm in which it was Mr O’Brien’s responsibility to approve or block the mediation deal.
Other options now on the table for the board would also be likely to precipitate legal conflict with Mr Jacobs.
They include the option of initiating a new investigation into the separate issues that emerged during and after the original investigation by Mark Connaughton SC into the protected disclosures. That option also includes the prospect of a re-examination of the matters investigated by Mr Connaughton.
In the wake of its interim reply to the Minister last month, the board has still not given its definitive response. That definitive reply now depends on the board’s decision on the next steps.
Mediation was considered a low-cost settlement option with fewer legal risks. Board figures believed it was the clear preference, in the circumstances, of Mr O’Brien’s department.
The mediation deal also required the approval of Minister for Public Expenditure Jack Chambers, who has said nothing publicly about the row.
