The boss in trouble for "sexist" comments is now under fire for boasting he asked the Prime Minister about a sexual relationship with a woman unionist.
Council of Trade Unions president Helen Kelly confirmed she had been publicly confronted by Employers and Manufacturers Association head Alasdair Thompson.
An influential business leader, who witnessed the confrontation at a high-powered dinner in Washington DC, said last night that she would make a formal complaint to the board of the EMA.
Labour MP Maryan Street was also present and within earshot but has refused to comment. The drama will add to Thompson's woes. He did not return requests for an interview yesterday and tomorrow faces a board meeting over his future.
Thompson has apologised repeatedly, but continues to face calls to resign after claiming women took more sick leave because they took time off to have periods and for childcare.
An online poll at nzherald.co.nz on the issue drew a huge 23,500 votes from readers. They were divided: 53 per cent said Thompson should go while 47 per cent said he should not.
The Herald on Sunday has learned Thompson was among a large group of influential New Zealanders at a high-level trade meeting at the US-NZ Partnership Forum in the United States from October 6 to 8, 2009.
At a dinner at McCormick & Schmick's restaurant in Washington, Thompson approached Kelly, Street and the business leader.
Thompson is alleged to have made lewd comments at the social event about the relationship Kelly had with Prime Minister John Key, who has been married to wife Bronagh since both were teenagers.
Late last night, the Prime Minister's office dismissed Thompson's allegations as "totally ridiculous".
The source said the comments were made without any basis other than Helen Kelly and John Key's "good working relationship".
"He asked her what the relationship was between her and John Key. There was sexual innuendo. Then he said he asked John Key, the last time he saw him. He said he asked if he [Key] fancied Helen."
The source said Kelly was visibly upset by the comments. She said to Thompson: "That's disgusting."
She then walked away, the source said. As she left, Thompson shouted: "It's a joke. You're beautiful, you know." The events were recounted to Kelly, who confirmed the account. She said she would not comment further on the incident.
Street responded by text stating she was aware of the issue but would not comment.
EMA president Graham Mountfort said Thompson would be asked to explain himself to the board and was no longer allowed to speak with the media.
"He won't be an advocate for us in the future."