Jack Dempsey cleared over council CEO’s $20k pay rise

Qld’s council watchdog has cleared Jack Dempsey of any wrongdoing in unilaterally granting his CEO Steve Johnstone a pay rise that put him over $300k a year, but it did have something to say about the transparency of what went down.

The local government watchdog has overturned a complaint brought against Mayor Jack Dempsey by mayoral candidate Helen Blackburn for approving a $20,000 salary increase for CEO Steve Johnston.

The Queensland local government watchdog has overturned a complaint of misconduct made against Bundaberg Mayor Jack Dempsey for approving a $20,000 salary increase for CEO Steve Johnston without the oversight of council.

The Councillor Conduct Tribunal, an independent body responsible for dealing with complaints of misconduct by councillors, handed down its decision on Tuesday, October 24, regarding allegations Mr Dempsey had breached the public trust by approving a $20,000 salary increase for Mr Johnston in May 2018.

The allegations made by mayoral candidate Helen Blackburn and another anonymous complainant contended that Mr Dempsey did not have the authority to approve the salary increase without council’s approval, as this power had not been expressly stated in the council resolution appointing Mr Johnston to the role in 2016.

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As reported by the CCT decision, under the terms of Mr Johnston’s contract appointing him to the position of CEO in 2017 his salary would be reviewed annually with an increase of 1 per cent per annum or indexed to the Brisbane CPI, but an additional clause gave him the power to request a salary increase with council bound not to unreasonably refuse his request.

On May 2, 2018, one year into his contract, Mr Johnston sent a memo to Mr Dempsey requesting his then-$285,000 salary to be increased by $20,000 to $305,000.

In a memo to Mayor Jack Dempsey requesting the $20,000 increase, Steve Johnston said the substantial cultural, organisational, staffing and IT related changes he had made in his first year as CEO justified the increase.

In the memo included in the CCT decision, Mr Johnston acknowledged the increase was above the 1 per cent or CPI increase detailed in his contract, but contended that the “substantial cultural, organisational, staffing and IT related changes” he had made in his first year as CEO justified it.

“I am confident that these changes now have resulted in an organisational focus more aligned with your vision for the Council and the community over the next few years,” Mr Johnston said in the memo, which was signed by Mr Dempsey in approval of the salary increase.

When Mr Johnston was appointed to the position of CEO in a December 2016 council meeting, the council resolved that he would be appointed on a “negotiated contract basis”, but did not state who had the authority to negotiate the contract.

In their complaint, Ms Blackburn and the anonymous complainant said the council’s decision “did not expressly authorise Mayor Dempsey to make decisions in relation to the contract on behalf of the council”, and noted that a resolution made appointing the previous CEO in 2012 explicitly stated that the Mayor had the authority to negotiate the contract.

For this reason, the complaint alleged that Mr Dempsey had breached the public trust by approving the increase, saying that Mr Dempsey should have followed a “transparent process” with the oversight of all councillors through which the increase was approved.

The tribunal found that Mr Dempsey’s approval was sufficiently transparent and effective due to all negotiations being made in writing, and thus he had not engaged in misconduct by engaging all councillors in the contract negotiations.

While conceding that this would have been the “gold standard” procedure for transparent governance, the CCT found that Mr Dempsey’s approval “was sufficiently transparent and effective” due to all negotiations being made in writing, and thus found that Mr Dempsey had not engaged in misconduct.

“The Tribunal repeats that while there could have been a more transparent and effective process surrounding the disclosure of the total remuneration of the CEO, what was done by the Respondent was a sufficiently transparent and effective process,” the decision reads.

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The CCT said the lack of an express authorisation for Mr Dempsey to negotiate Mr Johnston’s contract in December 2016 council meeting was “an oversight”, and did not constitute grounds for misconduct in their view.

In response to questions put to Mr Dempsey on Tuesday about the ruling, and about whether Mr Johnston’s contract negotiations could have been conducted with greater transparency, Mr Dempsey noted the CCT’s findings that the complainants took “a very strict interpretation” of council’s resolutions appointing Mr Johnston as CEO, and that the resolution was “sufficiently broad” to allow the Mayor to negotiate the contract.