CEO Jack McKerchar got $240k to leave job early

By Mike Barrington

Former Kaipara District Council chief executive Jack McKerchar received $240,000 in severance pay because he agreed to leave his job a year before his contract ended.

However, the confidential settlement agreement covering his departure in 2011 - released to the Northern Advocate after being kept under wraps by the council - does not say why it wanted the chief executive to leave before his contract expired, despite publicly saying it was due to ill health after 18 years in charge.

Mr McKerchar said the settlement was achieved on an amicable basis, but an expert on employment law said yesterday that a $20,000 tax-free compensation payment for the former CEO's hurt and humiliation as part of the settlement indicated there was more to Mr McKerchar leaving the job early than met the eye.

The agreement provided Mr McKerchar with $200,000 for lost salary through ending his contract a year before its expiry date, the $20,000 for compensation and a further $20,000 to cover the costs of his career transition.

New CEO Steve Ruru said when releasing the document that there had been significant public interest in the agreement.

Commissioners now running the council had also said withholding the information was hindering their ability to address some Kaipara issues.

Mr McKerchar, who had threatened to seek a court injunction to stop the deal being made public, said that he felt considerable pressure was exerted on him to agree to its release.

"I had considered the deed to be confidential and I believe the Chief Ombudsman came to a similar view," he said in a letter to the paper.

"I am particularly concerned about idle speculations that appear to surround my departure from council and the need to provide solid information. Therefore, I confirm settlement was achieved on an amicable basis and in return for the early termination of my contract with council."

Mr McKerchar was given a formal public farewell recognising his service and a reference to help him get another job.

"The parties will co-operate in a jointly prepared statement to the media recording the employee's resignation," the settlement says.

It also stops the council from making disparaging comments about the former chief executive.

Employment law specialist Blair Scotland, from the Chen Palmer law firm, said yesterday the $20,000 compensation payment was made under section 123(1)(c)(i) of the Employment Relations Act 2000 covering compensation for humiliation, loss of dignity, and injury to the feelings of the employee.

"That sort of payment will arise only when there is a personal grievance between the parties," he said.

- Northern Advocate

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