Canterbury Earthquake Recovery Authority boss Roger Sutton has been placed on gardening leave and an acting chief executive appointed, the State Services Commission (SSC) has announced.
Mr Sutton resigned from his position on Monday, after a State Services Commission investigation upheld a number of complaints of sexual harassment. The investigation found the chief executive guilty of serious misconduct, but did not recommend dismissal.
However, State Services Commissioner Iain Rennie this afternoon announced that John Ombler had been appointed acting chief executive, effective from 1 December.
"I have had discussions with Mr Sutton today and he was concerned that his departure might slow the momentum of CERA's work programme in Christchurch. We agreed that Mr Ombler's early appointment would be in the best interests of CERA staff and the Christchurch rebuild, and would allow Mr Sutton and Mr Ombler to work together on an orderly transition," Mr Rennie said.
"While Mr Sutton remains employed, he will not be based in CERA's offices during this transitional phase."
Mr Ombler would act as chief executive for six months, or until a permanent chief executive was appointed - whichever was earlier, Mr Rennie said.
Earlier, The Press newspaper today said details of the complaints against Roger Sutton included allegations that he suggested female staff participate in a visible G-String Friday, and gave staff unwanted body press hugs.
Mr Sutton would not talk about those claims on More FM this morning, but denied an allegation he made a sexual comment about Prime Minister John Key's wife, Bronagh Key, in front of Department of Prime Minister and Cabinet (DPMC) chief executive Andrew Kibblewhite.
He told the interviewers that the claim was ludicrous and ridiculous.
Mr Kibblewhite this afternoon released a statement in which he said he never heard Mr Sutton make any inappropriate comments about Mrs Key.
"An allegation has been made that an inappropriate comment was made in my presence. I heard no such comment," he said.
Mr Kibblewhite said he was at Mr Sutton's resignation announcement because the Canterbury Earthquake Recovery Authority (CERA) would become part of DPMC on 1 February.
"Because of that, I am a regular visitor to CERA and will continue to support the staff and organisation through the transition," he said.
Mr Kibblewhite hugged Roger Sutton at the end of the press conference in a gesture some have said condoned Mr Sutton's behaviour, which included calling female staff such names as "sweetie" and hugging them.
However, Mr Kibblewhite said that was not the case. "The hug was a gesture of support for a fellow CE who had just taken a difficult decision to resign. For the avoidance of doubt, I do not in any way condone the behaviours that have led to this situation.
Hug driven by Sutton
Prime Minister John Key said Andrew Kibblewhite was at the announcement in a professional capacity, and that it seemed to him the hug was "more Mr Sutton hugging my chief executive" than the other way around.
Mr Key said he would be disappointed if Mr Sutton had made sexual comments about his wife but neither he nor Mrs Key heard any such comments.
State Services Commissioner Iain Rennie had generally done a good job at handling the sexual harassment claims against Mr Sutton, but at times found it difficult and frustrating, Mr Key said.
New Labour Party leader Andrew Little said Mr Rennie failed to hold Mr Sutton to account and had botched the aftermath of the investigation, but Mr Key said it was a difficult situation.
"These things are never as straightforward as you might think. In the end, the State Services Commissioner does actually have to protect the privacy of the victim. The State Services Commissioner has also been frustrated and he made those frustrations clear that he believed Mr Sutton may have breached that."
However, Mr Little said it was wrong the victim was unable to give her side of the story, yet Mr Rennie and Mr Sutton had been able to hold news conferences.
"The public service has spent years actually getting good systems and good processes and procedures in place. In the end, what counts is what happens in any particular incident.
"In this incident it seems to me that the State Services Commission has got it wrong. They haven't called the conduct to account in the way that they should.
"It was totally wrong for the other party to be able to give a public pronouncement on their conduct. No matter how conciliatory or apologetic he was, the reality is that when it comes to conduct of this nature it's not the public he needs to be apologising to, it's the victims."
The SSC was responsible for the victim being publicly maligned, as she had not been able to give her side of the story, Mr Little said.
Equal Employment Opportunities Commissioner Jackie Blue is demanding answers from the SSC over its handling of the case, questioning its upholding of sexual harassment complaints without a dismissal recommendation.
Dr Blue said the outcome could have a chilling effect on anyone else in the public sector who was being sexually harassed and wanted to make a complaint about that harassment.
She said she did not understand why the confidential complaint and mediation processes in the Employment Relations Act or Human Rights Act were not used.
State Services Commissioner Iain Rennie said it was was grossly unfair that the complainant in the case has been criticised over the complaint.
The complainant had been criticised on social media and other media, and he wanted to stress that the large part of her complaint was upheld and that she had suffered hurt and distress, he said.
As well, Mr Sutton and his lawyer had been told he had breached a confidentiality agreement.
"That was disappointing, that's been drawn to his lawyer's attention, they key thing clearly is that there are no further breaches by actually any parties."
Mr Rennie said it was important there was a focus on providing stability and leadership to CERA through the next period. He declined to comment on allegations in The Press.
"What is actually important, is not actually the allegations, those are being looked at, what is important is what is the outcome. And the outcome was the complaint was largely upheld, there was a finding of serious misconduct."
The complainant was subject to the same agreement as Mr Sutton and did not want to talk publicly, he said.
The investigation had been criticised as biased and inadequate by former CERA employee Tina Nixon.
Roger Sutton on Monday told a media conference with Mr Rennie that he was confronting his actions following complaints by a senior staff member.