A review of severance payments in public sector bodies by the Comptroller and Auditor General has revealed that the value of severance awarded between 2011 and 2013 under six public sector schemes was €18 million. Nearly €11 million related to non-cash elements in the form of pension enhancements.

The examination found broad compliance with scheme rules in most cases, with the exception of a scheme for chief executives of State bodies. Two State bodies made severance payments, in the form of pension enhancements, between 2011 and 2013 without the required prior approval of the Department of Public Expenditure and Reform. The estimated total value of the severance awarded in those two cases amounted to over €1 million.

The CAG review identified fourteen high-value discretionary severance payments, amounting to nearly €1.5 million, made by public sector bodies between 2011 and 2013. Enhanced pension terms were not granted in those settlements.

Discretionary Payments

Six of the discretionary severance payments, amounting to over €540,000 (including legal costs), were made by the Central Bank. In the CAG’s view, the Bank did not adopt a standard approach for assessing and determining those cases, or for approval of the severance awards.

Those receiving severance payments included an individual that had not yet commenced employment with the Bank, two employees who each had less than two years’ service and a long-term contractor who had never been an employee of the Bank.

In Association with

Confidentiality clauses were a feature in every agreement underpinning the discretionary severance payments examined. “A confidentiality clause should not attempt to circumvent a statutory disclosure requirement or to prevent employees from speaking out. Two of the five bodies examined had used confidentiality clauses that did not comply with the good practice standards set out in the report,” said the CAG.

Central Bank Response

Responding to the CAG report, the Central Bank said in a statement:  “The Bank, in recognising its responsibility to balance the use of public monies and minimise the risk to its operations, has made a number of changes to operating procedures and practices including:

• The Bank has shortened the probationary period from twelve to six months to ensure that performance and development issues are dealt with in a timely and focussed way and to ensure that sufficient time is allowed to address any concerns.

• The Bank has made amendments to its pre-employment processes.

• Bank practices have been amended to further distinguish between permanent employees and contract workers."