Former Permanent TSB chief executive David Guinane has settled on undisclosed terms his High Court action over the terms of his departure from the bank in 2012.
He had claimed he was entitled to a severance payment of more than €866,000 but instead was offered a payment of €175,000, plus 2½ months’ salary, which he had refused.
In proceedings against PTSB, Mr Guinane, who worked for the bank for more than 25 years, alleged breach of contract and denial of fair procedures during his departure. His claim he had a contractual right to a payment, estimated at €866,000, under the bank’s Voluntary Severance Scheme (VSS) was the key issue in his case.
Damages
He also claimed his reputation was damaged by his former employer and sought damages, including punitive and exemplary damages.
PTSB, represented by Paul Gallagher SC, denied the claims and pleaded Mr Guinane received what he was entitled to when made redundant.
The case opened before Ms Justice Leonie Reynolds last month and was expected to run for at least eight days but the judge was told this week it had settled and could be struck out. No details of the settlement were disclosed.
The court heard Mr Guinane, represented by Paul Anthony McDermott SC, with Shane Murphy SC, was CEO of Permanent TSB when it was part of the Irish Life & Permanent Group.
After the group was recapitalised by the State for €4 billion in 2011, the banking section was separated from Irish Life under a restructuring which also involved all senior positions in the banking entity being advertised.
Mr Guinane applied for CEO but the position was given to an English banker, Jeremy Masding, in January 2012.
Mr Guinane claimed he was entitled, like other senior employees at PTSB, to a payment under the VSS, made on the basis of the employee’s salary and number of years worked at the bank.
Capped
Mr Guinane was told, due to recapitalisation of the bank, the Minister for Finance had capped severance payments to senior staff. He claimed, while he was told any severance payment would have to be approved by the Minister, the latter was never asked about any payment to Mr Guinane. The cap seemed to have been decided on by the bank itself, he alleged.
It was claimed the bank’s justification for its initial offer seemed to be based on a media report stating severance payments to senior employees at another State acquired bank had been capped at €175,000.
Mr Guinane rejected that offer, subsequently withdrawn by the bank, and told Irish Life & Permanent chairman Alan Cook he would take legal action, it was claimed. Mr Guinane’s case was Mr Cook had informed him, if he did so, he would be “destroyed by the media” and “the Department would not back down”.
The court was told the bank accepted conversations took place between Mr Cook and Mr Guinane on the dates alleged but denied Mr Cook made the alleged statements to Mr Guinane.
