Return to sender: Australia Post CEO Christine Holgate fires back at Prime Minister Scott Morrison

Christine Holgate says there’s no legal reason for her to be stood down as Australia Post chief.

Australia Post chief executive Christine Holgate during Senate estimates in Canberra last week. Picture: Gary Ramage

Christine Holgate has hit back at Scott Morrison, with her lawyers declaring there are no legal grounds for her to stand down as Australia Post chief executive over the Cartier watch gift row.

Ms Holgate, through her lawyers, accused the Prime Minister of “humiliating’’ her in federal parliament when he called on her to stand aside after it emerged she had spent almost $20,000 rewarding four senior executives at Australia Post with Cartier watches.

Mr Morrison last week ordered a four-week investigation into the gift of the Cartier watches, declaring “if she doesn’t wish to do that (stand aside), she can go”.

Ms Holgate’s lawyer Bryan Belling, of Sydney firm Kingston Reid, said in a statement on Thursday: “It is now exactly seven days since Ms Holgate was the subject of a humiliating answer during Question Time. In that time Ms Holgate has not had any proper notification that she has been stood down from her role, nor has she been informed as to why she should be stood down, nor has she had any communication regarding … the investigation into Australia Post from either the board or the government.

“Legally, in my opinion there are no grounds for Ms Holgate to be stood down, and ‘optics’ is not a legally valid defence.”

Mr Belling said he was compelled to release a statement after letters to the board and Australia Post chairman Lucio Di Bartolomeo went unanswered.

But Mr Di Bartolomeo said Ms Holgate agreed to stand aside via a phone call and Australia Post had been “communicating frequently” with her, and “ensuring appropriate support has been provided”.

“The chair stands by his previously made statement on Thursday 22 October that Ms Holgate will stand aside and this was agreed to by both parties in a telephone conversation,” an Australia Post spokesman said.

A federal government spokesman said Ms Holgate’s position was a “matter for the Australia Post board”.

The spending on the watches was revealed under questions from Labor senator Kimberley Kitching during Senate estimates. After the hearing, Mr Morrison said he was “appalled and shocked” by the Cartier gifts and the departments of finance and communications would investigate.

“We are the shareholders of Australia Post on behalf of the Australian people … she (Ms Holgate) has been instructed to stand aside. If she doesn’t wish to do that, she can go,” Mr Morrison said during question time last week.

But Mr Belling said it was “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. This is the case under general employment law, as well as the specifics of Australia Post’s own employment regulations. The board has failed to do so.”

Ms Holgate continues to serve in her other government role, chair of the Australia-ASEAN Council, which former Foreign Minister Julie Bishop appointed her to in September 2015.

She is the second government appointment chief executive to call in lawyers over her employment. The ABC paid a $730,000 settlement to former managing director Michelle Guthrie after she was dismissed halfway through her five-year term in 2018.

Ms Holgate has attracted a range of backers, including former prime minister Malcolm Turnbull, who appointed her in 2017, former boss Marcus Blackmore, ABC chair Ita Buttrose and Eddie Maguire, who she serves alongside as a director of the Collingwood Football Club.

Mr Turnbull told the ABC that spending $20,000 on rewarding staff for securing a deal worth $66m a year with three of the big four banks was not a “hanging offence”. Indeed, the ABC, which is fully funded by the taxpayer, awarded six staff earning between $395,000 and $420,000 average cash bonuses of $8750 — a higher amount than the value of the watches — last financial year.

But one of the Australia Post executives who received a Cartier watch, executive general manager of business and government Gary Starr, also received a $413,438 cash bonus, taking his total salary to $1.24m in the 2019 financial year, according to the organisation’s annual report.

During the same year, Australia Post spent $83.7m on staff bonuses — less than the $92.4m it spent in the year to June 30.

Australia Post also paid $34,500 for Ms Holgate’s nine-month stay in a suite at the Grand Hyatt in Melbourne, while hair and make-up services for executives, along with lavish dinners and drinking sessions, were put on Australia Post credit cards. Ms Holgate’s office amassed almost $300,000 on its corporate credit card last year.

Mr Blackmore said Ms Holgate, who served as chief executive of his eponymous vitamins company for almost a decade, said she “might have been out of line” for buying the watches.

“But don’t crucify her, for god’s sake,” he said. “Quite honestly I think the whole thing was bloody disgusting, the way she was treated. It was four watches, for god’s sake. Women like Cartier watches. She likes watches, she wanted to give people something memorable.”

Ms Holgate, who took home $1.61m in the 12 months to June 30, was appointed to head Australia Post in June 2017 after her predecessor Ahmed Fahour resigned following a political storm over his $5.6m salary.