independent

Friday 18 April 2014

Revealed: Rehab's extraordinary measures to keep finances secret

Minister for Jobs, Enterprise and Innovation, Richard Bruton, T.D., with Angela Kerins, Chief Executive, Rehab Group before the annoucement that Rehab Group plans to recruit 750 staff in its operations over the next three years, with over 400 of those to be based in Ireland. Pic credit; Damien Eagers 16/5/2012
Angela Kerins, chief executive of Rehab Group

EXTRAORDINARY secrecy measures were employed by Rehab Group to avoid the public disclosure of financial reports during a dispute over pay cuts to staff, the Irish Independent has learnt.

The charity and commercial group was forced by the Labour Court to give back about €2m to staff in 2012 after imposing wage cuts of between 5pc and 15pc without proper consultation. Rehab said the eventual cost of the reimbursement payments was less than €2m as senior management waived what they were entitled to.

However, a spokesman did not clarify what the final figure was. Now details have emerged of protracted discussions between the group and union officials at the time where security measures and water-tight confidentiality agreements were used to ensure no financial details came into the public domain.

As part of the dispute, the Labour Court recommended an independent examination take place of Rehab's finances, as it was claiming it was unable to continue to pay staff at previous levels. Rehab had initially refused to have this done when it was requested by SIPTU, which was representing staff involved in the pay dispute.

But the Labour Court subsequently ordered the compilation of independent finance reports and instructed Rehab to share these reports with nominated officials from the union.

The Irish Independent has learnt Rehab employed measures to shroud the process in secrecy. Union officials were only allowed see the reports after agreeing to sign a confidentiality and non-disclosure agreement.

A source with knowledge of the process said numbered reports were given to each individual involved and all of these had to be returned after they were inspected. The source said the locks for Rehab's finance department were also changed around the time the financial reports were compiled.

A Rehab spokesman said that as the reports "contained commercially sensitive information they were subject to normal confidentiality arrangements".

Details of the secrecy measures emerged as the Dail's Public Accounts Committee gears up to question Rehab representatives tomorrow over its use of public funding, which tops €80m a year.

Despite imposing pay cuts on staff as recently as 2009, Rehab's board approved the increase of boss Angela Kerins' salary from €234,000 to €240,000 at some point between 2011 and this year.

EMBROILED

The group became embroiled in a protracted battle with SIPTU over pay cuts imposed on staff in December 2009. It imposed the cuts in line with public service pay reductions which were taking place at the time, arguing there had been a clear historical link between its pay rates and those of the public sector.

The Labour Court found that Rehab could justify the pay cuts, but objected to the manner in which they were imposed.

It found Rehab had introduced the cuts against the wishes of the unions and without exhausting dispute resolution procedures. It also said no good reason had been given for its initial refusal to agree to an independent financial report.

In the end, the court found the financial report backed up Rehab's position that the pay cuts were necessary to maintain its viability. But it decided the cuts should only have taken effect in October 2010, nine months after they were instigated, and that staff should receive retrospective payments.

Irish Independent

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