Former Permanent TSB CEO David Guinane has settled his High Court action against his former employer over the terms of his departure from the bank in 2012.
He had claimed he was entitled to a severance payment of over €866,000 but claimed he was offered, and refused, a payment of €175,000, plus 11 and a half months’ salary.
In proceedings against PTSB, Mr Guinane, who worked for the bank for more than 25 years, alleged breach of contract and that the bank denied him fair procedures during his departure.
He claimed he has a contractual right to a payment, estimated at €866,000, under the bank's Voluntary Severance Scheme (VSS) and that claim was the key issue in his case, the court heard.
He further claimed his reputation was damaged by his former employer and the bank acted in breach of its duty towards him and was negligent.
He also sought damages, including punitive and exemplary damages.
PTSB, represented by Paul Gallagher SC, had denied the claims and pleaded Mr Guinane received what he was entitled to when he was made redundant.
The case had opened before Ms Justice Leonie Reynolds last month and was expected to run for at least eight days.
However the Judge was informed the case had settled and could be struck out. No details of the settlement were given in open court.
The court heard that 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 of the organisation.
As part of that restructuring, all senior positions in the banking entity were advertised.
Mr Guinane applied for CEO in the new bank. 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.
Payments under the VSS were based on the person's salary and the number of years they worked at the bank.
Mr Guinane was told, due to re-capitalisation of the bank, the Minister for Finance had capped severance payments to senior staff.
While Mr Guinane was told any severance payment would have to be approved by the Minister, it was claimed the Minister was never asked about any payment to Mr Guinane.
The cap it was claimed seemed to have been decided on by the bank itself.
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, which was subsequently withdrawn by the bank, and informed Irish Life & Permanent chairman Alan Cook he would take legal action.
Mr Guinane's case was that 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 accepts conversations took place between Mr Cook and Mr Guinane on the dates alleged but denied Mr Cook made the alleged statements to Mr Guinane.
