Last month’s summary firing of two Portuguese airline chiefs may have been illegal, Portugal’s Finance Minister has revealed, in what is just the latest twist of the knife for beleaguered carrier TAP Air.
In March, the Portuguese government sacked TAP Air CEO Christine Ourmières-Widener and Chairman Manuel Beja “with just cause” and therefore no severance package, after an investigation by Portugal’s general finance inspectorate uncovered problems with a previous severance agreement with former board member, Alexandra Reis.
Now though, it has been revealed the government had no legal backing for the firings.
1. Background
Alexandra Reis had been involved in TAP’s money-saving restructuring in which over 3000 people were made redundant. When it came to her own departure, she initially asked for €1.5 million and was eventually offered a third of that sum, which seemed to be presented at the time as a success in a TAP document at the time:
“Despite the initial claim of Alexandra Reis, amounting to €1,479,250, it was possible to reduce and agree an overall gross aggregate amount of €500,000 to be paid.”
However, in December 2022, Reis’s payment was reported as illegal, and she was forced to return all but 10% of the severance. She also had to resign from her new position as Secretary of State to the Treasury. Infrastructure Minister Pedro Nuno Santos also stepped down.
2. Fallout
Since December, a controversy has been growing over those sackings. Ourmières-Widener called her own dismissal “illegal” and the Social Democrat opposition party warned that her claim could lead her to be awarded financial compensation, continuing the vicious circle of problems for TAP and the government.
3. The latest twist
Last week Parliamentary Affairs Minister Ana Catarina Mendes and Cabinet Minister Mariana Veira da Silva appeared to dismiss the legal concerns. They both said on Wednesday that the government had indeed taken legal advice that supported the sackings, but both refused to send a copy of the advice to parliament.
Now the two officials and the government face accusations of lies as the Finance Minister Fernando Medina has said the government did not in fact seek any legal assessment of its decision to fire the two TAP chiefs.
Medina described “very clear” reasons for the firings, set out in the finance inspection of Reis’s severance payment, but said there was no legal opinion attached.
His words not only increase the likelihood of a successful and costly lawsuit by the disgraced airline executives but could also further hamper TAP Air’s already tortuous privatisation process.
Opponents are now calling for Medina’s resignation. Twitter saw Liberal Initiative party leader Rui Rocha call the situation a “festival of incoherence and total disrespect for parliament.”
