Senator: Kavanagh may be legally entitled to continue beyond 2021

Controversy surrounding the reappointment of Horse Racing Ireland's CEO Brian Kavanagh continues to rumble on as Fine Gael senator Michael D'Arcy suggested Kavanagh will not be legally obliged to vacate his position in five years' time, regardless of any written commitment provided to that effect.

HRI chairman Joe Keeling and members of the HRI board were called before an agriculture committee hearing in the Oireachtas last week to explain the background to Kavanagh's reappointment for an unprecedented third term as CEO.

Government guidelines recommend no CEO of a state body serves more than one seven-year term. Kavanagh has already served two, and in September he began a third term, having signed a new deal for a five-year duration.

At the committee hearing on Thursday, the HRI representatives came under strong questioning from Fine Gael senators D'Arcy and Tim Lombard over the original contract that was put to the department of agriculture pertaining to the proposed third-term.

Keeling subsequently confirmed it was the minister for agriculture Michael Creed who amended the contract to a specific five-year term, and Keeling agreed to supply the signed document.

However, D'Arcy maintains such an agreement would have no legal standing, given HRI vice chairperson and the board's remuneration committee member Meta Osborne revealed at Thursday's hearing that she received two pieces of independent legal advice – in 2011 and 2016 – to the effect that there was the "potential" for Kavanagh to invoke his right to a contract of indeterminate duration (CID).

Meta Osborne: processes put in place at senior management level in HRI 'with a view to identifying internal candidates'Credit: Caroline Norris

"What I took away from the hearing was that Brian Kavanagh has a CID and nobody has the authority to put anybody else into [his] position as long as that is in place," D'Arcy told the Racing Post.

"It is my understanding the CID, and his employment right, is stronger than anything he signs now."

Asked if he could envisage a situation unfolding whereby Kavanagh could invoke his right to a CID and continue beyond 2021 as HRI CEO, D'Arcy replied: "I could – yes. The reality is that it's a matter of employment law. CIDs are a very strong employment contract. Even if he decides to sign now, I'm not sure it will hold water in five years' time.

"The employment law, when it is taken through the courts, will always overrule a guideline or a code of practice; there is no grey area there; it has been tested through the courts numerous times."

D'Arcy indicated he has sympathy for the HRI board's position.

"I think the current board of Horse Racing Ireland can't be blamed or accused of anything. The first occasion that they checked was 2011, and it was way too late at that stage."

Fianna Fail TD Charlie McConalogue was another who grilled the chairman and board members, and he feels minister for agriculture Michael Creed has more questions to answer. Creed was not in attendance on Thursday but did face a previous hearing in relation to the matter.

"At the end of the meeting I asked if the committee would write to the department of agriculture seeking clarifications on what exactly they knew of this contract," McConalogue said yesterday.

Michael Creed: minister for agriculture is responsible for filling the two vacant HRI board positionsCredit: Don Macmonagle

"Because when the minister engaged with us, he didn't at any stage refer to the issue surrounding a contract of indefinite duration, and that certainly seems to have been a consideration that has run through the reappointment of the CEO from the outset.

"It needs an explanation as to why he didn't refer to that. It would appear in this case that a CEO developed contractual rights in terms of their employment, which would have been contrary to government policy, which states that terms of office should be restricted."

The contract for Kavanagh's second term, which began in 2009, was not signed until 2011, which it is understood may be the source of the potential for a CID, given that the matter of the initial fixed-term contract was not resolved.

"It is something I will be seeking clarification from the department of agriculture on," McConalogue added of the possibility of Kavanagh's CID continuing regardless of any new deal.

"That specific question requires an answer. Horse Racing Ireland is a semi-state body that is provided with an awful lot of money, so someone having the potential for a CID is a big issue for them to deal with."

Kavanagh's appointment was confirmed after extensive lobbying of department of agriculture officials by Keeling, and, contrary to the 2009 reappointment, the position was not advertised and nor was Kavanagh interviewed.

In his opening statement on Thursday, Keeling apologised for the shortcomings in the process of the reappointment and stated he "did not for one minute focus on the legalities" surrounding the issue.

He stated that Kavanagh "was the succession plan", while Osborne indicated that a subcommittee is in place for succession planning into the future.

The agriculture committee advised that a value-for-money assessment of HRI's spending of government funding – which will rise to a record €64 million in 2017 – should be undertaken, having first been proposed by independent economic advisers Indecon in 2012. It was also suggested there should be an independent review of corporate governance at HRI.

TD Clare Daly of Independents4Change also insisted she will be pursuing the matter further.

"Issues of concern regarding Mr. Kavanagh's potential CID should have been explored fully and comprehensively by the board, and the options open to them carefully weighed, but there is no indication they were," Daly said yesterday of the hearing. "The board were effectively sidelined, and there is no acceptable reason for that to happen."

Kavanagh, whose basic salary of €191,000 also breaches current state guidelines, could not be contacted for comment yesterday.

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Richard ForristalIreland editor

Published on 17 October 2016inNews

Last updated 19:54, 17 October 2016

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