A senior Department of Finance official told the Dáil's Public Accounts Committee (PAC) today that top civil servants approved a pension payment to former FÁS director general, Rody Molloy, to avoid beginning termination proceedings which could possibly have led to prolonged legal action.
Mr Molloy resigned from the State's training agency last year following a series of controversies and it subsequently emerged he was being paid a pension of €111,000, worth €1 million in actuarial terms, as well as a lump sum and a car.
The deal was agreed between FÁS and the departments of finance and enterprise, trade and employment.
Ciaran Connolly, secretary general of the Department of Finance's argued at a PAC hearing this morning Mr Molloy's resignation was "induced" rather than voluntary as board members had told him his position was untenable.
Mr Connolly said the "threat of legal action" hung over the proceedings.
"If he decided not to resign, either because no terms were offered or because he decided to turn an offer down, and the FÁS board wished to terminate his contract, they would have had to initiate a dismissal process which could have been prolonged," Mr Connolly said.
He added FÁS could have ended up paying a settlement on much the same scale as the one it agreed.
However, a number of committee members, including chairman, Deputy Bernard Allen, argued Mr Connolly and his colleagues should have sought Government approval for the deal, as it fell outside the guidelines for the termination or resignation of chief executives of State-sponsored bodies.
