Former Chief Executive Charlie Parker was given a half-a-million ‘golden handshake’ by Government to avert legal action over his early departure – contrary to rules covering how public money should be handled, it can be revealed today.
The compromise agreement sum, which exceeded the payout for early departure laid out in his original employment contract, was agreed by the States Employment Board (SEB) and Mr Parker on 12 November.
Signed just two weeks after the row over his second job at UK real estate firm New River broke out, the deal set the official end date of Mr Parker’s employment on 31 December 2020. A second, fixed-term contract was then put in place for 8 January to 31 March 2021.
Mr Parker received his payout on 29 January 2021.
The Chief Minister, who is Chair of the SEB, said the exit payment was deemed “appropriate” in order to avoid legal action. He declined to share what claims the Government would have otherwise been forced to fight when asked by Express.
While the Public Finances Manual says that Treasury Department approval must always be sought for “special severance payments” because they are “typically novel, contentious, potentially repercussive, and may set a precedent”, Treasury officials were not consulted in advance about Mr Parker’s payout. The Chief Minister described this as an “oversight.”
The severance figure has been released in the States Annual Report and Accounts 2020, which have been published today after heavy delays partially caused by auditors Mazars’ queries over Mr Parker’s payout.
For what’s believed to be the first time, the Government’s accounts this year include a ‘qualified opinion on regularity’ from auditors – an official statement raising concerns that, in their view, proper processes governing spending were not been followed in relation to the CEO’s exit.
The key document’s publication coincides with the release of an explosive report by Comptroller and Auditor General (C&AG) Lynn Pamment detailing other "weaknesses" in how Mr Parker’s overall appointment, employment and termination were handled.
there is no specific disciplinary process for the CEO of the Government of Jersey.
There was a provision in Mr Parker’s original contract of employment for his pension to be ‘topped up’ by Jersey’s Government if he were to retire before reaching normal pension age.
In the course of the SEB’s deliberations over how to handle the CEO’s departure, “concerns” emerged about the original process to hire Mr Parker. It was determined that an Independent HR advisor should review it, but this review has still not taken place.
Mr Parker acted as an “unpaid advisor” to the Council of Ministers in the seven days between his original contract ending and the beginning of his second fixed-term contract– the existence of which was only uncovered due to request under the Freedom of Information Law by Express. During this time, he retained access to Government buildings and IT systems, and attended a Competent Authorities meeting on 6 January. The unpaid role was not documented or communicated to staff.
There was “potential for confusion” in March, as the written contracts of Mr Parker and his interim successor Paul Martin, gave them the statutory responsibilities of being CEO at the same time.
The C&AG considered it a “conflict of interest” that Mr Parker signed off a media statement claiming that his Non-Executive Directorship at New River was approved by the Chief Minister and Deputy Chief Minister. It later emerged that the latter did not support the second role.
The C&AG concluded in her report that the settlement sum agreed with Mr Parker was “not unreasonable”, particularly “in light of the potential claims that the employer might have faced and the costs of defending them.”
However, she expressed concern that "recommendations from previous C&AG reports in respect of improved documentation standards for cases leading to compromise agreements and ensuring that reports to and minutes of the SEB include a clear rationale for exit terms proposed and agreed, have not been implemented."
Ms Pamment has now made 11 urgent recommendations for tightening processes to ensure such employment matters do not arise again.
Following the C&AG's report, the SEB said in a statement that it accepted that there were deficiencies in the process governing Mr Parker's departure. They said they had put together an explanatory report that is due to be released later today.
"I thank the Comptroller and Auditor General for her review and welcome her findings that the actual settlement agreed was reasonable in light of the potential claims that the employer might have faced and the costs of defending them," Chief Minister and SEB Chair Senator John Le Fondré said.
"The SEB acted at all times with professional advice, and the C&AG has recognised the difficult position that the SEB faced. We will of course ensure that where there are improvements recommended in our policies and procedures, they will be made over the coming months."
The Chief Minister confirmed that legal advice was provided to the Government by the Law Officers' Department, but declined to state the cost of this and whether any external legal advice was sought.
The Public Accounts Committee (PAC) - a panel of politicians responsible for scrutinising how taxpayers' money is spent - has confirmed that it will be launching a formal review into what happened.
Its Chair, Deputy Inna Gardiner, commented: "The public should be aware of how its money is spent by those entrusted to spend it, expect the Government to demonstrate value for money and deserve accurate, timely, high-quality annual reports and accounts.
"The PAC will hold public hearings on all matters relating to the presentation of the Accounts and the States Employment Board's role in agreeing the former Chief Executive's termination of contract. We expect the Government to prioritise the necessary changes to SEB and implement all of the C&AG's recommendations as a matter of urgency.
"We currently welcome the public to submit their questions in advance of our public hearing with the Interim Chief Executive and Treasurer of the States on 7 June 2021."
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However, throwing cash at the problems and making light of them is not acceptable.
It is amazing that the C&AG has been obliged to conclude that the £500,000 settlement sum agreed with Mr Parker was “not unreasonable”, particularly “in light of the potential claims that the employer might have faced and the costs of defending them."
Bluntly, the settlement sum would have been massively reduced or eliminated if the "employer" had acted in a professional manner, appropriate to an employment contract worth over £250,000 per year - considerably more than the salaries awarded to the Head of the UK Civil Service and the UK P.M.
An "explanatory report" offered by the States Employment Board is far from satisfactory, as it is obvious that there have been fundamental issues with the so called "professional advice" offered to the Board by the Law Officer's Department and within the contracts drawn up by Human Resources personnel - requiring serious responses and action.
I simply add that if Express readers are shocked by this latest blundering, stand by for the Alwitry Damages Claim for over £8,000,000 coming to a Royal Court near you pretty shortly. Another grossly embarrassing employment contract foul up.
It later transpired (eventually it must be said) that he himself released a media communique that incorrectly stated that the deputy CM had “agreed” to him taking on the second role, when in fact the deputy CM had expressed strong reservations.
Faced with the ultimatum that he must walk away from one of the roles CP chooses to abandon his Jersey position.
He then trousers £500,000 (Kerching!) of taxpayers’ money as SEB are concerned that they may be vulnerable to claims made by CP regarding the cessation of his employment.
Baffling doesn’t begin to describe it.
This government needs to go at the next election.
This government needs to go at the next election.