COURT INTERVENTION:SOME 90 AIB employees who are affected by a decision by the bank not to pay bonuses dating back to 2008 may still be able to seek their payment through the courts, according to legal sources.
However, sources say any case is unlikely to succeed.
John Foy obtained a court order last month forcing AIB to pay him a promised bonus of €161,000. His case was a test case taken to establish the entitlement of 90 others among the 2,400 who had been promised bonuses for 2008. The 90, represented by the Dublin firm McDowell Purcell, are together owed €10 million.
Summonses or civil bills have been issued in relation to the 90, and appearances have been entered, but the cases have gone no further and they are now considering their options. It is not known whether any employees among the other 2,300 who were told they were entitled to bonuses are contemplating legal action.
This follows the intervention on Monday of Minister for Justice Brian Lenihan, who informed the bank that continuing financial support from the Government was contingent on the bonuses not being paid. This constituted an “intervening act” which brought about a change in stance on the part of AIB, which is now refusing to pay the bonuses.
Those told they were entitled to the bonuses can still seek them through the courts, but no legal expert contacted yesterday considered it likely they would win.
The Minister’s intervention constructed a defence for the bank against paying the bonuses, according to one source. His threat not to continue financing the bank could be seen as a “frustration of contract”, making it impossible for the bank to perform the contract it had entered into.
Frustration of contract exists when an event occurs that makes the contract impossible to perform, or that significantly changes the performance of the contract contemplated when entered into.
In addition, the bank could claim it was an implied term of the contract that it had the resources to pay the bonuses. Without State money it would not have the resources to pay them, so this implied term no longer existed.
The employees could argue that the State was interfering with their constitutional right to property by interfering with a contract to pay them money due.
Even if the individuals proved in court they were entitled to the money, the issue of the over-riding public interest would arise.
Already this has been examined by the courts in a number of cases since the economic crisis began, where attempts to challenge the pension levy on the part of groups of workers failed. The courts have been open to the argument that in times of economic crisis unprecedented measures are justified.