The Auckland Council is paying $300,000 in confidential settlements to two whistleblowers who exposed alleged bullying by a high-ranking officer.
One of the whistleblowers, who suffered mental stress, left his job on July 27 to go on leave on full pay until January next year.
The second whistleblower was paid $175,000 in April and resigned "to pursue the next stage of his career in the private sector".
The two were among four senior managers who complained about the behaviour and management of the infrastructure and environmental services department under John Dragicevich.
In a 14-page joint statement last October to human resources director Alan Brookbanks, the managers accused Mr Dragicevich, their department boss, of creating a climate of fear, threatening behaviour, setting people up to fail and not appearing to operate under any moral code over an 11-month period.
The council hired employment lawyer Penny Swarbrick to conduct a confidential and independent investigation.
She measured the complaints under the council's harassment policy and found six cases in which Mr Dragicevich's behaviour fitted the policy's definition of bullying.
"While not deliberate conduct by John Dragicevich, it nevertheless has had a detrimental effect on the employment of others," she said in her report.
Mr Dragicevich was found to have yelled at one senior manager in front of staff, told another manager his work was dreadful, bullied a manager over being left off an invitation list and intimidated two other managers in ways that included threatening late-night telephone calls to one of them.
Ms Swarbrick said that while Mr Dragicevich's behaviour fell within the council definition of bullying in some instances, she did not consider it was deliberate but more a case of his "ingrained management style".
She dismissed other complaints as being too general in nature, or because they related to part of Mr Dragicevich's management style or to operational matters outside his control.
She upheld a complaint about a climate of fear in the infrastructure and environmental services department, saying it appeared to be significant.
The council's harassment policy says bullying is "unlawful under the Human Rights Act and will not betolerated".
A council document obtained by the Weekend Herald says it took "serious disciplinary action" against Mr Dragicevich, who kept his job.
"The terms of that action are confidential to John and Auckland Council and we trust you will respect that. However, we can assure you that John understands and accepts his part in this situation," said the document, which was given to the complainants.
In her report, Ms Swarbrick said the complainants had told her they did not think their jobs would be safe if Mr Dragicevich continued working for the council, and they did not think his improved behaviour would be sustainable.
After the report was issued, two of the whistleblowers reached settlements with the council and resigned. They had a combined 30 years' local government experience in Auckland.
The third and fourth whistleblowers still work for the council. One is on a short-term contract.
Mr Dragicevich did not return calls yesterday.
Council chief executive Doug McKay said the matter was an employment issue that was subject to an investigation and had been resolved.
Mr McKay declined to comment on the payments to the two whistleblowers who resigned, and on other issues raised by the Weekend Herald.
He said Mr Dragicevich had his support, and staff could have confidence in the leadership of the council if they reported bullying, harassment or unfair treatment.
A spokeswoman for Mayor Len Brown said the mayoral office was unaware of the matter and would not comment on employment matters.
Ms Swarbrick said in her report that Mr Dragicevich was an extremely hard-working senior manager with a reputation within the council for being very influential at the highest levels.
He "forms quick views of others (often adverse), and has a 'long memory' and holds things against those he perceives to have crossed him in some way".
Ms Swarbrick said Mr Dragicevich accepted he was angry and regretted the incident in which he yelled at a manager.
Nor had he challenged any of her comments in a draft report in relation to four other cases of bullying.
During nearly one-and-a-half days of interviews with Ms Swarbrick, Mr Dragicevich described his management style as "brusque".
He also spoke of the issues he and other senior managers faced in bringing together the eight former councils to create the Auckland Council, and of heading a large department with very little administrative support, making it necessary to work extremely long hours.
"He felt a number of comments in the complaints were symptomatic of the tension created by these factors," Ms Swarbrick said in her report.
Mr Dragicevich is the former Waitakere City Council director of city services. He worked in local government out west for 35 years.
In a 2003 PSA Journal article on dealing with bullying, Mr Dragicevich described it as "an insidious cancer" that pervaded schools, workplaces and families.