City of Newcastle chief executive officer Jeremy Bath has "offered to extend an apology" on behalf of the council to staff who felt "disrespected" by their treatment during a recent restructure.
Mr Bath and the United Services Union, which has called a stop-work meeting for tomorrow of its 700 members at the council, issued a joint statement on Wednesday night saying they had made progress in a dispute revolving around emails between senior council managers and an external recruitment agency.
In an interview with the Newcastle Herald, lord mayor Nuatali Nelmes said the emails were "unacceptable" and she had told Mr Bath to "fix" it.
The chief executive met with union representatives on Monday.
Their joint statement said the talks revealed "considerable differences" between the parties but "also close to several solutions".
"The CEO has acknowledged the need for CN to improve this situation and also acknowledged that CN did not meet the expectations of the affected employees in relation to people management on this occasion," the statement says.
"CN is now working collaboratively with the USU to strengthen existing processes that support workplace change.
"Furthermore, the CEO offered to extend an apology on behalf of the organisation to the employees impacted who felt disrespected by the manner their redeployment was communicated to them."
The USU said last week that the council had "walked away" from its commitments under a 2018 enterprise bargaining agreement when dealing with IT staff deemed surplus to requirements in a departmental review.
But USU organiser Luke Hutchinson said on Wednesday the union was "pleased" the council had committed to complying with the EBA.
"We will report back to our irate membership tomorrow with the intent of providing these positive developments and to avert any further industrial unrest," he said.
The Newcastle Herald has seen emails in which an external consultant warns senior staff that adopting a line of argument in not offering a staff member a new role will "be an open door to commence challenging that we have not run a fair process in determining who is appropriate to retain roles and that we are simply manipulating to retain who we wanted from the start".
"If we were to remain firm that he is not offered this position (when prompted), the best approach we believe would [be] to state that over the course of the consultation and EOI process, it became apparent that the initial assessment of positions between the roles was generous and it could be viewed that not as comparable hence a direct appointment not appropriate," the consultant writes.
"We did not inform [redacted] of this as he has been very clear and adamant that this was a viable option for him.
"If he had been open and interested, we would have encouraged him to express interest and we would have assessed accordingly.
"This still has some difficulties and very likely to be challenged, but the best option to work with if that is the agreed decision to not offer."
The Newcastle Herald understands the employee's case is now before the Industrial Relations Commission.
Another email between managers and the recruiter suggests early finishing dates for "individuals that we are concerned about in terms of toxicity and risk to system".
A USU flyer distributed to members last week said the emails showed senior managers had been "deliberately conspiring" not to offer positions to some staff.
Cr Nelmes, whose Labor team signed a pledge with the USU to protect jobs before the 2017 council elections, said the emails showed senior council managers had made "mistakes" and staff "were not treated well".
"The emails that I understand you're talking about ... are unacceptable, and it's my understanding the CEO feels the same way," she said.
"We're pretty much on a unity ticket that that is an unacceptable way to deal with redeployment and staff redundancies."
The email trail seen by the Newcastle Herald does not include Mr Bath.
Mr Hutchinson suggested last week that staff had lost confidence in the CEO, but Cr Nelmes said she supported Mr Bath, who had acted promptly to address the redeployment issue.
"As soon as this was brought to my attention I went to the CEO and I said, 'This needs to be fixed. You need to go and sit down with the unions and make sure your senior management team that are implementing these changes ... are following the process and doing their job,'" she said.
"He said, 'I absolutely agree,' and has since sat down with the unions and his senior management teams ... and acknowledged that there were mistakes made by the people running those processes in council and that's not good enough and that process needs to be rectified."
The industrial unrest coincides with the council's move to a new office building in Stewart Avenue, Newcastle West, which has raised staff and union concerns about parking and hot-desking.
Cr Nelmes said a "level of anxiety" was normal with a significant change in employees' workplace but most staff supported the move.
"What I would say is there are 450 staff moving into the new building," she said.
"I know particularly of a handful that just don't want to move ... but what I would say is when I talk to staff who have wanted change and are excited about a new workplace, it is the majority of staff."