The wife insisted on taking part in the exit negotiations, after hearing chatter around the office about the incident, the source said.
"Once she heard about it there was no way she was going to let it happen without her ... [but] through the disciplinary process, she did not look happy at all. [Her husband] looked very sheepish the whole time. He wasn't very happy either. No one wins in this situation."
Despite the cash settlement, it was not a pleasant outcome for the woman, the source said.
"She was just annoyed that she was dragged into it. She was annoyed because basically she could see that the writing was on the wall. The trust between her and her employer was gone."
Last year, an Auckland chief executive landed in hot water after a company Christmas party at which he kissed female staff and joked he was acting "a bit like Roger Sutton" - the Christchurch Earthquake Recovery Authority boss who resigned last year after allegations of inappropriate behaviour towards a female staff member, for which a State Services Commission investigation found him guilty of serious misconduct.
The amorous Auckland boss was accused of sexual harassment after he kissed a senior manager on the lips.
The incident was one of at least three Christmas party-related complaints investigated last year, but employment lawyers and advocates the Weekend Herald spoke to this week said they were not aware of any such incidents this year.
End-of-year blowouts are a danger time for misbehaviour, fuelled by the excitement of the festive season and often alcohol. Previous incidents have included a man who took a photo of his former manager over the partition of a toilet during a Christmas party, and a senior manager who exposed his genitals to 50 staff at another.
The Ministry of Business, Innovation and Employment does not have data showing how many Christmas party-related complaints are made to the Employment Relations Authority.
