‘Staggering’ cost of public sector CEO departure

Former Toitū te Waiora chief executive Donovan Clarke spent just over a year on the job before an employment dispute saw him spend six months on paid leave. Photo / Michael Cunningham

Taxpayers have been left with a bill approaching half a million dollars after an employment dispute at a small public sector agency saw its new chief executive last barely a year before spending six months on paid leave and then resigning with a financial settlement.

National Party workforce planning spokesperson Penny Simmonds said: “It is staggering that this kind of money is being spent settling a single workplace dispute when New Zealand’s vocational sector is under such immense pressure.”

Donovan Clarke was appointed foundation chief executive of health and social services education council Toitū te Waiora (TTW) in October 2021, but was placed on paid “discretionary leave” in December 2022 after the Herald began making inquiries about his corporate credit card use.

That investigation showed Clarke’s publicly-funded card had been used to pay for alcohol and lobster in Sydney, numerous post-midnight taxi trips and that the $72,862 in total spent by Clarke over 11 months was more than twice as much the five other Workforce Development Council chief executives combined.

Toitū te Waiora, jointly chaired by David Waters and Matthew Tukaki, is one of six Workforce Development Councils set up by the Government this term to bolster vocational training and education.

Education Minister Jan Tinetti, asked about the employment dispute, said: “Workforce Development Councils are independent statutory entities and manage their own operations.

“As with all public entities, I expect Workforce Development Councils to use public money wisely and maintain appropriate standards as employers.”

In late May TTW announced Clarke had resigned and a statement was issued with him saying: “As my waka turns, I want to acknowledge and mihi to all those who supported me and my leadership”.

The Herald understands the intervening six months were wracked by a highly-litigious employment dispute centred at least in part on credit card expenses.

Figures obtained under the Official Information Act (OIA) reveal the employment dispute resulted in Toitū te Waiora incurring $194,647 in “professional services costs” and $128,266 in “discretionary leave” costs.

TTW said $117,950 had been paid out to settle employment disputes with four staff since October 2021, including Clarke, but declined to specify how much of this sum had been paid to its former chief executive.

TTW is a small and very new organisation, having existed for less than two years. With only 31 staff listed in its annual report, the figures suggest around 10 per cent of staff have experienced employment grievances requiring financial settlements to be paid out.

Clarke did not directly address questions about the dispute and is understood to be bound by the terms of the settlement, but told the Herald: “I enjoyed my time at Toitū Te Waiora, however for me and my whānau it was time to leave. Toitū Te Waiora incurred these costs, not me, they made all the decisions. I would like to thank all the people who have supported me through this.”

Acting TTW chief executive Sean McKinley told the Herald that questions about the saga would be treated as a request under the OIA which would deliver a response within 20 working days.

In the three minutes between McKinley sending this reply, and this delay being challenged by the Herald, he enabled an out-of-office alert that said he was on annual leave until September.

Two further TTW spokespeople said McKinley was now on annual leave and questions about the employment dispute would not be answered this month. No response has yet been received by the Herald.

National Party MP Penny Simmonds said the cost of the Donovan Clarke saga was "staggering". Photo / Bevan Conley

Simmonds said in her view the saga was concerning and reflected wider problems with the government’s vocational training programme.

“Donovan Clarke’s brief tenure has clearly been a costly one for taxpayers. First, we learned of his excessive credit card spending, and now we’ve learned it’s taken nearly half a million dollars to get rid of him.”

Simmonds said she believed the vocational training sector was roiled by employment disputes, pointing to the departure of Stephen Town as chief executive of mega polytech Te Pūkenga who received a settlement of $195,000 following five weeks of special leave and mediation.

“The polytechnic sector is now in total disarray, and there is no accountability to the students and industries these organisations are supposed to be supporting,” she said.

“Everything Labour’s vocational education reforms have touched has been dysfunctional and wasteful. As a result, staff are being made redundant across the tertiary education sector, enrolments are dropping, and classes are being cancelled.”

Tinetti said the Tertiary Education Commission - the oversight body for WDCs - was “closely monitoring the performance of Toitū te Waiora, and have identified, along with NZQA, that work is required by Toitū te Waiora to improve its performance of some of its functions.”

She said: “Workforce Development Councils play a crucial role in building links between industry and education providers to help keep curriculums and courses aligned with the developments of industry and make sure we’re delivering the skilled workforce industry needs.”

Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism - including twice being named Reporter of the Year - and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.