Carol Altmann – The Terrier

After a three-day hearing in the Victorian Supreme Court, the fate of sacked Warrnambool City Council CEO Peter Schneider now comes down to three options:

First, he loses his case.

Second, he wins his case and accepts an untold amount of damages that are yet to be decided.

Third, Mr Schneider wins his case, his termination is quashed, and the new WCC councillors are left to decide whether they would like to keep him or replace him.

Any move by the new council to sack Mr Schneider would require a fresh motion and – no doubt – the opportunity for him to defend his record: an opportunity which his lawyers say he was denied on 13 July last year when the axe fell by way of a 4/3 vote. (Mr Schneider’s contract was due to expire in Feb 2023.)

The presiding judge Justice Michael McDonald says he hopes to hand down his judgment by 28 June and my word, it can’t come soon enough.

Because regardless of the outcome, this bruising court battle has done our city no favours.

By the time this is settled, our city will have been left sitting in grid lock for almost a year, unable to move ahead with a permanent leader.

Just as bruising is the spotlight on the tribalism within the old council.

By way of the written affidavits and evidence lodged with the court, the factionalism, infighting and petty nastiness within the previous council has been put on display outside of the Liebig St bubble.

We might have become used to it as part of our Stockholm Syndrome (since cured), but those exposed to it for the first time must have been astonished.

It’s perhaps not surprising that Justice McDonald dismissed most of the “he-said, she-said” evidence with one swipe on day one of the hearing on Tuesday, saying he wasn’t interested – “for heaven’s sake” – in the inner workings of the WCC.

He was attuned, however, to the implications of allowing a senior public official to be “caught in the cross-fire of factional warfare between councillors”.

As Justice McDonald said with punch yesterday, any CEO caught in this crossfire could be “figuratively get taken out the back and shot”.

He repeated this theme today, saying there were specific laws to protect a public official, like a council CEO, from “the capricious and whimsical actions” of others.

“Because of the close contact between a CEO and a council, this is the very example of (an officer) needing that protection.”

As I wrote last night, the case hinges on whether Mr Schneider’s individual contract and its “no reason” clause holds more sway than section 94 (c) of the Local Government Act, which, by law, says all council workers must be treated fairly.

As Justice McDonald outlined yesterday, it is a case with potential implications for every council CEO across Victoria.

In fact we learned in the final day of the hearing today that this is the first time in 28 years that the Local Government Act (1993) has been challenged in this way.

No other council in Victoria – in recent history at least – has had a legal battle between a sacked CEO and a council make its way to the Supreme Court.

So Warrnambool will make history and Schneider v Warrnambool City Council will probably find its way into the text books of the next generation of civil lawyers.

But no doubt ratepayers, who one way or the other are paying for this battle and the fallout, would prefer this chapter had never been written.

 

Carol Altmann – The Terrier

If you think the Supreme Court battle between the Warrnambool City Council and dumped CEO Peter Schneider is just a local bunfight, think again.

The potential implications of this case for council’s right across Victoria was made clear by the presiding judge today.

The Honourable Justice Michael McDonald said if Mr Schneider loses his legal fight on the grounds argued by the WCC, every council CEO across Victoria was at risk of “figuratively (being) taken out the back and shot”.

“If you are successful, then any local government within Victoria would then have the power to terminate a contract for no reason at all,” Justice McDonald told counsel for the WCC, Ragu Appudurai.

Justice McDonald said, “looking at the very broad, non-legalistic picture”, the outcome of this case had wide-reaching implications for councils far beyond Warrnambool.

One is the “no reason” clause – like that used to dismiss Mr Schneider – left all council CEOs vulnerable to tribalism of councillors.

“A CEO could be caught in the cross-fire of factional warfare between councillors and figuratively get taken out the back and shot,” Justice McDonald said.

Justice McDonald said the CEO position was “an extremely important position” and if the WCC was found to be able to sack Mr Schneider without reason or fairness, the impact on good governance would be devastating.

“That would be an extraordinary outcome and extraordinarily destructive for good governance,” he said.

“(It would be) quite an extraordinary outcome …a council can simply employ someone on a contract which permits the council to (dismiss them) for no reason at all.”

The nub of the case is whether Mr Schneider’s individual contract holds more sway than section 94 (c) of the Local Government Act, which guarantees all council workers will be treated fairly.

Mr Appudurai today spent several hours outlining the council’s argument that Mr Schneider is not a regular council employee, but a senior employee on a specific contract.

As such, the council could sack him using the “no reason” clause in this contract and had no obligation to treat him “fairly”.

This lack of fairness included the four ex-councillors not giving Mr Schneider a chance to defend himself on the night of his sacking.

Lawyers for Mr Schneider, however, argue that no individual contract can over-ride the Act, which is the law.

They say that Mr Schneider was sacked unlawfully and so is – technically – still the CEO of the Warrnambool City Council.

This is part of what Justice McDonald will have to determine in his judgment that he hopes to hand down by 28 June.

In the meantime, an interesting question raised by the Justice today was, if Mr Schneider wins his case, what happens to the $200,000 payout he received last year?

Would it need to be repaid?

Not according to Mr Schneider’s lawyer David Grace QC, who argued that because Mr Schneider was sacked illegally, this money (after tax) was the wages he would be entitled to keep from the day he was sacked to the day he is reinstated.

In other words, Mr Schneider is still – technically – the CEO.

The WCC, however, saw this payout as “the price it had to pay” to sack Mr Schneider without reason.

To quote Justice McDonald: “there are plenty of curly questions being thrown up by this case”.

That might be the understatement of the year.

Final submissions will be heard in the Supreme Court tomorrow.