Mr Caffrey is understood to be consulting lawyers about the possibility of taking a case in Spain. However, this may not be possible because his contract of employment is with the Dublin branch of the institute, not the central body in Madrid.
Mr Sierra had a contract of employment with the Instituto Cervantes in Madrid and it was on this basis that he took his case.
The Spanish Cultural Institute in Dublin was founded by Mr Sierra in 1971, with the help of a £200 grant from the Spanish government. In the early 1990s, the Spanish government reorganised almost 40 cultural institutes in foreign countries into a centralised agency, Instituto Cervantes. One of its rules was that directors should not stay more than five years in any one country.
Mr Sierra had been living in Ireland for more than 25 years and did not want a transfer. He agreed to step down as director and become head of cultural affairs.
He was replaced as director by Mr Javier Odriozola, but relations between the two men were strained. Following a number of incidents Mr Sierra was dismissed in November 1994.
He won a case against Institute, Cervantes at an employment tribunal in Madrid in 1995, but the institute appealed the case. The appeal court upheld the earlier ruling.
The Instituto Cervantes can appeal the latest decision to the Spanish Supreme Court. No comment was available on the case from the institute yesterday. Mr Odriozola said he had not yet been notified of the finding.
The institute employs eight Spanish and one Irish person and promotes Spanish cultural activities in Ireland.
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