The High Court ruled that Coillte could not rely on a ministerial letter to withhold performance bonuses already earned by its former chief executive, David Gunning. It held that section 36 of the Forestry Act 1988 did not permit the retrospective forfeiture of accrued remuneration.
Mr Gunning’s claim was for €299,001, together with interest, under his employment contract. Coillte had employed him as chief executive under a seven-year agreement made in February 2006. Its Remuneration Committee approved payment of his accrued performance-related pay at a meeting on 5 March 2013. The validity of that decision was not challenged in the proceedings.
Coillte relied on a letter dated 8 April 2013 from the Minister for Agriculture, Food and the Marine. The letter said the company would be acting against Government remuneration policy if it proceeded with the payment. Coillte’s board then decided not to pay, citing the letter and its obligations under section 36.
The court found that section 36 allowed ministerial directives concerning remuneration, but did not provide for taking away remuneration already earned. The judge said a directive during Mr Gunning’s contract could have applied prospectively to bonuses not yet earned. The letter in this case came after his contract had expired and could not be used to confiscate accrued entitlements.
The court also found that the purported directive did not meet section 36’s requirements. The letter did not describe itself as a directive, and no evidence showed that it had been issued with the consent of the Minister for Finance, as the section required. The judge said either ground was sufficient to reject Coillte’s position.
The court found that Mr Gunning was entitled to recoup the sums earned during his employment and that Coillte could not deprive him of those accrued entitlements. After inviting submissions on interest, the judge awarded interest at 2% on the sum due, rather than the 8% rate claimed. The judgment does not state the final monetary total including interest.