Australia Post CEO’s $1 million payday
Scott Morrison's decision to "humiliate" Australia Post CEO Christine Holgate in Parliament over four Cartier watches could end up costing taxpayers over $1 million.
News.com.au has confirmed that Ms Holgate's employment contract stipulates she cannot be terminated without giving six months notice or being paid six months of her salary.
The CEO's base salary is $1.5 million - suggesting a minimum payout of $750,000 for Ms Holgate to walk away - but she has regularly earned over $2 million during her three-year tenure.
And to make matters worse, any golden handshake for Ms Holgate could climb even higher, with her employment lawyer noting that the Prime Minister had "humiliated" her by demanding in Parliament that she stand down or "she should go" with no legal basis.
The statement clearly implies Ms Holgate intends to pursue damages if she is forced to leave the business as a result of the fallout over the Prime Minister's demands she stand aside as CEO while an investigation is conducted into the purchase of four Cartier watches for $20,000.
"It is now exactly seven days since Ms Holgate was the subject of a humiliating answer during Question Time," Ms Holgate's lawyer Bryan Belling wrote.
"It is incumbent on the board to formally notify Ms Holgate that she has been stood down, and this notification must stipulate the grounds for this action."
Australia Post executives now believe there is little prospect of a "happy ending" over the affair with Ms Holgate now at odds with the Prime Minister and the Australia Post board who are insisting she agreed to stand aside in a verbal conversation last week.
In the most recent comparable case, former ABC managing director Michelle Guthrie ultimately reached a settlement with the national broadcaster for $1.64 million.
Ms Gurthrie was on a fixed-term contract, which Ms Holgate is not, but her annual salary of $900,000 when she was sacked by the ABC was substantially lower than Ms Holgate's annual remuneration.
Ms Holgate's employment arrangements are confirmed in Australia Post's annual report that notes the terms of employment for the CEO and managing director are formalised in employment contracts with no fixed term.
The CEO and managing director may terminate their employment contract by providing six months' notice in writing.
"Australia Post may terminate the CEO & managing director's employment contract by providing six months' notice or provide payment in lieu of the full or part of the notice period,'' the document states.
"For the CEO & MD and senior executives, termination on notice payments are calculated based on length of service and shall be no less than an amount equal to the notice period and no more than twelve months of fixed annual remuneration."
That suggests the cap on the maximum payout that Ms Holgate can secure if she leaves is $1.5 million.
Last week, Collingwood Football Club President Eddie Maguire, who has worked with Ms Holgate on the club's board, said he was left angry and disgusted when he watched the PM's extraordinary spray in Question Time and he hoped she would "get out" and go back to the private sector.
"I just thought it was a pile on. I don't know what the background is. But as somebody sitting there watching this, I just thought, 'Wow. This was a beat up where someone's getting beaten up,'' he said.
Accusing the Prime Minister of needlessly trashing her reputation, Blackmores vitamin empire chief Marcus Blackmore has slammed the treatment of the respected business leader as "disgusting" and over the top.
"You wouldn't do this to your dog … she might have been out of line but don't crucify her, for God's sake," Mr Blackmore said.
"I saw what it did to her, she was crying for days, she was devastated. It was awful."
But the Prime Minister has defended his decision to demand Ms Holgate stand aside.
"It's a government business enterprise. The Government owns Australia Post on behalf of taxpayers, which is why we've set out our very clear standards on this,'' he said.
"That was my statement and I stand by it,'' he said.
Asked about reports Ms Holgate had been "crying for days", the Prime Minister said an investigation was under way and "that's what happens when there are issues like this to be considered and dealt with".
"And that's what's occurred. This is taxpayers' money that has been managed on behalf of a government business enterprise. There's a proper investigation and we'll wait for the recommendations to come back from that, that inquiry."
Ms Holgate's lawyer had indicated she is keen to participate in a "fair" workplace investigation but also pointedly references her "humiliation" at the hands of the Prime Minister in a manner that clearly leaves the door open to the pursuit of damages.
Australian courts have previously found that flawed workplace investigations can cause psychological injury or exacerbate pre-existing mental illnesses.
As a result, employment lawyers have always warned that companies should, as far as practicable, keep investigations confidential and have regard to any potential mental health issues suffered by employees.
While not commenting specifically on the Australia Post case, high profile employment lawyer Josh Bornstein has persistently criticised "cowboy" workplace investigations and argued some companies announce independent investigations with predetermined outcomes.
The investigations are traditionally outsourced to an "independent" lawyer so that the findings are treated as legal-in-confidence with the purpose of ensuring the investigation report can be withheld from both the subject of the investigation and the participants in the case of bullying and sexual harassment complaints..
"Outsourcing a function does not always mean that an organisation relinquishes control. And so it is with workplace investigations. Behind the scenes in many investigations, the company is exercising control over the process and engineering its desired outcome,'' Mr Bornstein wrote.
Originally published as Aus Post CEO's $1 million payday