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Council's decision to axe CEO "unreasonable"

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The former chief executive of a local government body has won his bid for worker’s compensation after being removed and locked out of his office a few days before Christmas 2012.

In a Workers Compensation Tribunal decision published this week, the District Council of Mount Remarkable in the Flinders Ranges was found to have acted in an unreasonable manner towards its CEO, Sean Cheriton.

Cheriton’s claim for compensation related to a depressive illness he said arose from from the decision to end his employment on 21 December 2012.

The council’s confidential decision to not renew Cheriton’s contract had been leaked to local media, causing him public humiliation, he said.

The manner of his removal from his office, several months before an agreed exit date, added to the trauma he told the court.

“He was required to return his keys, log-ins, codes and all council property,” the court documents show.

“Access to his former office and private council premises was thereafter effectively prevented.”

The court heard Cheriton’s council-supplied car was taken back and his superannuation contributions and any associated insurance cover ended on 21 December 2012.

Up until that date, Cheriton had been told he could remain in his job until his contract expired in April 2013, giving the council time to find a replacement.

The Mount Remarkable saga began with a close-call decision by the District Council’s seven councillors on 9 October 2012.

Cheriton had started at the council in 2004 on a four-year contract, which was renewed in 2008 for a five-year term expiring 30 April 2013.

With less than a year remaining on that contract, Cheriton asked the council for a renewal of his contract.

On 9 October in confidential session, the council voted 4-3 not to renew the deal.

The very next day Cheriton received a call from a local journalist at the Flinders News, which published an article in its next edition.

The council and Cheriton than proceeded to negotiate an exit deal that included a payment of $30,000 and a termination date of April 2013.

Council then took another step – on 19 November 2012 it resolved to conclude the CEO’s position on 21 December 2013, the day he was locked out.

In Cheriton’s compensation claim, he says the events of October, November and December “caused him to experience adverse psychological symptoms that worsened over December and subsequently to the point where he was hospitalised for two weeks in mid-2013”.

“His illness has been diagnosed as a major depressive disorder, as an adjustment disorder with depressed mood, or as a situational crisis,” the court was told.

The Local Government Association’s Workers Compensation Scheme rejected his claim.

After hearing from both parties to the dispute, along with medical evidence, the Tribunal’s Deputy President Lieschke found in Cheriton’s favour, taking a swipe at the District Council’s processes and procedures.

“I accept his evidence as truthful and accurate,” Judge Lieschke said.

“… it is my conclusion that the applicant suffered a serious depressive illness, in the nature of either a Major Depressive Disorder/Illness or an Adjustment Disorder with Depressed Mood.

“The applicant’s explanation of his resultant fears for his reputation and future employment prospects are also readily understandable.”

The council’s reactions to the concerns raised by its CEO showed an absence of process, the judge said.

“The mayor’s and perhaps some other councillors’ feelings of being a little threatened by the complaint was a good reason to talk to him about it, but not a valid reason to simply remove him.

“The submission also overlooks an absence of any process being extended to the applicant to ascertain or investigate the basis of his complaints, or to raise any concern with him prior to the early termination decision.

“If the applicant’s foreshadowed complaint, or any other process he was thought to be hiding behind, was of serious concern the council could have communicated with its longstanding CEO regarding its concerns and heard what he had to say about them.

“More so as there were no performance or other specific complaints raised with the mayor or council after the 9 October decision.

“Nor was the council’s decision of 19 November to lift the confidentiality it had attached to the 9 October decision dependent on it making the further decision to remove the applicant by Christmas.

“In my opinion the reasons for early termination … are also unreasonable as lacking any valid basis in this case.

“I am firmly of the view that the decision to conclude the applicant’s employment on 21 December 2012 was an unreasonable breach of the employment contract, and was unreasonable in all the other prevailing circumstances.”

Having won his battle for compensation, Cheriton’s next hurdle is the question of how much and who pays what in the costs to date.

The tribunal has called all parties to conference Wednesday (today) to deal with those matters.

Cherniton said he did not wish to comment until after those matters had been resolved.

The Local Government Association’s legal counsel said the parties were meeting today, and he had not received any instructions to appeal Lieschke’s decision.

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