A member of staff at the Central Bank has been accused by management of soliciting money from two employees as a fee for securing permanent jobs there.

An independent investigation is to be held into the matter after the Labour Court found that a disciplinary inquiry conducted by the bank was "tainted by procedural unfairness".

The bank had demoted the employee after what it called a "comprehensive and thorough investigation" of the allegations against him.

A final written warning was also placed on his personal file.

His union, Siptu, claimed the bank had handled the situation in a manner "completely contrary" to disciplinary procedures agreed between the Irish Printing Federation and the Dublin Printing Group of Unions.

The matter was referred to a rights commissioner, who found in favour of the bank, saying the sanctions against the employee were not too excessive, the procedures had been fair and that "natural justice prevailed".

Siptu appealed the commissioner's decision to the Labour Court.

The union said that the senior bank officials who conducted the investigation should have been aware of the likelihood of a disciplinary hearing and consequently the need to preserve all relevant documentation.

"The fact that they did not do so, together with the unavailability of this vital material, was not given sufficient weight by the bank in arriving at their decision," Siptu argued.

It asked the court to overturn the original verdict and penalty as a result of the "inconsistencies and procedural flaws" that had occurred.

The bank told the court it had an obligation to investigate every allegation of misconduct particularly when the allegation was of a monetary nature.

"A comprehensive and thorough investigation was carried out. The employee engaged fully with the process, the subsequent disciplinary hearings and the appeal hearing."

The bank said it was satisfied that the disciplinary sanctions were not disproportionate "given the serious nature of the report and findings of the investigating team".

In a recommendation just published, the court said that in the course of the investigation neither the employee nor his representative was afforded an opportunity to question witnesses giving evidence against him.

It said this was an omission that amounted to a breach of the established code of practice on disciplinary procedures.

"Accordingly, the investigation was tainted by procedural unfairness and the decision arrived at by the investigating body cannot stand."

In view of "the seriousness of the matter", the court believed the fairest way to proceed was to establish a new enquiry into the allegations.