Man asked to return $428,020 redundancy pay

Press, 20 December 1989, Page 6

Man asked to return $428,020 redundancy pay

PA Wellington The Government has asked a local government quango chief executive who was paid $428,020 in redundancy money to give the money back. The request follows a Crown Law Office opinion that the redundancy payment, made by the Joint Council for Local Authority Services, was illegal. The Ministry of Internal Affairs local government division group manager, Mr Dave Smith, said he had asked the joint council chairman, Mr Gordon Mason, to ask the chief executive, Mr David Bassett, to return the money.

The joint council made the payout earlier this month as part of the winding-up of the council. The council will disband on December 31.

If Mr Bassett agreed to the request, a lower redundancy package in the region of $250,000 was expected to be settled. If he refused to return the money, Internal Affairs may take legal action to recover it.

The payout, one of the largest in a series of generous local body redundancy deals, has already

been challenged by the Electricity Supply Association. The association, which is a member of the council, says it was not consulted about the redundancy deal.

The association is seeking an injunction to stop the payment and played a role in forcing a full meeting of the council yesterday.

Mr Smith said the Crown Law Office opinion focused on Mr Bassett’s employment contract, which stipulated a redundancy payment of between two and five years salary. Crown Law said the employment contract breached Sections 3 and 4 of the Public Bodies Contract Act. The breach did not relate to the amount of redundancy pay set out in the contract, but was more of a technical breach in the drawing up of the contract. "The Crown Law opinion essentially said that the contract wasn’t valid and therefore the decision on the payment of the redundancy falls away,” Mr Smith said. Mr Bassett declined to comment. He said the matter was sub judice.