Government may ban schools' golden handshakes

State Services Minister Trevor Mallard is considering stopping tertiary institutions from being able to give golden handshakes.

Mr Mallard last month said he regretted that former Lincoln University vice-chancellor Frank Wood had been given an "ex-gratia payment" when he retired on medical grounds last year, days after acknowledging a relationship with a student.

Dr Wood's final payout of $340,000 to $349,000 was noted in the State Services Commission's annual report, prompting National education spokesman Bill English to question the golden handshake.

Mr Mallard said at the time that the figure included Dr Wood's salary from January to October last year, contractual entitlements, and "an ex-gratia payment" made at the discretion of the university council.

"I understand that they decided to do that rather than pay extended sick leave to someone who had that entitlement."

Mr Mallard said the university had attempted to bring forward the resignation of Dr Wood, who was suffering a "life-threatening illness" at the time.

"Unfortunately, in this case, there was no requirement for concurrence from the [State Services] Commission or from any minister. I regret the payment was made."

Mr Mallard told Parliament that councils of tertiary institutions were required under the State Sector Act to obtain the agreement of the State Services Commissioner to proposed terms and conditions of employment for chief executives. But once an individual agreement was signed by a council, it was responsible for managing the employment relationship.

This included exercising termination provisions in case of sickness, redundancy or misconduct, he said.

"That is why, in my opinion, an unfortunate payment was made to the former vice-chancellor of Lincoln University.

"I think the effect for Government representatives on councils that defy Government policy will be clear when they come up for renewal."

Mr English questioned whether the minister intended to stop golden handshakes.

Mr Mallard responded that the case of Dr Wood had drawn the Government's attention to the problem of the width of the contracts. "I do want to consider whether it is appropriate to remove the autonomy in these matters or not."

- NZPA