A Newcastle council employee sacked over his handling of the city's business levy scheme says he feels vindicated after a judge found one of his colleagues was dismissed unfairly.
Greg Fenwick went through an award-based unfair dismissal process last year after he was sacked by City of Newcastle chief executive officer Jeremy Bath in October 2018.
The former economic development facilitator received a confidential payout after the council agreed to settle the day before the matter was due to go to the Fair Work Commission on April 11 last year.
The Newcastle Herald reported on Tuesday that the council's former corporate and community planning manager, Jill Gaynor, won an unfair dismissal case in the District Court on Friday after she was "summarily dismissed" by Mr Bath a week before Mr Fenwick.
Ms Gaynor, Mr Fenwick and city revitalisation coordinator Tim Askew, who resigned around the same time Ms Gaynor was dismissed, were the main conduits between the council and Newcastle Now, one of five independent "business improvement associations" (BIAs) in the city then funded by a special council rate on property owners.
Mr Bath suspended Newcastle Now's funding in July 2018 and launched an external investigation into whether it had been operating without submitting annual business plans, in breach of its 2011 funding agreement.
The Centium Group investigation led to Ms Gaynor and Mr Fenwick being fired.
But acting District Court judge James Curtis found Mr Bath had been "plainly wrong" in sacking Ms Gaynor.
Mr Fenwick welcomed the judge's comments.
"I have always hoped Jill would persevere with her private action and was really happy for the result, which vindicates the position that we both took," Mr Fenwick said on Tuesday.
He said his legal bill was more than $40,000.
Judge Curtis said Newcastle Now had been submitting business plans and spending acquittals which satisfied its agreement with the council.
"It is wrong of Mr Bath to suggest otherwise," he said.
Judge Curtis has not yet made a ruling on Ms Gaynor's payout nor the parties' legal costs.
He said Ms Gaynor was entitled to the salary she would have been paid in the final 11 months of her council contract.
The council restructured the BIA scheme last year after a review by consultants AECOM, installing lord mayor Nuatali Nelmes as the chair of a panel assessing funding requests and banning Newcastle Now and Hamilton Chamber of Commerce from applying for money.
Former Hamilton chamber president Nathan Errington, whose organisation was accused by Mr Bath at the time of "significant breaches" of its funding deed, called on Local Government Minister Shelley Hancock to set up an independent investigation into the affair.
"Reputations have been tarnished, and we need to correct this," he said.
"This recent decision only supports our concerns.
"BIAs are now under the direct control of council, which goes against the principals of a true independent business improvement model."
Cr Nelmes said on Tuesday that the day-to-day management of council staff was "clearly defined under the Local Government Act as a matter for directors and the CEO".
"The BIAs' obligations under the funding deed are distinct to that of a former council employee's industrial matter," she said.
"The Centium investigation conducted by a forensic accountant concluded that Newcastle Now breached its deed on four separate occasions.
"To date these breaches have not been fully addressed by Newcastle Now. Unsurprisingly, Acting District Court Judge Curtis does not address each of these breaches in his decision."
Independent councillor John Church said the court judgement showed Ms Gaynor and the BIA boards had done nothing wrong.
"I call on the lord mayor and CEO to issue a public apology to Ms Gaynor, her colleague Greg Fenwick and the BIA volunteers," he said.
Independent Kath Elliott wished Ms Gaynor well and said it was "troubling that we do not know the costs of defending this matter".
The Newcastle Herald understands City of Newcastle is likely to appeal against the District Court ruling.
READ CR NELMES', CR CHURCH'S AND CR ELLIOTT'S FULL STATEMENTS BELOW
The day-to-day management of City of Newcastle's 1300 staff is clearly defined under the Local Government Act as a matter for directors and the CEO. As per normal process, no councillors have been briefed on what is a staff matter.
On 28 May 2018 and following submissions from the public, council endorsed a new model for the expenditure of special business rate levies within the Newcastle local government area, noting that all funds must be spent in accordance with the purpose provided in section 495 of the Local Government Act, and stated in the city's annual budget.
Council also resolved not to enter into a new service arrangement with Newcastle Now based on four breaches of its funding and service deed of agreement as determined by an independent investigation by the Centium Group.
All BIAs were invited to a special meeting with councillors a week prior to discuss the new model, however, none accepted.
The BIAs' obligations under the funding deed are distinct to that of a former council employee's industrial matter.
The Centium investigation conducted by a forensic accountant concluded that Newcastle Now breached its deed on four separate occasions.
To date these breaches have not been fully addressed by Newcastle Now.
Unsurprisingly Acting District Court Judge Curtis does not address each of these breaches in his decision.
In just 12 months of operation under the new council approved model, more than $1.5 million in direct funding has been invested into promotion and activation in the business precincts of Newcastle, Wallsend, Hamilton and Mayfield.
Activations include the successful Makers X Traders Treasure Map, street basketball competitions at Wheeler Place, street art throughout the CBD and Hamilton and recent live music activations.
A further $800,000 in special business rate funding will shortly be announced to local groups to further support local businesses.
I was deeply distressed when I read the report on Jill Gaynor's unfair dismissal case in the Newcastle Herald.
No staff member deserves to be treated that poorly, and the comments from the judge refute the many disparaging claims made at the time by both the CEO and the lord mayor against council officers and members of the Business Improvement Associations.
I call on the lord mayor and CEO to issue a public apology to Ms Gaynor, her colleague Greg Fenwick and the BIA volunteers.
It is clear that the BIA boards were reporting all funding activities and projects on a regular basis and according to agreed protocols.
The attack on BIAs was clearly unwarranted and I remain concerned that due process and procedural fairness were not followed.
I am also dismayed that, despite being made aware of the issue, the Minister for Local Government and the Office of Local Government chose to do nothing.
Someone needs to take responsibility for this appalling treatment of Jill Gaynor and the hard-working volunteers of the former BIAs.
Independent councillors are grateful that Jill Gaynor was able to run this case as it has shone a light on some very troubling practices.
We need to stand up for the senior management and the staff. The judgement was clear that Jill was treated poorly.
There appears to have been a lack of due process and a lack of natural justice. These people were accused and not given the chance to defend themselves.
A CEO ... can't go around diminishing the reputations of Novocastrians and ratepayers; they are meant to build the city up, not knock it down.
It is also troubling that we do not know the costs of defending this matter in the courts, and there are better ways to spend ratepayers' money than in litigation.
I hope that Jill can move forward knowing that her name has been cleared. I'm very sorry that this has occurred and I wish her the very best.
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