CEO payout raises more questions

By Mike Barrington


The employment contract covering Jack McKerchar quitting his job as chief executive with the Kaipara District Council does not appear to justify him receiving a $240,000 severance payment.

Following an Official Information Act request from the Northern Advocate, the council has released Mr McKerchar's employment contract, saying it was considered to be personal information pertaining to an employee but was being given to the newspaper because of considerable public interest in it.

And after earlier saying no records could be found of councillors receiving legal advice before approving the deed of settlement for Mr McKerchar's departure from his job in 2011 for health reasons, the council has come up with a bill indicating a lawyer was consulted.

In August 2011 the council received an account for $2108 from Dargaville lawyers Hammonds for services and correspondence "relating to the issues surrounding the resignation of the council CEO."

Council corporate services manager Barbara Ware said the Hammonds bill was believed to be for drawing up the deed of settlement.

Any advice on how to handle Mr McKerchar's departure would probably have involved a law firm outside Dargaville, but a search through correspondence with firms likely to handle such business had drawn a blank, she said.

Mr McKerchar, 62, was CEO when the council struck rates and was also at the helm in the lead-up to a $80 million-plus debt blowout.

He resigned in early August 2011 saying his health was the main reason behind his decision. He left three months later.

His deed of settlement provided him with $200,000 for lost salary through ending his contract a year before its expiry date, $20,000 for compensation and a further $20,000 to cover the costs of his career transition.

Ratepayers questioned why he received such a large payment when he resigned for health reasons.

His five-year employment contract with the council, expiring on October 31, 2012, did not provide for a large resignation payout.

It said the CEO or council could terminate the contract with three months' written notice, and the council could pay the CEO in lieu of him working off the notice.

The council could also dismiss the CEO with three months' notice if, after using all his leave entitlements, he could not continue working because of ill health.

Employment law specialist Blair Scotland, from the Chen Palmer law firm, told the Advocate he had seen nothing in the employment contract showing Mr McKerchar was entitled to such a large payout.

- Northern Advocate

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