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Council wins right to terminate CEO

May 9, 2019

The Supreme Court of NSW has recently confirmed the right of Councils to use the notice provisions of the Standard Contract of Employment General Managers of Local Councils in NSW to terminate a CEO, and not be bound to otherwise undertake prior action under its disputes resolution clause.

 

 

Background

The applicant, Mark Stapleton, had been the CEO of the City of Parramatta and successfully sought an interim injunction to restrain Council from terminating his employment following allegations, and an investigation, concerning the CV submitted for his appointment as CEO.

 

The Court’s decision

On the issue of whether Council was acting in a manner consistent with Mr Stapleton’s contract of employment, which was in the form of the Standard Contract of Employment General Managers of Local Councils in New South Wales, the Supreme Court rejected submissions that Council was restrained from making use of Clause 10.3.5. This clause allows Councils to terminate the contract before the termination date by giving 38 weeks' written notice to the employee, or alternatively, by termination payment.

 

Mr Stapleton submitted the Dispute Resolution clause set out in clause 17 of his contract should be engaged prior to any action taken by Council to terminate his employment.  

 

This submission was rejected by the Court which confirmed the ability of Council to lawfully make use of the specific provisions of Clause 10.3.5 without the need to engage first in dispute resolution pursuant to Clause 17 as a contractual prerequisite. Accordingly, the Court found Council had the right to terminate its Contract with Mr Stapleton without cause.

 

Comments on this matter

The approach of the Supreme Court on this matter confirms the importance for Councils to make ongoing use of the standard contracts of employment provided by OLG.

 

Stapleton v City of Parramatta Council [2019] NSWSC 123

Read the full case here

 

 

Graham Evans is the Managing Partner of O'Connell Workplace Relations, a Sydney-based provider of independent investigations into workplace issues. He has over 20 years' experience in working with NSW State and Local Government to deal with complex issues within their workplaces.

 

EMAIL: graham@oconnellgroup.com.au 

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