Specialist Education Services chairman Graham Lovelock has lost his job after a State Services Commission investigation into the sudden sacking of Celia Lashlie.

Education Minister Trevor Mallard said last night that SES had acted legally but unfairly in sacking Ms Lashlie as Nelson manager.

She had given a speech in Wellington on April 18 about an unnamed 5-year-old who was heading to prison and could kill on the way.

He turned out to be a composite profile of several children.

Six hours after her comments were reported in a newspaper, Ms Lashlie lost her job.

She had a good work record of 15 years in the public service, but was not given a chance to comment, said Mr Mallard.

The report says her $840-a-day contract between SES and a consultancy agency included a confidentiality clause on the use of client data "in any form."

But Mr Mallard said: "The process that followed was not one I, and many other New Zealanders who have expressed an opinion on this matter, feel was very fair."

Mr Lovelock was not directly involved in the sacking, but offered to quit because of a "loss of confidence in him."

"In my opinion the board under his leadership was not capable of presenting to the public a face of SES which showed it treated long-term people well and had the interests of young people at heart," Mr Mallard said.

Although Mr Lovelock accepted there had been some rough treatment, there was not an acknowledgment of the seriousness of the situation and the damage done to the reputation of SES.

Mr Lovelock will be replaced immediately by Doug Martin, former Fire Service Commission member and chief of staff to Jenny Shipley as Prime Minister.

His role will be short-term because the Government this year made an unrelated decision to disband SES and set up a directorate within the ministry.

Mr Martin said the board welcomed the State Services Commission report.

"I am pleased we now have agreed a framework for resolving issues surrounding Celia Lashlie."

Mr Mallard said SES would finance a $60,000 six-month contract for Ms Lashlie to work at Nelson schools until the end of the year. She had been approached by the schools to do some work after her sacking.

"The board and the SES thought it would be appropriate to fund that," said Mr Mallard.

Neither Ms Lashlie nor a public relations person acting on her behalf could be contacted last night.

Mr Mallard said her former contract with SES had been due to expire next month. She received $840 a day as a "leased executive" to SES through a consultancy agency - a role that would now be looked at.

Although there was sometimes a need for short-term contracts, Mr Mallard said, leased executives were too costly and had an ambiguous relationship with management.