The head of a Government-funded organisation which teaches workplaces how to promote diversity and prevent discrimination has been accused of bullying and cultural insensitivity.

Diversity Works chief executive Rachel Hopkins had a complaint laid against her by staff member Fia Collins last year.

It was dealt with internally and Collins left the Auckland-based organisation in December with a payout of around $100,000 - Hopkins remains in the top role.

In an awkward situation for an organisation tasked with promoting workplace diversity, it is understood that Collins, who is Samoan, alleged bullying, harassment and cultural insensitivity by the chief executive.

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Hopkins started in the chief executive position in April. The complaint against her related to an incident which occurred in her first months in the job. She refused to comment, directing questions to chairman Michael Barnett.

Barnett confirmed that a complaint was made against Hopkins and that it was dealt with internally. He also confirmed that a settlement was made with an unnamed employee, but could not say the amount that was paid.

Barnett said he could not comment further, except to say that Collins had been a valued member of staff. It is not known what was said or done to Collins to prompt the complaint. The settlement appears to be bound by a confidentiality agreement.

Collins, who is the wife of Auckland Councillor Efeso Collins, said she could not comment. She joined Diversity Works in 2017 and was a diversity and inclusion manager, which involved running workshops for businesses. She has now set up her own consultancy.

It is understood that her payout was around $100,000 - nearly a tenth of the organisation's annual budget.

It was signed off by Diversity Works' board, which is made up of private and public sector leaders - including the chief executives of the Ministry for Social Development and the Ministry of Defence and the managing director of Coca Cola Amatil.

While Diversity Works gets some Government funding, it is not part of the state sector and is therefore not subject to strict guidelines on payouts.

Previously known as the Equal Employment Opportunities Trust, it is a national body which advises businesses on diversity and inclusion - including how to prevent bullying and discrimination.

"In a safe organisation, every employee is aware that bullying and discrimination will not be tolerated," its website says.

It received around $400,000 in public funding last year, which matches the amount it fundraised through donations.

Diversity Works mentioned Collins departure on its website in December but did not state her reasons for leaving. It said the team was "sad to farewell" her.

Hopkins is an experienced lawyer and has held senior leadership roles at private, public and charitable organisations.