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McKerchar payout details revealed

Last updated 13:51 23/01/2013

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Dargaville & Districts

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Former Kaipara District Council chief executive officer Jack McKerchar received $240,000, a positive reference from his employer and a routine public farewell when he resigned in August 2011.

Details of his payout were revealed in a Deed Of Settlement released by the council this week under the Local Government Official Information and Meetings Act 1987.

But the settlement does not reveal the reasons why Mr McKerchar resigned just over a year earlier than his contract was due to expire in October 2012. His departure at the time was widely reported in media as ‘‘due to ill health’’.

Mr McKerchar took up the position of CEO in 1993 and the council has since clocked up a debt of  about $80 million.

Current CEO Steve Ruru says in a letter accompanying the deed’s release that there has been significant and continuing public interest in this issue.

He says commissioners, who were brought in to run the council, had advised him that the non-release of the deed was hindering their ability to address some of the issues facing the district.

‘‘Given that and after seeking legal advice, I have decided to release the deed,’’ he says in the letter. ‘‘However I will not be making any public comment on this issue.’’

In signing the deed, both parties agreed to keep confidential the negotiations leading to Mr McKerchar’s resignation and the terms of settlement for the deed.

Neither party was able to ‘‘unilaterally publicise’’ Mr McKerchar’s resignation, and on the date of his acceptance, ‘‘the parties will co-operate in a jointly prepared statement to the media recording the employee’s resignation,’’ the settlement says.

Mr McKerchar had threatened an injunction to stop the release of details around his severance package being made public.

In a letter accompanying the deed’s release, Mr McKerchar says that he had considered the deed to be confidential and that it should not be disclosed to any third party and he believed the Chief Ombudsman came to a similar view.

But due to considerable pressure being exerted on him to agree to its release, he asked that a copy of his letter also be included.

Mr McKerchar says he is particularly concerned about ‘‘idle speculations’’ surrounding his departure.

‘‘Therefore I confirm that settlement was achieved on an amicable basis and in return for the early termination of my contract with council,’’ he says in the letter.

Mr McKerchar received $200,000 for lost salary, which would otherwise have been payable to him up to October 2012, a tax-free $20,000 compensation payment pursuant to section 123(1)(c)(i) of the Employment Relations Act and a tax-free payment of $20,000 ‘‘to meet the employer’s expenses and costs of outplacement assistance and managing his career transition’’.

He also received all annual leave entitlements up to the date of his departure.

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